Crypto here to stay, must be regulated: Hong Kong treasury chief

HONG KONG — Hong Kong has decided to let retail investors trade cryptocurrency under its new regulatory regime because "virtual assets are going to stay", the city's minister overseeing financial services said.

Cryptocurrencies have been banned in mainland China since 2021, but the former British colony, which has a separate financial system and regulators, has announced plans to become a major digital asset hub.

From June 1, authorities will begin accepting applications for licenses from cryptocurrency exchanges that will allow them to sell major tokens including bitcoin and ether to individual traders.

"Despite the potential risks involved, (virtual assets) also carries with it fundamental value," Christopher Hui, Hong Kong's secretary for financial services and the treasury, told AFP in an interview.

"So for these positive elements to be harnessed, these activities have to be allowed in a regulated way."

Regulators around the world are examining cryptocurrencies with renewed urgency following the collapse of trading platform FTX last year and other high-profile failures in the sector.

Hong Kong was initially hesitant to allow crypto exchanges to take on retail clients, but Hui acknowledged that there was "considerable interest" in trading.

Asked whether Beijing backed Hong Kong's plans to open up crypto trading, Hui said the finance hub charts its path by following the emerging global consensus.

"Different jurisdictions will adopt the right approach to their own market, and Hong Kong is no exception," he said.

"We are an open market... So while different jurisdictions have different laws and requirements, I think what we should do is based on what we are good at."

The government's pivot toward crypto and fintech coincides with Hong Kong's recent reopening following three years of tough Covid policies that isolated it internationally and drove talent away.

Hong Kong's international business reputation also took a hit as Beijing cracked down on political freedoms after mass democracy protests in 2019.

The promise of fresh crypto exchange regulations has attracted more than 80 enquiries with the city's investment promotion agency, the treasury chief told AFP.

"One thing that has been very obvious is that Hong Kong is back to usual," he said. "We are back to business."

'Right guardrails' 

During a public consultation that ended in March, some crypto firms bemoaned stringent proposals that made compliance potentially costly.

One concession made by regulators was to lower the insurance coverage requirement down to 50 percent for virtual assets held by clients in "cold storage" -- a more secure way of storing crypto offline.

"For technical reasons, of course cold storage presents lesser risk for hacking," Hui said, saying the shift was to reflect risks in a proportional way.

Under the new rules, crypto exchanges must assess a client's risk tolerance and knowledge of cryptocurrencies, and impose risk-exposure limits.

"Investors have to be in the know in terms of what they are going into," Hui said, adding that education is a priority.

But authorities have yet to specify the exact threshold for crypto knowledge needed for a retail investor to trade -- one of several implementation details left up in the air.

Hong Kong's securities regulators will issue guidelines later, Hui said.

Crypto-related scams are a burgeoning problem in Hong Kong, with the city last year recording more than 2,300 such cases with total losses of HK$1.7 billion ($217 million), according to police.

"We understand the risk, we at the same time put in the right guardrails," Hui told AFP.

Agence France-Presse

Bitcoin climbs to 9-month high as bank turmoil sparks rally

LONDON/HONG KONG  -Bitcoin climbed to a nine-month high on Monday as turmoil in the banking sector drives some investors to turn to digital assets, as the cryptocurrency built on its best week in four years.

The biggest cryptocurrency rose as far as $28,567, its highest since mid-June, and was last up 0.9 percent, amid growing expectations that central banks would slow the pace of interest rate hikes.

Bitcoin rose 26 percent last week, its best weekly gain since April 2019, and has soared some 40 percent in 10 days as turmoil in the banking sector rippled around the globe – culminating, so far, in UBS Group’s takeover of rival Credit Suisse Group AG over the weekend.

Traditional assets such as banking stocks and bonds plummeted on Monday after UBS sealed its state-backed takeover of Credit Suisse, a deal orchestrated in an attempt to restore confidence in a battered sector.

Top central banks, faced with the risk of a fast-moving loss of confidence in the stability of the financial system, moved on Sunday to bolster the flow of cash around the world. Such a global response has not seen since the height of the COVID-19 pandemic.

“Its stunning rally is the result of the banking crisis, and as the interest rate markets prices in rate cuts in the second half of 2023,” said Tony Sycamore, an analyst at IG Markets, predicting a move towards $32,000 should bitcoin hold above the key support level about $25,000.

Other market players predicted that bitcoin would benefit from central bank efforts to bolster liquidity in the global financial system. It rose to a record of $69,000 in November 2021 after central banks and governments launched unprecedented monetary and fiscal stimulus measures.

