Lightning Network Gets Popular, ASIC Gets Tough: Best of the Week

Catch up on last week's top stories.

Lightning strikes

The Lightning Network, an add-on to the Bitcoin blockchain that is makes it possible to perform small transactions quickly, has seen massive growth in adoption over the last couple of weeks.

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The explanation for this could be the public squabbling of the two development teams behind rival cryptocurrency Bitcoin Cash; the drama caused a major market crash. Bitcoin could be appearing more attractive once again, as it is relatively stable and time-tested.

The Lightning protocol works by conducting transactions off of the main blockchain and adding them later, which relieves congestion.

ASIC cancels broker’s licence

AGM Markets, an Australian foreign exchange broker, was found earlier this year to be advising its customers how to trade, which is illegal in Australia. The Australian Securities and Investments Commission, the country’s financial watchdog, revoked the firm’s licence as a result.

The process was in stages. First, ASIC warned the public. Second, it received an order prohibiting the firm from removing money from the country. Third, it froze the company’s bank accounts, and then it managed to get a travel ban applied to its CEO, Yossef Ashkenazi.

Finally, the company’s licence was revoked and it was put into liquidation. ASIC found that Ashkenazi was responsible for irresponsible and dishonest conduct on the part of the company and that he was neither trained nor competent to provide financial services. He has been banned from working in the field for eight years.

Bitcoin ETF approved in Switzerland

Amun AG, a Swiss startup, received approval from the Swiss authorities to sell a cryptocurrency-based ETF. The investments are to be based on the collective performance of five of the most valuable cryptocurrencies – Bitcoin, Ethereum, XRP, Bitcoin Cash and Litecoin. They will be sold at the SIX Swiss Exchange, the country’s primary stock exchange.

This official approval means that it is the first company in the world to sell such contracts on a national exchange. Companies in the US have been trying and repeatedly failing to receive approval from their regulator.

ASIC licence now costs millions

ASIC, the Australian watchdog, is now charging brokers 4 million USD for a trading licence. In addition, it takes between 18 and 24 months to get approval from the time of filing.

This is a response to the popularity of the Australian licence, which technically allows companies to offer services to European customers. This is especially attractive nowadays, when regulations in the EU have become extremely restrictive for these companies.

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ASIC has made it difficult to achieve a license because it fears international repercussions.

Alpari hops island

Foreign exchange broker Alpari is closing down its branch in Belize, intending to move operations to Saint Vincent and Grenadines instead. Customers that do not wish to be transferred have until the end of this year to close their accounts.

According to the company, the decision is part of its new “strategic direction,” and only a small number of customers will be affected.

One stablecoin to rule them all

Stablecoins are cryptocurrencies pegged to the value of a fiat currency of commodity. The first was Tether, and it was for a long time a novelty in the industry, but now stablecoins have been popping up everywhere. This is because exchanges, banks and governments alike are all issuing them, attracted by their relative stability.

In this analysis, Finance Magnates looks at this subject and examines the top three stablecoins on the market right now. Which will be the one to last?

Nerd talking about nonsense

The Bitcoin Cash civil war has been amusing, but also had some serious consequences – mostly for Bitcoin Cash itself. The cryptocurrency is no more, having split into two, new coins – Bitcoin ABC and Bitcoin Satoshi Vision. The disagreement is based on ideology, as the two camps disagree on what Bitcoin is supposed to be.

Trading venues must decide how they will list the two new cryptocurrencies. Many have called Bitcoin ABC ‘Bitcoin Cash’, thus signalling that they consider this coin to be the legitimate inheritor of the name. However, it is not yet entirely clear which of the two will be more popular amongst users.

However, there is no doubt that the effect on the value of the coin has been devastating, and that the whole market has been dragged down with it.

In this analysis, Finance Magnates examines the two different coins and asks industry figures to share their opinions.

Interview with managing director of ErisX

ErisX is a cryptocurrency exchange which, once open, aims to cater to wealthy companies. Ian Grieves, Managing Director and Head of Product at the firm, has worked for many years in the financial industry.

Finance Magnates talked to Grieves about the cryptocurrency derivatives that his firm plans to sell, why it is different to Bakkt, other licenses that it intends to achieve, and why it is the missing link in the cryptocurrency sector.

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