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If we’re not careful, AI recruitment could institutionalise discrimination

Relying too heavily on automation and AI is akin to commercial airlines simply using autopilot: there’s too much on the line to dismiss the importance of human intervention, Oz Rashid writes.

Since recruiting methods are increasingly relying on artificial intelligence (AI), the principles used to identify qualified individuals have come into question.

While these machines seem like a worthy replacement to subjective hiring managers, they can perpetuate historic company and algorithmic bias, discriminate against an applicant’s gender or age, and erode the laws in our democracies.

Therefore, the world’s workforce shouldn’t be selected through AI alone.

Trained professionals must be knowledgeable about AI recruiting methods and implement sufficient safeguards to keep programs ethical and the world safe.

Cases showing AI bias already exist

While AI has the potential to improve many aspects of the workplace, it also has the capability to undermine acceptable hiring practices and exacerbate wealth inequality.

A 2022 Cambridge University study revealed how voice and phrenology analyses are unreliable, biased methods for identifying ideal applicant traits.

Phrenology, a pseudoscience that claims skull patterns are linked to particular human characteristics, has been heavily contested, and voice analyses can be regarded as another underdeveloped practice not worthy of determining who deserves a job.

Since AI hiring tools can unintentionally discriminate against others, they can also be applied consciously as a way to manipulate a candidate pool.

A case from 2018 showed that while Amazon’s recruitment tool was designed to solicit applicants of all genders, the hiring data used to train the tool was male-dominant.

The software can easily be hardwired to reject applicants with disabilities, a specific racial background, or based on physical profiles alone.

For instance, a case from 2018 showed that while Amazon’s recruitment tool was designed to solicit applicants of all genders, the hiring data used to train the tool was male-dominant.

This caused the machine to interpret women as incompatible candidates and reject their applications.

Although this stemmed from biased data alone, this detailed analysis could screen applicants on information they didn’t even know they were sharing.

In 2019, the company HireVue released software that ranked job applicants’ employability based on their facial movements, word choice, and how they spoke.

Algorithms can have biases, too

Prior to AI recruitment tools, Applicant Tracking Systems (ATSs) have been popular applications used since the 90s.

ATSs are helpful for sourcing, filtering, and analysing candidates throughout the entire recruiting and hiring process, but they can exacerbate workplace bias, and many have become outdated.

Therefore, replacing old ATSs with modernised tools is smart as long as experienced professionals are still involved.

All humans have an unconscious bias to prefer things familiar to them, which can directly skew the hiring data a machine learns from.

Too often, hiring managers and other business leaders think that AI will replace the jobs of talented HR teams because it’s less biased and more efficient.

In reality, even the most carefully programmed AI will have algorithmic biases and can make disconcerting decisions.

All humans have an unconscious bias to prefer things familiar to them, which can directly skew the hiring data a machine learns from.

Managing AI use in recruiting is crucial for protecting the rights of every citizen and ensuring that society has access to opportunities that keep them and their families alive.

This kind of regulation can only be done through proper safeguards and monitoring.

We shouldn’t rely on autopilot too much

From the moment candidates are sourced, machine learning and predictive algorithms choose which individuals should see a job advertisement and which should be accepted.

A study from Northeastern University in Boston and USC reported that Facebook advertised 85% of cashier jobs to women and showcased a taxi company’s vacancies to audiences that were 75% black.

This situation most likely resulted from an AI’s independent evaluation of what applicants each company preferred.

Relying too heavily on automation and AI is akin to commercial airlines simply using autopilot: there’s too much on the line to dismiss the importance of human intervention.

While that behaviour isn’t inherently malicious, it’s in violation of US Equal Employment Opportunity laws.

Unfortunately, 79% of organisations used a combination of automation and AI for hiring in 2022, and the majority are completely unaware that their system is producing biased outcomes.

Relying too heavily on automation and AI is akin to commercial airlines simply using autopilot: there’s too much on the line to dismiss the importance of human intervention.

Future-proofing efforts are everyone’s responsibility

In the past, organisations may have been shielded from being held accountable for their biases.

However, new legislation like New York’s Local Law 144 guarantees transparency and accountability in AI hiring.

The European Union’s upcoming AI Act is somewhat more opaque as to what type of remedies will be in place to prevent AI’s hiring bias, but the intention to create protections is there.

Meanwhile, organisations should already be educating themselves on which protocols protect them and their applicants.

Meanwhile, organisations should already be educating themselves on which protocols protect them and their applicants.

Minimising the risk of exacerbating discrimination in the recruitment and hiring process can be achieved through the implementation of safeguards such as auditing systems designed to detect bias and conducting thorough reviews of the data sets used by AI learning.

Vendors should also be able to provide transparency within their algorithms, including how they were trained, what data was used, and what assumptions were made.

This information should be accompanied by clear explanations of their efforts to mitigate bias and verified compliance to conduct ongoing testing that will catch future biases.

AI can still improve existing hiring practices if incorporated safely

Permitting AI to fully control an entire company’s hiring processes should never be acceptable.

This allowance disengages employers from the people they need, and even worse, it could perpetuate discriminatory hiring decisions.

To counter this, we must learn how to incorporate AI safely and effectively into our existing hiring practices. This will benefit the long-term health of our organisations, the workforce that supports them, and global economies.

AI is a marvellous tool with a unique value proposition, but there is a balance that we need to strike to produce transformational results and keep humankind in control of its future.

_Oz Rashid is the CEO and founder of MSH, a global tech and talent solutions company.
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Welcome, Crypto, to the Fiery Cauldron of U.S. Presidential Politics

Before the push for the White House really gets rolling, digital assets – including bitcoins and CBDCs – are being hefted as ideological effigies, but will it matter?