“The momentum is all driven by liquidity,” said Markus Thielson at digital asset firm Matrixport in Singapore.

-reuters

US regulators warn banks over crypto risks

WASHINGTON — US bank regulators warned Tuesday that crypto assets and exposure present risks to lenders, urging organizations to ensure they manage the dangers.

The joint statement comes after the sudden collapse of cryptocurrency platform FTX -- worth $32 billion before it filed for bankruptcy in November -- which sent chills across the sector.

FTX's disgraced founder Sam Bankman-Fried has since been accused of committing one of the biggest financial frauds in US history, sparking calls for greater oversight.

"It is important that risks related to the crypto-asset sector that cannot be mitigated or controlled do not migrate to the banking system," said the Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency.

They added in a joint statement that events of the past year "have been marked by significant volatility and the exposure of vulnerabilities in the crypto-asset sector."

Banking organizations should be aware of risks such as fraud and scams, along with inaccurate or misleading disclosures, the agencies said.

There is also "significant volatility" in crypto-asset markets, and contagion risk in the sector due to connections between parties -- including through opaque lending, investing or funding.

The watchdogs said they continue to take a "careful and cautious approach" with crypto activities and exposure at banking organizations.

Meanwhile, lenders should "ensure appropriate risk management" such as board oversight and guardrails to identify and manage threats, the statement said.

FTX's implosion was swift following a Nov. 2 media report on ties between it and Alameda, a trading company also controlled by Bankman-Fried.

The report exposed that Alameda's balance sheet was heavily built on the FTT currency -- a token created by FTX with no independent value -- and exposed Bankman-Fried's companies as being dangerously interlinked.

Agence France-Presse

North Korea-tied hackers executed $620 million crypto heist: FBI

WASHINGTON — North Korean-tied hackers were responsible for a $620-million cryptocurrency heist last month targeting players of the popular Axie Infinity game, US authorities said Friday. 

The hack was one of the biggest to hit the crypto world, raising huge questions about security in an industry that only recently burst into the mainstream thanks to celebrity promotions and promises of untold wealth.

Last month's theft from the makers of Axie Infinity, a game where players can earn crypto through game play or trading their avatars, came just weeks after thieves made off with around $320 million in a similar attack.

"Through our investigations we were able to confirm Lazarus Group and APT38, cyber actors associated with (North Korea), are responsible for the theft," the FBI said in a statement.

Lazarus Group gained notoriety in 2014 when it was accused of hacking into Sony Pictures Entertainment as revenge for "The Interview," a satirical film that mocked North Korean leader Kim Jong Un.

North Korea's cyber-program dates back to at least the mid-1990s but has since grown to a 6,000-strong cyber warfare unit, known as Bureau 121, that operates from several countries including Belarus, China, India, Malaysia and Russia, according to a 2020 US military report.

North Korean hackers stole around $400-million worth of cryptocurrency through cyberattacks on digital currency outlets last year, blockchain data platform Chainalysis said in January. 

In the case of the Axie Infinity heist, attackers exploited weaknesses in the set-up put in place by the Vietnam-based firm behind the game, Sky Mavis.

The company had to solve a problem: the ethereum blockchain, where transactions in the ether cryptocurrency are logged, is relatively slow and expensive to use.

To allow Axie Infinity players to buy and sell at speed, the firm created an in-game currency and a sidechain with a bridge to the main ethereum blockchain.

The result was faster and cheaper -- but ultimately less secure.

The attack targeting its blockchain netted 173,600 ether and $25.5 million-worth of stablecoin, a digital asset pegged to the US dollar.

Agence France-Presse

Meta virtual money moves could include 'Zuck Bucks': report

SAN FRANCISCO, United States - Facebook's parent company Meta is exploring the potential of digital money referred to internally as "Zuck Bucks" in a play on the founder's name, the Financial Times reported.

Meta abandoned its effort to create a global cryptocurrency -- first called Libra but eventually re-branded as Diem -- in the face of fierce backlash by financial regulators around the world.

However, founder and chief Mark Zuckerberg has spoken about the importance of e-commerce and financial tools to his vision for an immersive online world called the metaverse.

"We continuously consider new product innovations for people, businesses, and creators," a Meta spokesperson said in response to an AFP inquiry.

"As a company, we are focused on building for the metaverse and that includes what payments and financial services might look like."

The spokesperson would not comment on specific innovations being pursued.

Products being considered at Meta include digital tokens similar to those used for transactions in video games, with the internet company's version nicknamed "Zuck Bucks" by those working on it, according to the Financial Times.

