The cryptocurrency exchanges have a responsibility to take this industry to the next level. Huobi Labs, a subsidiary of Huobi China, is looking to enter the blockchain industry. By setting up a $1 billion blockchain fund, the venture will mainly focus its attention on the Chinese market. The venture will also see a key partnership with Tianya Community Network Technology, a social networking platform in the country.
A lot of companies around the world have shown a desirous interest in blockchain technology. All be it, most firms aren’t too sure Bitcoin has a future, they see merit in the underlying technology. Especially financial institutions and supply chain service providers can benefit from a distributed ledger [DLT] based venture.
In China, there is a very big interest in DLT as well. Huobi Labs acknowledges the potential for blockchain in the Asian region. By teaming up with Tianya Community Network Technology, a new $1bn blockchain fund is created. This money will be used to fund startups and ensure the DLT industry will continue to thrive in China.
Huobi Labs is also set to move its headquarters to Hainan Coast. It is still in China, but the new location is a lot closer to its partner Tianya. From this location, the development of a Global Cultural and Creative Blockchain Lab will begin to take shape. If successful, the joint venture will collaborate with universities to advance blockchain research.
Huobi is known as a trading platform to many of the crypto enthusiasts around the world. The Chinese entity supports dozens of cryptocurrencies and digital assets alike. By now, the focusing part of Huobi China is on the blockchain, the group can tackle both nascent industries at the same time. The Huobi trading platform has made inroads in 130 countries around the world.
It is not the first time Huobi Group aims to improve its presence within the region. The firm set up trading centers in various countries, including Singapore and Japan. But gaining a bigger foothold in China will prove to be challenging. Dozens of blockchain ventures are competing in this space, but the advantage that Huobi has is that there are not that many incubators and research centers.
How this will affect the future of blockchain in China, remains undetermined. Government officials remain wary of this technology and cryptocurrencies alike. With a native research center working with international universities, a paradigm shift appears to be on the horizon. Additionally, the Huobi Labs incubator will help foster a better ecosystem for these emerging technologies.
A Twitter user comments:
“Awesome! This is a great initiative taken by Huobi China.”
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U.S Treasury Secretary: Crypto exchanges and service providers MUST register with FinCEN
The Financial Action Task Force [FATF], an inter-governmental body that includes the most influential countries in the world such as the United States, Russia, China, United Kingdom, and Germany, has taken the first step towards providing better regulatory clarity that was much sought after by several businesses in the cryptocurrency space. However, the guidelines set up by the commission that was created for tackling money laundering and terrorist financing could create more problems than good to these firms, particularly exchanges and custodial service providers.
One of the main challenges crypto-service providers will face will be with regard to data collection as they will be required to not only “identify” people who will be transferring funds but to whom it is being transferred to, forcing them to throw away one of the key principles of cryptocurrencies. The ruling that applies to any transaction worth over $1000 will see several service providers, no matter how big or small, introducing stringent KYC/ AML procedures. Additionally, these guidelines will be imposed on all the member countries, with the risk of not following being a potential blacklist.
The new guidelines was one of the important topics that were discussed at The FATF week. The event was a six-day meet held in Orlando, Florida, which had representatives from 205 members of FATF global network, including the World Bank and the United Nations. U.S Secretary of the Treasury, Steven T. Mnuchin, addressed this topic at the closing remarks today. The Secretary explicitly stated that all the cryptocurrency service providers will have to follow the same Anti-Money Laundering/ Combating Financing of Terrorism [CFT] procedures that has been set-up for other financial institutions in the United States.
The Secretary stated,
“For example, service providers must register with FinCEN. They must also institute an AML program, and recordkeeping and reporting measures, including filing suspicious activity reports.”
The new guidelines outlined by FATF restates that firms involved in providing cryptocurrency services will have to start collecting information about the person who’s transferring funds and to whom it’s being transferred to. Along with this, they will also be required to “develop processes” that will enable them to share the same information to other service providers and regulatory authorities. Service providers will also be required to ensure that its customers are not involved in any illegal activity.
Secretary Mnuchin further stated,
“By adopting the standards and guidelines agreed to this week, the FATF will make sure that virtual asset service providers do not operate in the dark shadows. This will enable the emerging FinTech sector to stay one-step ahead of rogue regimes and sympathizers of illicit causes searching for avenues to raise and transfer funds without detection. “
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