Whether the crypto industry wants the spotlight or not, digital assets are among the earliest talking points in the 2024 U.S. presidential election, with the most prominent of the new candidates even invoking bitcoins in his campaign opener as evidence of President Joe Biden’s missteps.

In an election in which the heaviest fireworks will likely be seen on the side of the Republican challengers, former President Donald Trump – occupying the role as Biden’s leading nemesis – is himself facing an early-days threat from Florida Gov. Ron DeSantis, who immediately staked out crypto as a kind of political shorthand.

“The current regime, clearly, has it out for Bitcoin,” DeSantis said from his campaign’s Twitter Spaces launch pad, using crypto to represent innovation and personal freedom. “Bitcoin represents a threat to them, they’re trying to regulate it out of existence.”

If digital assets keep figuring into presidential politics, they’ll likely feature as a stand-in to illustrate the perceived abuses of the federal government, according to industry insiders and political experts. But the attention may not contribute to the policy progress crypto businesses crave, because the sector is waiting for comprehensive rules, not political sentiments.

So far, Biden’s administration is being accused of squeezing emerging crypto businesses and trying to set up a central bank digital currency (CBDC) to spy on citizens, according to DeSantis and one of Biden’s challengers from his own party, Robert F. Kennedy, Jr.

For DeSantis, his pro-crypto position also separates him from chief rival Trump. The digital assets views of the Republican frontrunner for the 2024 nomination have historically been rooted in distrust, with Trump having declared in 2019 that he was “not a fan” of bitcoin and other cryptocurrencies, “whose value is highly volatile and based on thin air.” However, more recently Trump profited from his own series of non-fungible tokens (NFTs), so his position remains murky.

Two weeks before DeSantis opened his campaign beside tech mogul Elon Musk, he sought to make a political moment out of his state’s “ban” of a U.S. CBDC. Experts in the commercial law Florida used to act against a potential digital dollar have said Florida’s effort isn’t a ban at all, but that might not matter for political supporters impressed by DeSantis’ zeal.

“He seems to understand that private solutions being developed in the crypto markets are likely to be superior, in part because they pose fewer risks to the individual liberty of the public,” said Dave Weisberger, CEO of CoinRoutes, a trading tech startup in DeSantis’ home state.

But DeSantis is generally vague about his defense of cryptocurrencies, and his remarks don’t seem to acknowledge they are online instruments that can operate outside the whims of sovereign states. When he says that Democrats – given another four years – will “probably end up killing it,” it seems to suggest the U.S. lawmakers would have more reach than they do, and that crypto won’t find homes in other global jurisdictions, such as in Europe.

“It’s more about how he’s trying to paint himself as a fresh face,” said Ron Hammond, director of government relations for the Blockchain Association in Washington. “He’s trying to say ‘I’m the younger gun here who’s trying to get something done.’”

In the know

A rival Republican candidate, Vivek Ramaswamy, has argued the Florida governor doesn’t know the topic well. The biotech entrepreneur told CoinDesk he’s pro-Bitcoin because he sees it as a “decentralized alternative” to the U.S dollar, improving the country’s financial infrastructure by presenting “a source of competition to the existing system.” And he says he understands it much more than DeSantis.

Other notable Republican candidates, such as Sen. Tim Scott (R-S.C.) and his state’s former governor, Nikki Haley, have reserved comment on the financial movement. Despite his position on the Senate Banking Committee that could help decide U.S. crypto’s fate, Scott has taken the most neutral possible stance, saying lawmakers should take a “thoughtful, bipartisan and balanced approach” to overseeing the industry in the U.S.

Among the Democratic challengers to standard-bearer Biden, Kennedy – who also holds other views that overlap with Republican positions – is fervently pro-crypto.

“Cryptocurrencies, led by bitcoin, along with other crypto technologies are a major innovation engine,” Kennedy wrote in a tweet earlier this month. “It is a mistake for the U.S. government to hobble the industry and drive innovation elsewhere.”

The most popular of the pro-crypto candidates among voters, DeSantis, still trails well behind Trump in primary polling, but the fact that there are multiple candidates saying nice things about digital assets is a positive for some in the sector.

“We now have three presidential candidates, spanning both political parties, who explicitly support the digital asset industry,” CoinRoutes’ Weisberger said. “While Republicans are trying to make crypto a partisan issue, the industry itself doesn’t believe it should be, which is why the support from RFK Jr. is also potentially important.”

Biden is the only candidate with a federal record on digital assets. So far, his administration hasn’t set down any significant crypto policy, and the financial regulators he picked have taken a staunchly critical view of the industry. His Securities and Exchange Commission chief, Gary Gensler, may be the most antagonistic of the bunch, combating digital assets businesses in courtrooms and with his agency’s rule proposals. And the direct messages from Biden’s Department of the Treasury and his own White House have been increasingly suspicious of the industry.

Though it wasn’t a campaign remark, Biden, who last month formally announced

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Indian Crypto Exchanges Are in Survival Mode, Trying to Extend Their Runways

CoinDCX, CoinSwitch, WazirX and other Indian firms CoinDesk spoke to think they’ll survive the ongoing bear market – here’s how.

Indian crypto exchanges are in survival mode, cutting costs wherever possible, re-negotiating partner contracts, suspending employee pay-hikes, conducting lay-offs, exploring new revenue models and rebranding themselves, all in an effort to extend their financial runways – when they run out of money.

CoinDesk spoke to employees and senior executives at six prominent Indian crypto platforms – CoinDCX, CoinSwitch, WazirX, BuyUCoin, ZebPay and Giottus. Several of these exchanges said their runways range from 21 months to four years, which can, if true, likely take them into the next bull market. CoinSwitch and ZebPay did not share their financial runway timelines.

The survival of India’s crypto exchanges has been a concern since Feb. 1, 2022, when the nation announced stiff taxes – a 30% tax on crypto profits and the more controversial 1% tax deducted at source (TDS) on all transactions. At the time, local industry leaders said they had entered a “period of pain” but that “ultimately, technology always emerges, it always wins.”