Popular games such as "Fortnite" and "Roblox" use tokens for transactions.

The tokens could potentially be used to reward creators and influencers whose posts draw online audiences.

Meta is looking to diversify its revenue beyond a reliance on targeted advertising that has provoked concerns about invading users' privacy.

Agence France-Presse

Ronin's $615 million crypto heist

LONDON - Hackers have stolen cryptocurrency worth almost $615 million from a blockchain project linked to the popular online game Axie Infinity, the latest cyberheist to hit the digital asset sector.

Ronin, a blockchain network that lets users transfer crypto in and out of the game, said on Tuesday the theft happened on March 23 but was not detected until almost a week later. Read full story

Here's what you need to know about the Ronin heist.

CRYPTO'S A BIG DEAL NOW, RIGHT?

Indeed.

Bitcoin and other digital currencies have exploded into public view in recent years, with mainstream investors embracing the sector in droves during the COVID-19 pandemic.

The sector's now worth over $2.1 trillion. As money has poured in, the hacks and heists that have long plagued crypto have also grown also size. 

AND HOW DOES RONIN FIT IN?

Ronin is used in Axie Infinity, one of the world's most popular online games involving cryptocurrencies.

Its products include a digital wallet for storing crypto, and a "bridge" that allows users to move funds in and out of the game. This is where the crypto were stolen from.

Ronin takes its name from the samurai warriors of feudal Japan who did not serve any particular lord. The name "represents our desire to take the destiny of our product into our own hands," Axie Infinity said in a blog post.

Vietnam-based Sky Mavis, which launched Axie Infinity in 2018, did not respond to multiple requests for comment. Ronin also did not return Reuters' messages.

Jeffrey Zirlin, one of Axie Infinity's founders, said at a conference on Tuesday: "It is one of the bigger hacks in history and we're fully committed to continue building."

HOW DID THE HEIST HAPPEN?

The Ronin hacker used stolen private keys - the passwords needed to access crypto funds - Ronin said in a blog post, after targeting computers connected to its network that help confirm transactions.

Ronin said it discovered the hack on Tuesday and that it was working with "various government agencies to ensure the criminals get brought to justice".

The identity of the hackers is still unclear.

AND AXIE INFINITY?

Axie Infinity says it has 2.8 million daily active players, with some $3.6 billion previously traded on its marketplace, making it one of the most popular blockchain-based online games.

Set in a fictional universe, players can collect, trade and play with virtual creatures called Axies, which are traded in the form of non-fungible tokens (NFTs) and sell for hundreds of thousands of dollars.

It is the largest NFT brand by all-time sales volume, according to market tracker CryptoSlam.

The game has attracted venture capital funding, raising $152 million in October from investors including Andreessen Horowitz.

Axie and other "play-to-earn" games allow players to spend crypto and earn financial rewards. They have surged in popularity in the past year, as a frenzy in the NFT world prompted investors to speculate in the hope of large returns.

WHERE'S THE LOOT NOW? AND ARE USERS AFFECTED?

Most of the stolen funds are still in a digital wallet, which is available to view.

Blockchain Intelligence Group, a Vancouver-based crypto tracker, said that the hackers had moved a small amount of the funds to major exchanges FTX, Crypto.com and Huobi.

Huobi said it was investigating the hack and communicating closely with Axie Infinity. FTX and Crypto.com did not immediately responded to requests for comment.

Ronin said in a blogpost that Sky Mavis was "committed to ensuring that all of the drained funds are recovered or reimbursed," without giving details. Making sure there is no loss of funds "is our top priority", it added.

It said it was working with major blockchain tracker Chainalysis to trace the stolen funds. Chainalysis declined to comment.

-reuters

Bitcoin holds ground after touching highest this year

LONDON - Bitcoin held ground just below its highest this year, touched a day earlier, with gains for the original cryptocurrency topping 27 percent since Russia's invasion of Ukraine.

Bitcoin hit $48,234 on Monday evening, its highest since Dec. 31. It was last trading up 0.9 percent at $47,553.

Its gains lifted smaller cryptocurrencies that tend to move in tandem with bitcoin. Ether, the second biggest token, hit $3,436 on Monday, its highest since early January.

Market players cited emerging signs of a new wave of adoption of crypto by institutional investors and financial firms, whose interest over the past two years has fuelled crypto's journey to mainstream asset from niche technology.

Bitcoin has risen over 12 percent in the last week alone.

