B2c2 bitcoin wallet
This article briefly outlines what cryptocurrency exchanges typically do, the Australian regulatory framework that governs them and considers particular legal issues that have arisen or are likely to arise in the future. Cryptocurrencies emerged as a result of the Cypherpunk vision of peer-to-peer electronic cash permitting online payments to be made without going through a financial institution. Instead, they are mediated by centralised cryptocurrency exchanges. A cryptocurrency is a particular type of digital currency which is open-sourced, distributed, math-based and operates peer-to-peer, and has an equivalent value in central bank fiat currency like AUD or USD.
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- Crypto-matters - Volume 1: Legal developments on crypto-assets and Blockchain technology
- News Aggregator
- Battle for dominance heats up in cryptocurrency trading
- Japan's SBI in talks to set up cryptocurrency JV with foreign financial firms
- B2C2 Appoints Rob Catalanello CEO of US Operations
- Behind ‘Prime Broker’ Buzzword Lies a Complex Strategy Game for Crypto Firms
- FireBlocks signs on B2C2 cryptocurrency liquidity provider
- Planning Ahead: What Role Will Cryptocurrency Play in Treasury?
- SBI opens cryptocurrency dealing desk
- Crypto Market Maker B2C2 Sues Quoine Exchange for $13.7mln
Crypto-matters - Volume 1: Legal developments on crypto-assets and Blockchain technology
There are several other reasons why Cayman is an attractive jurisdiction for FinTech business, including the fact that it offers tax neutrality, a stable political system, judicial ties to the United Kingdom and support via sophisticated professional services firms.
There is always a balancing act between adopting a pro-industry approach to exciting new business and maintaining the highest standards of governance. Cayman, like the rest of world, is considering how best to regulate and place controls on the cryptocurrency space. In this article, we consider recent case law and developments regarding the treatment of this FinTech business and the legal status of this relatively new and evolving asset class, to predict how the Cayman Islands and other jurisdictions may treat crypto assets and deal with disputes as they arise.
Prior to that watershed moment, other Blockchain pioneers had tried to create digital currencies with more limited success. By , cryptocurrency exchanges were cropping up. Shortly after that, more coins and crypto assets were created under a variety of brand names.
The market was relatively sophisticated by , when Ethereum arrived on the scene, and ICOs began taking place. Fast forward to and there are literally thousands of unique digital currencies. There is now a wide-ranging investor base for digital assets and many retail stores are accepting cryptocurrencies as a method of payment.
With the advent of dedicated ATMs and mainstream use of Blockchain technology, it appears that cryptocurrencies in one form or another are here to stay. Accordingly, as Bitcoin and its competitors become more embedded in our daily lives, there is an increased focus on regulation and a desire to determine the legal status of this relatively new and evolving asset class. However, that focus and desire creates a number of issues from a philosophical standpoint. Many early adopters of Bitcoin and other cryptocurrencies were attracted to the ideology of cryptocurrencies rather than the financial benefits.
It is no coincidence that Bitcoin gained traction and support following the Global Financial Crisis, when anger and apathy were at an all-time high. The Bitcoin white paper contains this statement: " The root problem with conventional currencies is all the trust that's required to make it work.
The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. It is against that ideological background that the judiciary, regulators, legislature and industry stakeholders must consider how to apply existing principles if possible and also develop a satisfactory regulatory regime in respect of cryptocurrencies and related digital assets.
An issue which has arisen repeatedly in the recent past and will continue to arise is, whether Bitcoin and other cryptocurrencies should be treated as property in the eyes of the law.
The answer to this question has profound consequences, and has been the subject of a number of decisions. For example, how can misappropriated assets be recovered and remedies sought to trace them, if the asset is not property and therefore there is no proprietary interest to protect?
As will be seen, the position is not as straightforward as it initially appears. If not a form of personal property as it is neither a chose in possession nor a chose in action , is it a new hybrid category of personal property, a "virtual chose in possession"?
Although it lacks certain of the fundamental characteristics, it may soon become a form of money. It is generally accepted that a bitcoin, to pick a particular type of cryptocurrency, cannot be a chose in action - not least because the holding of a bitcoin gives the holder no rights against any other person. Furthermore, a bitcoin is not a chose in possession because, in the absence of statutory intervention, one cannot take possession of an intangible such as a block added to a chain on a digital system.