Signs of a crypto “brain drain” emerged within weeks. Ten days after the taxes were implemented, crypto trading volumes plummeted, in some cases more than 70%. India’s government then imposed a “shadow ban,” which saw local payment processors cut off banking access to crypto exchanges.

Four months into the imposition of the 30% tax, the industry’s advocacy body was disbanded and enforcement agencies were investigating at least 10 crypto exchanges for allegedly assisting foreign firms launder money via crypto. Soon, the world took note and global industry leaders such as Binance CEO Changpeng ‘CZ’ Zhao claimed India’s taxes would probably “kill the industry” in the country.

By 2023, data revealed crypto traffic in the nation continued its nosedive and that Indians had moved more than $3.8 billion in trading volume from local to international crypto exchanges.

India, as president of the Group of 20 (G-20) in 2023, has prioritized framing globally coordinated rules for the crypto sector. As a result, experts say, it needed to align with the guidelines of the global standard setter, the Financial Action Task Force (FATF) on virtual assets by including Indian crypto business under anti-money laundering rules.

This move, which adds some legitimacy to the sector by way of setting up regulatory oversight, has fueled a little optimism among Indian exchanges on the local industry’s longevity, even if the nation doesn’t change its tax regime, according to several industry officials. But they don’t have an answer to what happens if the tax regime stays the same – and are taking various steps to guard against such a scenario.

CoinDCX

Indian crypto exchange CoinDCX is weathering the storm by diversifying and banking on its recent series D funding of $135 million.

“We have a runway of four years,” under present conditions, said Neeraj Khandelwal, co-founder of CoinDCX and Okto. “Our biggest bet is on our Okto Wallet. We believe DeFi [decentralized finance] will offer 10X value eventually as only 6.5 million DeFi customers exist, while there are 400 million crypto investors.”

CoinDCX has been leading engagement with lawmakers through the industry’s policy advocacy body, Khandelwal said, exemplified by a recent event, and has emerged as a major player in the Indian crypto industry after recent setbacks faced by WazirX, who ostensibly led the industry in policy engagement before CoinDCX.

Its strategy, Khandelwal says, is “investing heavily in innovation and technology,” including hiring in the space “even now” as we “never overhired.”

WazirX

WazirX, India’s biggest exchange by trading volume until recently, continues to survive despite a tumultuous year.

The exchange’s future seemed uncertain when its founder Nischal Shetty moved from India to Dubai to focus on a new project late last year. Later, Indian agencies that were investigating local crypto exchanges raided properties tied to a director of WazirX. Shortly after, Binance CEO Zhao and Shetty were involved in a public spat over who truly controls the exchange – a quarrel that continues to this day.

The events have seen the exchange lay off 40% of its staff. Yet, the exchange has a 21-month runway, said an employee who was not authorized to speak publicly about the company. “But employees who deserve pay hikes won’t be getting them,” he said.

WazirX’s survival strategy is to renegotiate contracts with partners including software vendors, the person said. Unlike some other exchanges, WazirX will not be diversifying. It will stay focused on crypto.

“That’s what the founders enshrined into us,” the person said. “The idea is to survive because [the] Bitcoin halving is going to happen in May 2024 when, we hope, a bull run will come. By then, if things don’t break, we should be around to see it.” The Bitcoin halving is when the total number of bitcoin that miners can potentially win is halved. This happens roughly every four years.

WazirX also plans to “keep chipping away at costs constantly to extend the runway” and capitalize on its 15 million registered users to attract lucrative partnerships, like a recent one with tax solutions provider TaxNodes.

CoinSwitch

CoinSwitch shed “Kuber” from its previous name, CoinSwitch Kuber, and pivoted from being a crypto exchange to a crypto investment platform.

This occurred as India’s taxes, the crypto winter and the ire of Indian agencies all hit the platform hard. CoinSwitch properties were raided by Indian agencies in August 2022.

“CoinSwitch has always been conscious of its expenses,” said Ashish Singhal, the company’s co-founder and CEO. “Today, we are proudly serving more than 19 million registered users, and are excited to grow and evolve with them by providing them with a diverse range of investment options, including fixed deposits (FD), mutual funds, Indian stocks, and more.”

Without giving a timeline on its runway, Singhal said “our healthy runway gives us enough ammunition to invest in our long-term vision – to be a one-stop wealth-tech destination for Indians.”

Singhal also said his company has “strengthened its leadership team by hiring industry experts,” presumably to navigate regulators, even if he added that the recent step to bring crypto businesses under anti-money laundering rules was a “significant positive advancement.”

ZebPay

One of India’s first crypto exchanges, ZebPay, also refused to share a timeline on its runway. But Chief Revenue Officer Nirmal Ranga said it had support from an unnamed subsidiary in Singapore, in the event it loses customers, the bear market extends or things generally go from bad to worse.

“Our internal revenue strategy is to increase the lending value of our customers and concentrate on user growth,” Ranga said. “We are also trying to create interest for institutional investment.”

Given ZebPay’s team has seen crypto’s early up and down cycles, it follows two ways to survive – “use profits made during previous bull runs or use funds from marketing partnerships or investors,” Ranga said. Like WazirX, ZebPay also has a partnership with TaxNodes.

BuyUCoin

Another early player in the Indian crypto space, BuyUCoin, said its runway extends until early 2025.

“By the end of 2024, we will see a good bull run,” said Atulya Bhatt, its co-founder. “Crypto is a seasonal market and every four years bitcoin goes up and down. It will take 10 years for crypto to become completely sustainable.”

Nevertheless, BuyUCoin had to lay off 10% of its 100 people workforce, Bhatt said. At the same time, BuyUCoin has set up sister companies in Estonia and Singapore as part of a global expansion plan.