Among supportive comments cited were those by BlackRock Inc's chief executive, who said last week that the Russia-Ukraine war could end up accelerating digital currencies as a tool to settle international transactions.

Such moves signal "growing conviction that the crypto markets are worth dedicating more resources to," said Noelle Acheson, head of market insights at US crypto firm Genesis.

Though bitcoin and other cryptocurrencies are now spoken of in the same breath as traditional assets from stocks and foreign exchange to bonds, its remains as volatile as ever.

Bitcoin hit an all-time high of $69,000 in November, before tumbling almost 30 percent in just 24 days.

-reuters

Intel launches blockchain chip to tap crypto boom

Intel Corp launched a new chip for blockchain applications such as Bitcoin mining and minting NFTs to cash in on the rising usage of cryptocurrencies.

The chip will ship later this year and the first customers include Block Inc, the Jack Dorsey-led firm that recently changed its name from Square Inc to highlight its growing focus on the blockchain.

Blockchains serve as public ledgers that keep records of transactions on a network of computers and have grown in prominence in recent years. Their rise has also triggered a buzz around words like "Web.3" and "NFTs" that tout the decentralization of technologies.

Intel said its chip is an energy-efficient "accelerator" designed to speed up blockchain tasks that require huge amounts of computing power and thereby consume a lot of energy.

Chip designer Nvidia Corp, whose graphics cards are used widely for mining activities, also has a separate chip meant for Ethereum mining.

As a part of furthering its footprint in the space, Intel has also formed a new segment called Custom Compute Group within its Accelerated Computing Systems and Graphics business.

-reuters

India to launch state-backed 'digital rupee', tax crypto

MUMBAI - India will introduce a state-backed "digital rupee" and impose a 30 percent tax on profits from virtual currencies, the government announced while unveiling the next financial year's budget.

The plans are a blow to one of the world's fastest-growing cryptocurrency markets, which has remained unregulated despite burgeoning local trading platforms and glitzy celebrity endorsements.

They make India the latest major emerging economy to rein in the sector, after China went even further in outlawing all cryptocurrency transactions last September.

"There has been a phenomenal increase in transactions in virtual digital assets," finance minister Nirmala Sitharaman told parliament, adding that the growth necessitated a proper tax framework.

Profits made trading cryptocurrencies and other digital assets will be taxed at 30 percent from April, while any losses from digital transactions will not be granted offsets against other income.

A one-percent tax will be deducted at the source for all digital asset transactions, including cryptocurrencies and NFTs, a move that the finance minister said would help the government track each trade.

Sitharaman also said the central bank would introduce a "digital rupee", based on blockchain technology, by the end of March 2023.

"Introduction of central bank digital currency will give a big boost to (the) digital economy. Digital currency will also lead to a more efficient and cheaper currency management system," she said.

Cryptocurrencies have been under scrutiny by Indian regulators since first entering the local market nearly a decade ago, with a surge in fraudulent transactions leading to a central bank ban in 2018.

India's Supreme Court lifted the restrictions two years later and the market has surged since, growing by nearly 650 percent in the year to June 2021 -- second only to Vietnam, according to research by Chainalysis.

Prime Minister Narendra Modi last year warned that Bitcoin presented a risk to younger generations and could "spoil our youth" if it ended up "in the wrong hands".

The government last year proposed banning "all private cryptocurrencies", but ultimately held back.

"It's good to finally have some clarity on the taxation aspect," said Sathvik Vishwanath, the co-founder of Unocoin, one of India's oldest crypto trading platforms.

"Now we can infer that if they are introducing taxation it's because they know that the ban (on trading cryptocurrencies) is not happening."

'More growth and more jobs' 

Tuesday's budget also included plans to ramp up infrastructure spending to support the economy's post-pandemic bounceback as officials grapple with rising inflation and unemployment.

Spending of 7.50 trillion rupees ($100 billion) will be directed to roads, railways, defence, housing and energy in the coming financial year, as the government eyes important state polls in the coming weeks.

"This budget is filled with possibilities for more infrastructure, more investments, more growth and more jobs," Modi said.

India is forecasting world-beating economic growth of up to 8.5 percent in the coming financial year, according to estimates released Monday. 

The budget was "short on big-bang proposals" but had struck a balance between recovery and improving the country's fiscal position, said Rudra Sensarma, an economics professor at the Indian Institute of Management Kozhikode.

India is nonetheless running a large budget deficit, which is forecast to fall slightly to 6.4 percent of GDP in 2022-23.