It is settled law, at Court of Appeal level in England, that choses in action and choses in possession are the only two categories of personal property see Your Response Ltd v.
So this poses quite a problem regarding how bitcoin and other crypto assets should be, and whether they can be, classed as property. This does not mean that the holding of a bitcoin could not in principle be a type of personal property at common law. It could be viewed as being "other intangible property". Different crypto assets have different fundamental features however, so a further problem is how to define different types of asset under one definition of "crypto assets".
We consider below how the courts have been dealing with the issue of how to treat cryptocurrency. In v Money-4 Ltd  EWHC Ch , the claimant alleged that the defendant cryptocurrency exchange had misappropriated her cryptocurrency in that case, Bitcoin and Ethereum , and sought a proprietary injunction pending trial, preventing the defendant from dissipating the cryptocurrency which had allegedly been misappropriated.
The injunction was granted, and continued following an inter partes hearing. Although the decision lends support to the proposition that English law will treat cryptocurrency as property such that a proprietary injunction may be granted to preserve it pending trial , it appears that the point was not actually argued. In AA v Persons Unknown  4 WLR 35, hackers had installed ransomware on a victim's computer systems, rendering those systems unusable.
Payment was made in Bitcoin. Subsequently, the victim's insurer AA , which had funded the ransom payment, instructed investigators to trace the destination of the Bitcoin payment. The payment was traced to an account with the Bitfinex exchange. As an aside, the facts of the case provide a useful reminder that Bitcoin payments are not, contrary to popular belief, wholly anonymous or untraceable.
Although the 'Persons Unknown' could not be identified, the benefit of an injunction would be that Bitfinex would be obliged to freeze the relevant account. The court considered whether Bitcoin could fall within the definition of 'property', such that it was amenable to a proprietary injunction. After considering authorities on the nature of property in English law. Although this decision lends considerable support to the proposition that English law will treat cryptocurrency as property, the judgment is subject to two serious limitations:.
The application was made ex parte, and accordingly no contrary argument was considered by the court. The court only needed to be satisfied, at the interim injunction stage, that "there is at least a serious issue to be tried" para.
Accordingly, even if there had been full argument, it would be dangerous to rely upon this decision as conclusive proof that English law recognises Bitcoin as a form of property.
In B2C2 v. Trading occurred automatically through computer algorithms. Due to a coding error, B2C2 sold cryptocurrency to Quoine for times its actual value. Quoine unilaterally reversed the relevant trade and B2C2 sued. At trial, the High Court allowed B2C2's claim for breach of contract and breach of trust. However, it had apparently been conceded that cryptocurrency was a form of property, and the court heard no argument on the point. On appeal, the Court of Appeal reversed the trial judge's findings on breach of trust, and declined to determine whether cryptocurrency could be property.
There are, however, difficult questions as to the type of property that is involved. It is not necessary for us to come to a final position on this question in the present case.
Cryptopia  NZHC appears to be the only decision anywhere in the common law world where the proprietary status of Bitcoin was fully argued and ruled upon. To understand the judgment, it is necessary to explain how the issue arose. Cryptopia was a cryptocurrency exchange. It had started as a small-scale operation, but had grown as the price of Bitcoin increased. Its Terms and Conditions had changed over time, and were expressed in language which was "not ideal", but the latest version referred to Cryptopia holding assets "on trust" for investors.
Investors would deposit their own cryptocurrency eg Bitcoin into a 'wallet' owned by Cryptopia, and could then exchange their cryptocurrency for another eg Ethereum. Investors' deposits were pooled by currency ie, all Bitcoin deposits would be in one wallet, all Ethereum deposits in another wallet etc. Some, but not all, of the wallets were hacked, and Cryptoassets were misappropriated. Investors in the accounts which had not been hacked argued that they had a proprietary right to receive the full value of their deposits.
By contrast, investors in the accounts which had been hacked would be better off if investors were treated as having a purely personal right rather than a proprietary right , because that would result in all the Cryptoassets being pooled and shared among all the investors. It therefore became necessary to determine whether investors had a proprietary right to the Cryptoassets held in their account.