“Since we have never raised funds, we can now, given interest from partners across the globe,” he said.

Giottus

After FTX’s implosion, crypto entities scrambled to publish proof of reserves. Giottus, a lesser-known Indian exchange recognized for its staking service and multilingual options in the country, said it would provide customers with proof of reserves, while rivals remained silent.

“We have a two-year runway under the current conditions,” said Vikram Subburaj, Giottus’ co-founder and CEO. “Our focus is completely on bringing in operational excellence, building your products right, drastically cutting marketing and acquisition expenses, and reducing perceived risks associated with exchanges.”

In terms of employees, Subburaj said Giottus had a compact marketing team even during bull runs and like others, it partnered with TaxNodes to improve operational support.

Binance, Other Crypto Players Shun Multichain as Bridging Rumors Swirl

With facts hard to come by, a coterie of crypto players are taking action.

Key players in the crypto ecosystem are shoring up their defenses amid growing concerns over the state of Multichain, a major venue for moving assets between different blockchains.

Four days after apparent technical issues started throttling some users’ ability to withdraw tokens from the protocol, wild rumors over Multichain’s safety and the fate of its team are filling the void created by the platform’s silence. A single tweet blaming some cross-chain breaks on “force majeure” has only added fuel to the widespread speculation that something is amiss.

The light-on-facts landscape is pushing a growing number of entities to mitigate risk now – regardless of Multichain’s true state. Their responses are highlighting how crypto bridges create the potential for a world of hurt that goes well beyond the flashiest and well-trodden risk to bridges (getting hacked by North Korea).

The situation is compounded by Multichain’s prominence among bridges. It is the third-largest bridging protocol by transfer volume and total value locked, according to data from Messari and DeFiLlama.

Like most bridges, Multichain uses a mint-and-lock mechanism to move assets between the 92 blockchains it interacts with. For example, if a holder of USDC stablecoin bridges the asset from Ethereum to Fantom via Multichain, the token gets locked up in a smart contract on Ethereum and then issued anew on Fantom – in this case, as a “wrapped” token called anyUSDC.

Multichain’s anyUSDC and other wrapped USDC tokens like it dominate 50% of Fantom’s stablecoin market, according to DeFiLlama. This is in spite of all USDC on Fantom being “bridged” assets instead of “native” that Circle issues directly onto the chain. Thus, all the USDC tokens on Fantom are reliant on bridges to retain their value.

This setup works as long as the bridge does. At the height of Multichain’s troubles this week, it didn’t, and wrapped USDC tokens on Fantom lost their dollar peg. Some arbitrage traders told CoinDesk they bought wrapped USDC tokens at a 30% discount during the fracas over Multichain, which is responsible for 80% of the stablecoins on Fantom.

Binance, the world’s largest crypto exchange, seemingly pointed to the risks of non-native assets Friday with a tweet imploring traders to “remember to check you trust the issuer behind stablecoins you hold.”

The Fantom ecosystem’s high reliance on Multichain hasn’t spooked market participants into a mass exodus quite yet. Overall numbers like total value locked remain rather steady despite some outflows to other chains, according to data from terminal-builder Parsec.

“The multichain bridge is fully operational and safe with Fantom. Whatever is happening internally with multichain has no impact on the bridged assets on Fantom,” Michael Kong, CEO of the Fantom Foundation, told CoinDesk.

Squid Router – a bridging protocol built on Axelar that unlike Multichain uses swaps instead of wrapped tokens to move value across chains – also reported a surge in activity during the Multichain madless. Bridge transactions on Axelar itself increased sixfold during the spike, people familiar with the matter said.

But Multichain’s method of wrapping assets to bridge them has spooked players beyond the stablecoin markets. On Thursday, Binance said it would temporarily suspend deposits in 10 Multichain-bridged tokens “while we await clarity from the Multichain team.”

Bridging aggregation service Li.Fi also took preventative measures yesterday and shuttered access to Multichain.

Amid all this Multichain’s namesake asset MULTI has suffered. It was trading at $3.8 at press time, a 54% drop from where it was before the crisis of confidence began.

Even Licensed Firms Say Opening Bank Accounts Is Hard in Hong Kong #prizmabet

Hong Kong has said it wants to be a crypto hub but its banks are rejecting account opening applications.

Crypto companies’ applications to operate in Hong Kong following its push to reinstate itself as a crypto hub have been piling up, but these companies are finding it difficult to do something as basic as open a bank account.

Applicants told CoinDesk that just eight officers at the Securities and Futures Commission (SFC) are handling around 80 applications, and even licensed firms are running into difficulties when it comes to bank accounts.

“This probably would have been a different story six or nine months ago,” Amy Yu, APAC CEO for crypto bank SEBA, told CoinDesk.

Hong Kong has become a jurisdiction that companies are considering, after regulators relaxed their opposition to the sector, even as other countries look more critically at crypto. Singapore’s financial regulator has made it clear to the market that it will be less supportive of what it considers to be speculative, and the U.S. looks less than friendly to crypto.

Hong Kong’s de facto central bank knows that banking access is an issue for crypto companies. The Hong Kong Monetary Authority (HKMA) has reminded banks that there’s no ban on offering crypto firms accounts, but a roundtable it organized last month, attended by banks and crypto firms, focused only on easing access for firms that already held or which were applying for licenses, an attendee told CoinDesk.

“It was more like a wish list from the regulator,” he said. “Whether the banks fully embrace it is another matter.”

CoinDesk spoke to a C-suite executive at a crypto firm based in Hong Kong that holds a Type 9 license, which allows the company to carry out asset management activities. The company was still unable to open a Hong Kong bank account and relied on overseas banking partners. This executive said that this made on- and off-ramping difficult for potential investors.

“It’s not clear to us what extra information the banks need,” she told CoinDesk. “Internally, they don’t seem sure about what they want from us.”