Agence France-Presse

Crypto market value tops $3 trillion for first time

LONDON - The world cryptocurrency market is worth more than $3 trillion for the first time, according to calculations Monday, as mainstream investors increasingly jump on board.

The value has reached $3.007 trillion (2.6 trillion euros), said CoinGecko, which tracks prices of more than 10,000 cryptocurrencies.

"The crypto market is growing at a mind-blowing speed," noted SwissQuote analyst Ipek Ozkardeskaya.

"A part of it is speculation of course, but a part of it is real," she told AFP.

"Crypto is now making its way to traditional finance and everyone is on board."

Bitcoin, the world's biggest cryptocurrency, hit a record-high $66,000 last month after taking another step towards mainstream status.

It surged back above $66,000 on Monday close to its all-time peak after a five percent jump.

Ethereum, the second biggest cryptocurrency by market value, hit a record high $4,768 on Monday.

A bitcoin futures exchange-traded fund, a type of financial instrument, launched on the New York Stock Exchange in October.

The ETF is a more accessible vehicle that puts bitcoin within the grasp of even more investors.

Some investors sees cryptocurrencies as a hedge against inflation, which is surging worldwide as economies reopen after pandemic lockdowns.

"Bitcoin is bouncing higher again, close to all-time highs," Hargreaves Lansdown market analyst Susannah Streeter said Monday.

"The recent surge in the crypto... partly seems to have been caused by investors piling in, seeing it as a hedge against inflation," Streeter added. 

No more than 21 million bitcoin can be created, helping its price to trade way above its rivals, but trading of cryptocurrencies in general has shown to be extremely volatile with massive price swings a common occurrence.

Agence France-Presse

Equity markets and oil bounce back after last week's tumble

HONG KONG - Stocks and oil rallied Monday on bargain-buying after last week's blow-out, with traders tracking a healthy Wall Street performance fuelled by comments from a top Federal Reserve official that the spread of the Delta variant could cause him to reconsider plans to taper monetary policy.

Fears about the Covid mutation have rattled world markets as it forces some governments to reimpose containment measures, while sentiment was jolted further last week by minutes from the Fed's July meeting indicating it could start withdrawing its vast financial support by year's end.

The colossal bond-buying program and record-low interest rates have been a key pillar of the global recovery for more than a year, and the prospect of the cash being withdrawn has stalled that advance.

However, Dallas Federal Reserve boss Bob Kaplan, who is considered a policy hawk, suggested he could rethink his view to taper soon in light of the Delta variant's spread, which is showing signs of hobbling economic growth.

"The thing that I am going to be watching very carefully over the next month, before the next (Fed) meeting, is (whether) it is having a more material impact on slowing demand and slowing GDP growth," he said.

"I'm going to keep an open mind on that, and if it is having a more negative effect that might cause me to adjust my views somewhat from ones that I've stated."

Observers said the general consensus is that even when the Fed finishes winding back support, it is unlikely to immediately start hiking interest rates.

"Markets react to interest-rate hikes much more than tapering and we expect a pause between tapering and the first hike, suggesting liftoff in 2023 and not before," said Esty Dwek of Natixis Investment Managers.

BITCOIN BACK ABOVE $50K

Focus is now on Fed chief Jerome Powell's speech to the Jackson Hole annual conference of central bankers and finance chiefs, with hopes for a clue about a taper timetable.

All three main indexes on Wall Street rallied Friday, and Asia picked up the baton at the start of the week.

Tokyo jumped 1.8 percent while Shanghai, Bangkok and Jakarta were all up more than one percent. Hong Kong, which sank nearly six percent last week, was also up with Sydney, Seoul, Wellington and Mumbai. Taipei jumped more than two percent.

London, Paris and Frankfurt opened sharply higher.

The positive start was mirrored in oil markets, with both main contracts enjoying big gains, having suffered heavy losses recently owing to concerns that the Delta spread would impact demand as countries restrict people's movements.

Crude also rallied, helped by a dip in the dollar caused by the Kaplan remarks, while the observers said concerns over demand could prompt OPEC and other major producers to reconsider plans to increase output each month.

Still, while the week has got off to a healthy start, investors remain cautious about Delta's effect on the recovery outlook, while China's ongoing regulatory clampdown is also keeping optimism in check. 

Bitcoin broke back above $50,000 for the first time since mid-May, boosted by bargain-buying and leading some to predict the cryptocurrency could now be on course to hit $100,000.

"We're seeing some very bullish signs here," Vijay Ayyar, head of Asia-Pacific with crypto exchange Luno in Singapore, said. The currency could "test all-time highs again", he added. Bitcoin hit a record of almost $65,000 in April before suffering a sharp sell-off over the following months.