Without question they are capable of being the subject matter of a trust. This first instance judgment lends the strongest support yet for the proposition that the common law treats Cryptoassets as a form of intangible property.
However, with respect, it is possible to make various criticisms of the reasoning:. There does not appear to have been any expert evidence on the nature of the various cryptocurrencies in issue, and the judge appears to have treated them all alike.
There were apparently "several" different cryptocurrencies misappropriated from Cryptopia para. The judgment does not analyse the technical characteristics of these various cryptocurrencies, and how those characteristics might inform the question whether they should be treated as property. The only attempt in the judgment to explain the technical nature of crypto assets is at para.
That quotation simply makes clear that there is a wide range of different crypto assets, each with their own peculiar features. This is an important point. However one defines the concept of 'property', the question whether any given crypto-token satisfies that definition will depend on the characteristics of the relevant token. Given the wide range of instruments which carry the label 'crypto asset', it is likely that some will fall within the definition, and some will not.
The judgment makes no effort to distinguish between the different categories. Linked to this, part of the judge's reasoning included what he described as "public policy arguments" see paras The judge considered that "honest commercial developments may very well be hindered by a failure of the general law to recognise crypto assets as property" and that " Cryptocurrencies have also become popular with honest people as a method of effecting payments and of investing.
The traditional banking sector is itself widely reported to be already using block chain technology and to be planning to create trading platforms for cryptocurrencies. The sole basis for the finding is an article from Bloomberg which, with respect to the judge, says nothing of the sort. If supposed public policy arguments are to be used as a justification for developing the law in a novel way, it is desirable that such decisions are made on the basis of proper evidence as to the social and commercial consequences, rather than a single news article.
The absence of expert evidence as to how different cryptocurrencies work appears to have led the judge to draw inaccurate comparisons between crypto-tokens and traditional bank deposits. At para. This is, with respect, a misunderstanding of how most cryptocurrencies work. In the case of electronic bank records, the electronic ledger is simply a record of a chose in action that the customer has against the bank where the account is in credit or that the bank has against the customer where the account is overdrawn.
It is that chose in action which is the 'property' held by the depositor. It is certainly possible to devise a crypto-token which has 'realworld' legal rights attached to it a sort of virtual bearer share or bearer bond , and there would be a strong case for treating such a token as an item of property.
However, the same reasoning cannot be applied to Bitcoin and other similar cryptoassets, which do not have any 'real-world' legal rights attached. The UK Jurisdiction Taskforce Legal Statement recognised that the rationale and design of crypto assets may create some practical hurdles to legal intervention but "that does not mean that crypto assets are outside the law". The judiciary, in different parts of the common law world, have followed that line of thinking and the cases summarised above are worthy of deeper analysis.
The Law provides a licensing regime for providers of a " virtual asset service". Section 4 of the Law provides that any person carrying on or purporting to carry on a " virtual asset service " must be registered or licensed or to have received a waiver from such requirements in accordance with the Law. The Law aims to maintain certain standards in respect of licence-holders by requiring the employment of personnel with the necessary skills, appropriate capital adequacy and cybersecurity measures and accounting systems section 8.
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Battle for dominance heats up in cryptocurrency trading
This article discusses a recent case before the English High Court AA v Persons Unknown  EWHC Comm where a claimant successfully obtained an injunction in respect of Bitcoins transferred following a ransomware attack which were ultimately traced to a wallet held at a crypto currency exchange. The case drew attention to the difficult situations businesses find themselves in following ransomware attacks, and highlighted the role of Bitcoin and other crypto currencies as the preferred payment method for criminals behind cyber-attacks. Law enforcement guidance is that generally businesses should not pay ransoms to decrypt files. However in practice victims may find themselves in the unenviable position of being forced to either make a ransom payment to decrypt their systems or suffer greater financial harm from lost activity. We discuss some of the steps companies can take in the aftermath of a ransomware attack, and if forced to make a ransom payment, how the chances of recovery may be maximised through the swift engagement of crypto currency tracing specialists. The hackers left a note to the Insured on their encrypted system with instructions on how they could be contacted to pay the ransom and obtain the necessary decryption tools. The Insurer instructed an incident response company to handle communication with the hackers.