Facing rejection

Venture capital firm Braeside founder Tak Lo told CoinDesk that “many crypto companies present themselves as other firms other than asset management firms in order to facilitate bank account opening.”

When companies are upfront about what they do, that can mean their applications are rejected.

Prosynergy managing director Louie Lee told CoinDesk that opening bank accounts is an “acute issue” at the moment, and that banks can be “sensitive and restrictive in their approach.”

Amidone all the talk of licensing and regulations in Hong Kong, “not all crypto-related activities require a license,” Lee continued. “You may be operating in an unregulated space, but this does not mean it’s illegal,” he said.

“The process is you apply and you get rejected,” Jehan Chu, founder of crypto venture capital firm Kenetic, told CoinDesk.

Even if firms manage to get accounts, Chu added, “six months later you get it shut down for no reason.” He said that firms try to stay low-profile.

Sometimes firms opt to buy an expensive insurance or investment product so that their relationship is more valuable for the bank.

It’s considered the cost of doing business since banks are for-profit entities after all. But that kind of decision doesn’t make sense for many startups.

Keeping accounts open

Even players who have successfully opened bank accounts “have a lot of uncertainty on whether or not they can continue having that account going forward,” corporate credit card issuer Reap co-founder Kevin Kang told CoinDesk.

This uncertainty means they’re constantly on the look out for new options and opportunities to set up bank accounts.

“They don’t have visibility on when they’re going to be checked,” Kang said, referring to banks examining transactions.

When transactions are targeted by a compliance team within banks, it can mean the company is unable to use that account. Unless they provide a certain amount of documentation within a period of time on those transactions, their transactions may be stopped and sent back.

Firms are subject to the whims of the bank account providers and end up dedicating resources to opening bank accounts.

It’s not the first time an industry in Hong Kong has encountered issues with bank account opening.

Kang points to money-service operators who held licenses from the Customs and Excise Department that enabled them to exchange funds. Banks were reluctant to serve them due to perceived anti-money laundering and counter-terrorist financing risk.

Policies or actions from the regulator may give the banks more confidence such as having deposit requirements, Kang said.

Lee added that it doesn’t help that another Asian financial hub, Singapore, has had trouble with the collapses of crypto companies which did hold licenses, like Three Arrows Capital.

Some local players have stepped into the space, with virtual bank ZA Bank presenting itself as the go-to bank for Web3 businesses.

Following the collapse of crypto-friendly bank Silvergate, “inquiries have increased enormously,” ZA co-head of retail banking Devon Sin told CoinDesk.

Most players who CoinDesk spoke to were optimistic about future discussions on banking between the industry and the regulators.

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Of the roundtable last month, Lee told CoinDesk, “It’s a step in the right direction whereby people can have a constructive discussion with the regulators on their challenges and the regulators are proactively seeking solutions.”

Edited by Nikhilesh De.

Fleeing U.S. Crypto Firms ‘Welcome,’ French Regulator Says #prizmabet

100-odd companies could be registered in France as the just-agreed MiCA EU crypto legislation beds in, Financial Markets Authority officials said

PARIS, France – Crypto companies fleeing U.S. regulatory uncertainty have been offered a welcome in France, by officials boasting a regulatory framework that offers relative predictability.

The European Union member already boasts around 74 registered crypto companies – a number that could surge to 100 as a last round of firms seek to anticipate the EU’s Markets in Crypto Assets rules that were formally signed off by ministers earlier Tuesday.

“In France, we are proud to be pioneers” with the crypto service asset provider regime, known as PSAN, that was legislated in 2019, Benoît de Juvigny, Secretary General of the Autorité des marchés financiers (AMF), told reporters Tuesday.

“If American players want to benefit, in the very short term, from the French regime, and from the start of 2025 from European arrangements, clearly they are welcome,” he added. “We have good relations and discussions with our U.S. counterparts.”

The legal certainty now apparently achieved in France is only recently gained. In January, lawyers were warning that legislative amendments proposed by the national Senate – eventually watered down – could kill innovation.

There are also still some gray areas: French lawmakers are still pondering what kinds of crypto social media influencers should be able to promote. The EU is still deliberating on how to regulate financial services that have no central entity, and Juvigny said the AMF will produce a paper with some ideas in the coming weeks.

But essentially the legal framework is all but nailed down, contrasting sharply with the situation across the Atlantic. In recent weeks, players including Bittrex and Coinbase have quit the U.S., or threatened to, citing the uncertain regulatory environment caused by active regulatory enforcement, combined with no obvious prospect of a crypto law from Washington.

Not easy

France may be predictable and stable, but that’s not the same as being easy or straightforward.

Seventy-four companies, including Binance and Bitstamp, have already been awarded a registration demonstrating basic governance and money-laundering compliance. Firms can also take the further step of seeking a license, if they have enough capital, though no company has yet acquired one.

Under new transitional measures agreed earlier this year as a bridge to MiCA, companies applying as of July will undergo a “reinforced” registration, in which they have to prove they have resilient IT systems and a conflict of interest policy. MiCA itself, set to take effect in 2025, grants the right to serve the pan-European market, and extends wider to include services such as crypto investment, advice and portfolio management.

That web of four different coexisting regimes is complex, as de Juvigny himself concedes – but officials are keen to bat off complaints from the industry that some requirements are impossible to meet in practice, and procedures unduly lengthy.

Complaints

Contrary to some industry concerns, officials say it’s indeed possible for crypto firms to get commercially insured to AMF standards. “I’ve seen the contracts with my own eyes,” Stéphane Pontoizeau, a director at the AMF responsible for supervising market infrastructure and intermediaries, told reporters.

Those who do their homework by studying the AMF’s guidelines will find they can acquire a new status in just a few months, Pontoizeau said – adding that those who find it takes longer often didn’t get their house in order.