Agence France-Presse 

Bitcoin hit with record weekly outflow as rally ebbs: CoinShares data

NEW YORK, United States - Bitcoin posted a record weekly outflow, with overall sentiment on cryptocurrencies turning cautious as the digital asset's searing rally hit a wall, data from digital currency manager CoinShares showed on Monday.

Outflows for bitcoin hit $21 million for the week of April 23, the largest weekly outflow on record. Total weekly inflows for the sector were just $1.3 million, the lowest weekly figure since October 2020.

That said, CoinShares said outflows last week were 0.05 percent of the crypto sector's assets under management, while weekly inflows this year averaged 0.6 percent.

Total assets under management were $54.3 billion as of last week, down from $64.2 billion in mid-April.

"We saw investors shifting funds away from bitcoin amid some idiosyncratic developments last week, prominently including the temporary power outage in mining mecca Xinjiang," said Matt Weller, Global Head of Market Research at Forex.com and City Index.

Amid serious coal mine accidents in China's Xinjiang, Shanxi and Guizhou provinces, the Chinese government directed local coal-based power stations to conduct inspections of security measures. Data centers in Xinjiang, including bitcoin mining farms, had to shut down due to subsequent power cuts, according to media reports.

After hitting a record high just under $65,000 in mid-April, bitcoin has plunged nearly 25 percent. On Monday though, the world's largest cryptocurrency in terms of market capitalization rallied as much as 10 percent and last traded at $54,031, highlighting the asset's extreme volatility.

The second largest cryptocurrency ethereum, meanwhile, showed strong inflows of $34 million. So far this year, inflows were $792 million, or 8 percent of total AUM, reflecting renewed positive sentiment among investors.

"Cryptoasset investors continued to accumulate ethereum as the highly-anticipated July launch of EIP-1559, which will cut the new supply of ETH dramatically, approaches," said Forex.com's Weller, referring to the blockchain's planned upgrade.

Grayscale remains the largest digital currency manager, with $41 billion in assets as of April 23, down from $49.5 billion the previous week. CoinShares, the second biggest and the largest European digital asset manager, oversees about $5.2 billion, slightly down from $5.7 billion in assets as of the mid-April. 

-reuters

Atari creates blockchain division for cryptocurrency, games

PARIS - Video game pioneer Atari announced on Tuesday the creation of a blockchain division that will seize on the technology to develop games and a cryptocurrency that players could spend on items.

Blockchain technology gives value to cryptocurrency and other "non-fungible tokens" (NFTs) -- such as digital works of art, photos or videos -- by making them impossible to duplicate.

The company said in a press release that it wanted to push its "Atari token" as payment for digital goods within the content on its own "Video Computer System" console and other platforms, but also third party games and applications.

"Atari will also continue to evaluate opportunities in blockchain gaming, NFTs, and blockchain-based online worlds," it said, citing "the immense possibilities of crypto and blockchain-enabled games".

The release also alluded to the possibility of the new division becoming an independently-listed entity, though it said that there is "no assurance any such potential spin-off will occur".

Atari said it was also creating a gaming division that will focus on "the expanding market of retro gaming".

The company's licensing division has already gone beyond the realm of the virtual with an agreement announced in March to build gaming-themed Atari hotels in Dubai, Gibraltar, and Spain.

Launched in California in the early 1970s, Atari is famous for its "Pong" table tennis game, widely regarded as the first video game to achieve serious commercial success.

The brand with its portfolio of more than 200 games and franchises was saved from bankruptcy in 2013 by French company Ker Ventures owned by Frederic Chesnais and American fund Alden.

Atari said Tuesday that Chesnais will relinquish his CEO post to head up the blockchain division and licensing while American Wade Rosen, currently chairman, will take over from his French colleague.

Despite disappointing results in the first half of the year, with revenues down 27 percent to 7.8 million euros, the share price has doubled since January 2021, valuing the company around 250 million euros.

Agence France-Presse

Facebook’s digital currency may flourish where banks don’t

NEW YORK  — Europeans and Americans have their Visa and Mastercards. For everyone else, here comes … Libra?

Facebook’s new Libra digital currency is aimed at a huge potential market for financial services — the entire developing world, with billions of people in areas such as India and Sub-Saharan Africa, where financial services are often less sophisticated and many people don’t use traditional banking accounts.


Whether or not these billions will want to make the switch is anyone’s guess.