Japan's SBI in talks to set up cryptocurrency JV with foreign financial firms
The dispute arose out of transactions which took place in April when a UK-based electronic market maker, B2C2 Ltd, placed orders on a Singapore cryptocurrency exchange, Quoine, to sell Ethereum in exchange for Bitcoin. Due to a "technical glitch" on Quoine's platform, Quoine's software program was unable to connect to the database necessary to establish the true market price. As a result, the software program tried to establish the market price by reference to the only data available to it, which was the data arising out of B2C2's seven orders. This data also caused Quoine's platform to reassess the leveraged positions of two margin traders Margin Traders incorrectly and to close out their positions to prevent further loss, automatically placing orders to sell their assets to B2C2 at B2C2's offer price. B2C2's seven orders to sell Ethereum for Bitcoin were therefore executed at a rate approximately times the precedent rate traded on the same day.
B2C2 Appoints Rob Catalanello CEO of US Operations
Cryptocurrencies are dominating the news headlines. The price of Bitcoin continues to hit record high, Dogecoin is now being reported to fund a mission to the moon by Space X and the Commonwealth Bank of Australia announced that it would be the first Australian bank to allow its customers to buy, sell and hold cryptocurrency. The insurance industry is also starting to consider how they might be able to provide cover for these products if they are stolen. However, as products only exist online, largely stored in e-wallets means that these products are at risk of theft from cyber-criminals. If the worst happens, what options exist for parties to seek to recover them or are they simply lost to cyberspace?
Behind ‘Prime Broker’ Buzzword Lies a Complex Strategy Game for Crypto Firms
Laxman Pai, Opalesque Asia: Crypto trading platform Caspian has partnered with the cryptocurrency market maker and liquidity provider B2C2 as part of a drive to attract more institutional investors wanting to increase their exposure to cryptocurrency markets. A press release from Caspian said that institutions can access Caspian's crypto trading platform and ecosystem to complement B2C2's existing liquidity provisions. The release quoted Robert Dykes, CEO of Caspian as saying: "Our goal is to build an ecosystem of partners that can help traders to work effectively and efficiently, so we are very happy to have B2C2 as partner. While Caspian provides a suite of tools designed to make accessing and trading these different markets much more easy, B2C2 is experienced in providing the OTC liquidity that this type of investor requires, it said. Users of the Caspian platform will be able to "point and click" trade liquidity streamed by B2C2 via API connectivity directly into Caspian. As well as a recent partnership with Coinbase, the trading platform is actively partnering with wallet providers, exchanges, custody services and more to attract institutional investors to their platform and to the crypto industry in general. According to the press release, Caspian's crypto trading platform has
FireBlocks signs on B2C2 cryptocurrency liquidity provider
Digital assets such as Bitcoin or other cryptocurrencies are fundamentally different from traditional assets, and institutional investors in digital assets have particularly challenging needs with respect to custody. Custody firms are evolving, trying to determine how best to meet the needs of such institutional customers. Each owner of a digital asset has a private key—a unique number generated by a digital asset wallet.
Planning Ahead: What Role Will Cryptocurrency Play in Treasury?
Bitcoin slipped on Friday as reports of U. President Joe Biden mulling a tax hike on wealthy Americans drew stronger selling pressure in the spot market. Other alternative cryptocurrencies such as ether , binance token, XRP , dogecoin , suffered bigger pullbacks, having outperformed bitcoin in recent days. As per The New York Times , President Biden is planning to roughly double the tax on capital gains or proceeds earned from selling assets to The news hit the wires late Thursday and tanked the U. The U.
SBI opens cryptocurrency dealing desk
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Crypto Market Maker B2C2 Sues Quoine Exchange for $13.7mln
Published on: April 15, The High Court has held for the first time in New Zealand that cryptocurrencies are property under the Companies Act This means that the liquidators will not be able to distribute the cryptocurrencies held on trust to the creditors of Cryptopia. Creditors' expected returns accordingly dropped from a likely 85 per cent to less than 50 per cent.