With dozens likely waiting in the wings to get registered, there could be around a hundred companies on the “start line” in France before MiCA kicks in, Pontoizeau said – though some, headquartered in other EU member states or serving only the French market, may not seek a full AMF license under the EU law.

And for some, France’s rigor may be the point – such as Circle, the stablecoin issuer which has applied for registration from the AMF, and said it also wants to seek a license.

Together with the ACPR, the arm of the French central bank responsible for vetting crypto companies’ money laundering compliance, “the AMF … have a strong reputation for being a major market regulator that is forward thinking but manages risk well,” Circle’s Vice President for Policy and Regulatory Strategy Teana Baker-Taylor told CoinDesk. “It’s not a light touch jurisdiction.”

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Quotations have been translated from French.

Edited by Nikhilesh De.

Florida’s DeSantis Waging Toothless Campaign Against Digital Dollars, Lawyers Say #prizmabet

The political movement to use state commerce rules to stop central bank digital currencies is based in legal nonsense that has no power to ban anything, experts contend.

The state-level campaign against a U.S. digital dollar made its first foray into established law with Governor Ron DeSantis’ signature on Florida’s effort to block the use of virtual government-backed money in business transactions.

But the Florida governor’s rhetoric that his state is banning central bank digital currencies (CBDCs) as “government overreach and woke corporate monitoring” may not amount to much on paper. Legal experts in this facet of commercial law suggest the state’s effort is nonsensical and potentially harmful for the digital assets sector DeSantis said he’s trying to protect.

“They didn’t ban anything,” said Carla Reyes, an assistant professor at Southern Methodist University’s Dedman School of Law, who has done work in both digital assets law and the Uniform Commercial Code (UCC) that Florida is focused on. “The law does exactly zero of the things that it says that it does.”

The state’s new tweak “expressly prohibits the use of a federally adopted CBDC by excluding it from the definition of money within Florida’s Uniform Commercial Code,” according to the governor’s office. From introduction to his signature last week took just 43 days.

DeSantis – one of the Republican Party’s early favorites as a potential presidential candidate next year – turned his May 12 signing of the law into a political event, claiming it as the start of a potential multi-state push from Republican state lawmakers to counter a digital dollar well before the federal government decides whether to issue it or not. North Carolina has also been considering a measure to oppose a U.S. CBDC, and South Dakota Gov. Kristi Noem recently vetoed a bill to update its UCC in a way she argued would have allowed for CBDCs and “a potential future overreach by the federal government.”

“We’re on offense in the state of Florida,” DeSantis said at a press conference, standing behind a sign reading “Big Brother’s Digital Dollar,” referencing George Orwell’s tale of supreme government control, “1984.” The new law – effective in July – declared digital dollars won’t be considered money in the state’s version of the commercial code.

The UCC represents an accord among states, which have largely adopted this common set of rules for buying and selling of goods and conducting other financial transactions across state borders. Florida has officially thrown its CBDC wrench into that standardization, saying digital dollars aren’t money as defined in the code. But it doesn’t really ban CBDC use in interstate commerce, just puts those assets in another category than money, lawyers say.

“I could still buy a computer using CBDCs if that’s what they wanted me to pay in,” said Reyes, who said the government-backed assets would now fall into the bucket of “general intangibles” under the UCC. “The UCC doesn’t have the power to ban people from using any type of exchange. That’s not what it does.”

CBDC Opposition

DeSantis called the CBDC “a massive transfer of power from individual consumers to a central authority,” and he said the federal government would “have the ability to control where that money is going,” citing a future government’s ability to stop gun purchases or halt somebody from buying too much gasoline.

Though DeSantis and other Florida Republicans suggest the U.S. is definitely heading toward issuing a digital dollar, that view isn’t yet reflected by what’s happening. While the administration of President Joe Biden is under orders to develop the concept of a U.S. CBDC, no federal entity has yet declared support for issuing it.

The Federal Reserve would be in charge of the digital dollar, and officials including Chair Jerome Powell have said the central bank won’t act without backing from the White House and Congress. The Fed also doesn’t want to be in the retail CBDC business, so officials have declared that it won’t administer individual accounts and that people’s transactions would have to be managed by banks or in other outside digital wallets.

DeSantis acknowledged that if Congress eventually authorizes a U.S. CBDC, the state may have to back down. But more than that, Andrea Tosato, a legal scholar who has advised on UCC amendments and teaches at University of Pennsylvania’s Carey Law School, said that any federal law on this point will automatically override state law.

If that happens, though, it won’t have anything significant to override in Florida, he and Reyes suggested.

The UCC Reality

The UCC represents longstanding, battle-tested standards for basic transactions, and they‘re meant to be “super boring” and nonpolitical, Tosato said. The Florida effort to use it as a shield against digital dollars is “painting the UCC as something that it is not.”

The UCC gives both sides of transactions basic legal protections, Tosato explained, but it doesn’t tell them what they can or can’t exchange. That’s the job of regulations or criminal codes.

When one digs into “the rabbit hole and the craziness of what was done with this Florida bill,” Tosato said, “there is no light-bulb moment. It makes no sense.”

The governor’s office didn’t respond to a request for comment on these points. DeSantis suggested during his press conference that he wasn’t just protecting people’s financial privacy but was also seeking to defend crypto from federal government interference.

“I think they want to crowd out and eliminate other types of digital assets like cryptocurrency, because they can’t control that,” he said.

While Florida rewrites its single-state corner of the 50-state standards, though, it’s also rebuffing a set of amendments suggested last year that were meant to set standards for the interstate use of cryptocurrencies, including in such examples as the use of bitcoin as collateral in lending. That could have been a foundation for digital assets in commerce, Tosato argued, and other states have been moving forward to adopt the changes.