The U.S., Europe and most developed economies already have large, efficient payment systems. These allow people to buy and sell goods in real time and send money person-to-person through services like Zelle, PayPal and Venmo. That’s why the companies that joined Facebook’s Libra association, as well as nonprofits involved with similar projects, say Libra’s potential lies elsewhere.


In developing countries, many tens of millions still live far from a bank or money transfer center, or currently use a currency prone to inflation or volatility. Libra could address this issue by providing a universal, stable currency that is easily transferrable between persons or businesses without involving setting up an entire payment infrastructure. It also potentially could work at a lower cost.

In the last decade, citizens of developing countries have widely adopted cellphones as a way to store money, sending text message-based payments either to businesses or persons. It’s been a broadly heralded development among policymakers and nonprofits focused on poverty because bank accounts are hard to come by or are too expensive.

“The entire continent of Africa skipped right over cards and went straight into mobile payments,” said Sanjay Sakhrani, an industry analyst with Keefe, Bruyette & Woods, who covers Visa, Mastercard, PayPal and Western Union.

But these payment systems are often constrained by the type of cellphone carrier each person is using. It’s not uncommon in places like Africa to carry multiple cellphones in order to have the necessary access to the right money transfer system.

Libra could solve this problem by creating a universal currency that can be transferred across multiple cellphone networks and across borders. There’s also the issue of cost, which is cited by the World Bank as being the biggest issue with financial systems outside of developed markets. Facebook says Libra would have a near-zero cost attached to it.

The Colombian border city of Cucuta, is one of the places where Libra could make a difference.

Every day, thousands of needy Venezuelans cross into this sweltering town to buy food and medicines that are scarce at home. For many the first stop is Western Union, where they line up for hours to pick up cash sent by relatives living in abroad. The demand for cash remittances is so big in fact that migrants sometimes line up outside Western Unions the night before the branches open, sleeping on the sidewalk to keep their place in the queue.

Digital currencies could make it easier to transfer funds to these migrants with no bank accounts, and save them hours of their time. Using them is also safer, says Typson Sanchez, a local software developer, because it prevents robberies.

But despites its obvious benefits, merchants in Cucuta have been slow to adopt digital currencies, and only a handful currently accept it.

“Merchants worry about the volatility” of currencies like bitcoin, says Sanchez, a software developer and co-founder of Panda Exchange, a digital payments start up. Other merchants find existing digital wallets difficult to use, and worry about its legality.

Sanchez hopes that Facebook’s Libra could help to overcome some of those obstacles. “They already have a very powerful platform with lots of users” Sanchez says. “They will be able to reach everyday people who are not into technology. And that’s something that many companies haven’t been able to do yet.”

Vodaphone, the Europe-based cell carrier, has a large presence in Africa and other developing countries and operates its own mobile wallet system known as M-Pesa. Already a dominant carrier in Africa, Vodaphone sees the potential in Libra to enable customers to send money across borders at a much lower cost.

There’s a lot of room for improvement. The average fee on a cross-border remittance is around 7%, according to the World Bank, with places in Sub-Saharan Africa charging as much as 10% to send a money transfer.

Companies like Vodaphone and organizations involved with Libra like Mercy Corp and Women’s World Banking said they’ve joined at least in part to make sure they have a “seat at the table” in case Libra does take off as a payment method. Libra’s real-life use cases are still at least a year off, and much likely longer.

Some would argue that Facebook’s Libra is the wrong solution to the issue of accessing financial services in developing countries. In China, the dominant way to pay are WeChat and AliPay, two mobile apps that use messaging to send money either to a business or another person, at extremely low cost. Both apps are used by more than a billion people.

“That to me is the simplest solution for developing countries,” said Nicholas Economides, a professor of economics at the Stern School of Business, an expert in electronic commerce and payment systems. “You don’t need to create a whole new currency. You just need the right app.”

There’s a “well, why not?” factor into these companies’ involvement. Facebook asked for a minimum $10 million investment in Libra from its for-profit partners. For a company like Visa, which made more than $20 billion in revenue last year, the Libra investment is pocket change. In exchange Visa gets insider access to Libra and its potential technologies, as well as a seat at the table.

Visa declined a request for an interview regarding its involvement in the project, but a spokesman pointed to a blog post one of its executives published Tuesday, in which the company’s interest is described as reflecting “a spirit of openness and curiosity.”

Mastercard has been looking into technology that underpins bitcoin and other digital technologies for some time, said Jorn Lambert, executive vice president of digital solutions at Mastercard. The company was attracted to Libra because it’s private, unlike bitcoin which operates on an open network, and it’s backed by reserve currencies.

“This is a thing that could provide real consumer benefits, particularly in the developing world,” Lambert said.

Women’s World Banking, a nonprofit focused on financial inclusion for women particularly in developing countries, also joined the association. WWB wanted to make sure the issues of women in developing countries — who are often less technologically literate than their male counterparts — were addressed.

“Women are more than half of the unbanked population in the world. We wanted to be at the table to address women’s needs,” said Karen Miller, vice president of knowledge and communications.

source: technology.inquirer.net

Facebook is creating its own cryptocurrency

As the value of cryptocurrency continues to decrease from its all-time high in December of last year — a decrease of about $14,000 per coin over the past year according to CryptoCurrencyChart.com — Facebook continues to hang onto the blockchain dream. Bloomberg’s sources claim that the corporation is developing its own digital currency called stablecoins, pegged to the United States dollar.

Four years ago, the company hired former president of PayPal David Marcus, and in May of this year, he was appointed to head Facebook’s blockchain initiatives. In fact, according to LinkedIn’s employee titles, the company’s blockchain division consists of about 40 people who are allegedly working on developing this tech to be used for WhatsApp money transfers. But as of now, the currency is far from being launched, sources said.

When Facebook does announce this technology, it will likely be targeted at the Indian market, as WhatsApp has over 200 million users in the country, and people send tens of billions of dollars to India every year.

While the cryptocurrency market has been jumping and dropping sporadically throughout 2018, the general trend is a deep downward slope. If Facebook goes on to a launch, it will be the first large tech company to enter into this type of project.

Despite all the security and privacy scandals that surround the company, Facebook’s user numbers continue to grow steadily. Nearly 2.3 billion people are active every month on the social media website, according to Statista, so if anyone can bring huge numbers of people to blockchain, it would probably be Facebook. JB

source: technology.inquirer.net

Otaku Coin, new virtual currency created for anime fans

A new virtual currency, based on blockchain technology used in cryptocurrencies like Bitcoin, is under development. Its target market are fans of anime, manga, games and other interests in the realm of Japanese subcultures.

Aptly called “Otaku Coin” the cryptocurrency came from online store Tokyo Otaku Mode (TOM) which specializes in selling various anime, manga and game-related products.

TOM aims to make Otaku Coin a means for fans worldwide to support the anime industry and other industries connected to it, like plastic figures, light novels, collectible merchandise, and more.

The word “otaku” refers to someone with an obsessive interest in a particular topic. Contemporary use refers to fans of anime, manga and games, but there are also train otakus, military otakus, among others. The English vernacular has the words “nerd” and “geek” as counterparts.

Otaku Coin will launch sometime this June. Like other cryptocurrencies, anime fans can “mine” Otaku Coins by watching anime, sharing content and writing reviews. They could also cash in through an Otaku Coin issuer.

The Coins can then be used to support new projects in development or purchase goods at events. Otaku Coins could also be earned as rewards for supporting projects by big companies and creators directly. It could be a new anime, manga or an independent game.

In a way, the Otaku Coin system works like crowdfunding setups such as Patreon and Kickstarer, except it uses cryptocurrency.

It has been known to fans for some time that the anime industry in Japan has been struggling. Creators are paid low salaries and are forced to work within very tight deadlines, making it hard to recruit new talent.

Thanks to Otaku Coin’s apparent mandate to preserve the anime industry, support from individuals like Palmer Lucky of Oculus Rift and Christopher Macdonald of Anime News Network, and famous virtual YouTuber Kizuna Ai have come in, reports SoraNews24.

Meanwhile, how Otaku Coin will work in the anime industry’s favor remains to be seen. JB

source: technology.inquirer.net

Australia to sell $13M bitcoins confiscated as proceeds of crime

CANBERRA, Australia — An official says about $13 million in bitcoins will be auctioned in Sydney in June after Australian police confiscated the digital currency as proceeds of crime.

Ernst & Young transaction partner Adam Nikitins said Tuesday that the accountancy firm is running the process, which is only the second such bitcoin auction in the world after the U.S. Marshals Service sold 144,000 bitcoins over two years ending in 2015 that had been confiscated from Ross Ulbricht, who founded the online drug bazaar Silk Road.

Bidders can register from Wednesday until June 7 for the 24,518 bitcoins on offer. The 48-hour sealed auction will take place from June 20.

Based on Tuesday’s bitcoin price of $533.80, the cryptocurrency is valued at almost $13.1 million.

source: business.inquirer.net