Even the way Florida defines a CBDC could be problematic. Its new law says a CBDC is a government-issued digital currency “that is made directly available to a consumer,” but Tosato contends that doesn’t reflect any of the current or planned CBDCs, which generally have service providers manage the accounts or wallets for using the virtual currency.

“There is no CBDC anywhere that is issued directly to consumers,” Tosato said.

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As DeSantis and his allies celebrate their CBDC ban, Tosato says they’ve compromised the UCC’s crypto modernization and are misrepresenting the meaning of their overhaul of Florida law.

“It’s done in a way that makes no sense and is completely broken,” he said.

Investors Track Pepecoin Whales to Cash #prizmabet In on Meme Coin Mania as Wider Market Stagnates

The trend has the potential to disrupt the huge rallies bitcoin and ether have seen this year.

After pepecoin (PEPE) took just weeks to go from zero to a nearly $2 billion valuation and produce almost-instant millionaires, envious crypto investors are prowling for the next get-rich-quick meme coin.

Anyone doing so is ignoring the fact that the shocking magnitude of PEPE’s controversial rise is rare. Digital assets that have very little – or no – fundamental value like dogecoin (DOGE) or Shiba Inu (SHIB) pop out of the ether every couple of years. But finding the next PEPE is next to impossible; every winner is surrounded by the ashes of many failures. (And, also, PEPE’s market cap has crashed to less than $650 million, according to CoinGecko.)

That doesn’t stop people from trying. For some, that means simply copying whatever early PEPE investors have put their money into next. On-chain data makes this easy. Wallets holding a large amount of tokens can be tracked on sites like DeBank.

Over the course of last weekend, several newly issued meme tokens surpassed PEPE in trading volume. This flurry of activity was down to whale watchers, people who buy assets based off what large wallets are doing.

One wallet that holds over $4 million worth of PEPE purchased a meme coin called HARAM – a token plagued with xenophobic imagery – at 22:22 UTC on Saturday. The market cap skyrocketed from $200,000 to $5 million in the next 4 hours, and 24-hour volume subsequently hit $20 million on Sunday.

This wasn’t the only example. Bizarrely named meme tokens like RIBBIT, BOB, JEFF and WEN all experienced massive spikes in volume over the weekend. Amid this rush into meme coins, overall volume on Uniswap’s decentralized exchange surged to $150 million an hour at numerous points on Saturday, way up from the typical $16 million to $30 million, according to Dune Analytics.

As attention switches to meme coins, other sectors like decentralized finance (DeFi) are beginning to suffer. The total value locked (TVL) on DeFi protocols has slumped from $53 billion to $47 billion in the past 30-days, and while some of this can be attributed to a crypto market correction, outflows from platforms like Agility LSD, which has seen $500 million in outflows, could demonstrate a waning of interest.

And then there’s the question of whether some meme coins have nefarious intentions. There are hundreds of new ones listed every day and a quick glance at DEXTool’s “live new pairs” section suggests an increasing trend of rug pulls, where token creators either dump their tokens on new investors or alter the code to make it so investors can’t sell.

While a select few investors might strike the jackpot and make substantial returns, the odds aren’t in their favor. Bigger picture, the meme coin trend has essentially created a black hole that sucks liquidity out of the market, creating a potential impediment for other cryptocurrencies like bitcoin (BTC) or ether (ETH).

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Edited by Nick Baker.

Bittrex Küresel CEO Says #prizmabet Firm Will Fight SEC Charges, Did Not Serve U.S. Customers

The Securities and Exchange Commission has accused Bermuda-regulated Bittrex Küresel of failing to register as a securities exchange in a lawsuit targeting U.S.-based Bittrex Inc.

The U.S. Securities and Exchange Commission (SEC) is “mistaken” in charging crypto exchange Bittrex Küresel GmbH with breach of local securities law, its Chief Executive Officer Oliver Linch said during a phone interview with CoinDesk on Monday.

On April 17, the SEC charged Bittrex Inc. and its former CEO William Shihara for operating an unregistered securities exchange, broker and clearing agency in the country. In the same complaint, the regulator accused Bittrex Küresel GmbH of failing to register as a securities exchange “in connection with its operation of a single shared order book” with U.S.’ Bittrex.

The regulator alleged both Bittrex and Bittrex Küresel should have registered as an exchange because they “brought together” securities orders of multiple buyers and sellers “using established, non-discretionary methods under which such orders interacted.”

“Bittrex also provides Bittrex Küresel with the technology to operate its trading platform, including a single matching engine and order book that Bittrex Küresel shares with Bittrex, both of which are maintained by Bittrex personnel in the United States,” the complaint said.

The complaint added that the “design and functionality of the Bittrex Platform is similar to those of properly registered national securities exchanges,” from its display and order book to order matching and trading rules.

“We’ve not really seen an explanation as to what the SEC’s thinking is there, why that is of significance,” Linch said referring to allegations of a shared order book. “Suffice to say we think that they’re mistaken in the way they conceive of it legally and in terms of facts.”

Bittrex Küresel didn’t know it was the subject of an SEC probe until it received notice that the agency had “reached a preliminary conclusion,” according to Linch. He added the regulator didn’t give the firm an opportunity to “explain the facts.”

‘Never’ served U.S. customers

Linch, who was appointed Bittrex Küresel CEO last year, said the firm “never purported to offer services,” in the U.S. and that it will “vigorously” defend its position that it does not have any customers in the country.

The SEC is facing questions from the industry after a string of recent enforcement actions and notices of scrutiny prompted a couple of firms, including Bittrex Inc., to shutter some or all operations in the country. The industry has criticized the SEC for choosing to regulate by enforcement instead of providing regulatory clarity to firms.

After filing suit against Bittrex, SEC Chair Gary Gensler said the agency’s action “makes plain that the crypto markets suffer from a lack of regulatory compliance, not a lack of regulatory clarity,” as the complaint alleged Bittrex’s former CEO Shihara worked with crypto issuers to remove wording that indicated the assets in question were securities.

While it was a “sad day” for Bittrex, its shuttering does not affect his firm’s operations globally, Linch said.

“Bittrex was an entirely separate meşru entity and only provided services in the U.S. and only served U.S. customers. And they’re the ones that have had to shut down their operations… Küresel continues on providing the services to rest-of-world clients as it ever has,” he said.

The SEC has said it believes Binance.US is operating an unregistered securities exchange. While its küresel counterpart Binance maintains the U.S. entity is separate and distinct, with the action against Bittrex Küresel, it’s unclear if the regulator will also take aim at other players in the industry.

Linch didn’t comment on specific firms but praised crypto regulatory regimes in other jurisdictions.

“What we’re seeing is a growing realization that the most successful regulatory regimes are ones that have created a framework for crypto on a bespoke basis,” Linch said. “Now, that’s why we’re regulated in Liechtenstein in Bermuda, because what those jurisdictions did really early on, is really get to grips with crypto, what the product is, what services, what the risks are, and say to people, ‘okay, well, we can identify and manage. Here’s how you do it safely.’”

Last week, SEC’s Gensler faced tough questions from U.S. lawmakers on his handling of the crypto sector, while the European Parliament voted through its landmark crypto licensing regime.

The Markets in Crypto Assets (MiCA) framework will apply to the European Union’s 27 member states as well as the three additional states – Liechtenstein, Norway and Iceland – that make up the European Economic Area. The regime sets out requirements for crypto service providers and issuers that must be implemented on a national level.

In addition to the EU, jurisdictions from Dubai to Hong Kong are looking to supervise crypto in a holistic way, Linch said, adding that his years of experience as a financial regulatory lawyer in the U.K. taught him that bad cases make for bad law.

“Ultimately, this is for Congress to sort. If it wants to set up a regulatory regime, set up a regulatory regime,” Linch said of the U.S.

The SEC declined to comment “beyond the public filings.”

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Edited by Parikshit Mishra.

Merhaba arkadaşlar, bugün sizlere Prizmabet isimli bir bahis sitesinden bahsedeceğim. Prizmabet, Betconstruct altyapısı ile üyelerine kaliteli hizmetler veren ve ülkemizin önde gelen bahis sitelerinden bir adedidir. 2009 yılında kurulan Prizmabet, lisanslı, muteber ve avantajlı bir site olarak dikkat çekmektedir. Prizmabet’te spor bahisleri, canlı bahisler, casino, canlı casino, slot oyunları, sanal sporlar ve daha pek çok seçenek bulabilirsiniz. Prizmabet’te oyun oynamak için aradığınız ortamı fazlası ile bulacaksınız.

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Prizmabet müşteri hizmetleri de üyelerine 7/24 canlı takviye hizmeti sağlamaktadır. Prizmabet canlı takviye grubu sayesinde site ile ilgili her türlü soru, sorun yahut teklifinizi iletebilir ve anında tahlil bulabilirsiniz. Prizmabet canlı takviye takımı profesyonel, güler yüzlü ve yardımseverdir.

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As Crypto Grows, so Does CoinDesk’s Commitment to Keeping Pace #prizmabet

A new CoinDesk tool called the Bitcoin Trend Indicator can help traders spot where BTC is headed.

Proximity to information and access to new tools is one of the things that I value most about being at CoinDesk. Each day there’s cutting-edge access to news and early looks at tools that we as a firm are looking to bring to the marketplace.

The new Bitcoin Trend Indicator (BTI) from CoinDesk Indices is useful for investors, specifically those looking to employ systematic, non-discretionary strategies. Successful and timely identification of trends in price movements is paramount to any active investing strategy – and that’s something BTI appears to deliver.

While this new tool might not be so useful for investors engaging in a long-term, buy-and-hold strategy, for those with a tactical bent – a penchant for entering and exiting positions quickly – it’s got significant value. It should work well in tandem with watching seasonality, which is particularly important following the crypto winter markets endured for much of 2022.

You’re reading Crypto Long & Short, our weekly newsletter featuring insights, news and analysis for the professional investor. Sign up here to get it in your inbox every Wednesday.

As a practitioner of technical analysis, I view visual identification as a tried-and-true method of identifying trends. You pull up a chart, observe the extent to which prices are moving and apply trend lines to provide a graphical outline of those trends. They can effectively be used to identify and project the direction of an asset’s price movement, with breaks below or extensions above being instances worth noting.

Candidly, a degree of subjectivity exists when drawing trendlines. Where I draw my trendline may be completely different from where a colleague draws one. Methodology can vary as well. Where one may connect trend lines at an asset’s closing price, another may draw the trendline at its high or low price for the day.

This is not meant to call into question the practice itself, but to highlight potential variations in the analysis of identical data. From my vantage point, it’s no less subjective in nature than picking one valuation multiple over another when performing fundamental analysis.

Historical price data can be used to identify seasonality and trends as well. Past pricing data can be separated into buckets related to time, and used to identify patterns.

Investors can also narrow the time period of evaluation to a more recent time frame to evaluate the extent to which performance may have shifted.

Of note in 2023 is the somewhat sporadic monthly returns, with underperformance in February and April, surrounded by outperformance in January and March. The lack of a discernible trend in instances like this highlights the need for objective, quantitative-based tools to evaluate trends. As crypto matures and the base of crypto investors widens, so, too, will the need for tools that strip the emotion out of allocation decisions. CoinDesk’s Bitcoin Trend Indicator can do that.

In a nutshell, the BTI identifies the “presence, direction and strength of momentum in the price of bitcoin.” It is calculated daily at 4 p.m. ET (20:00 UTC at this time of year), using prices from the CoinDesk Bitcoin Price Index (XBX), our BTC benchmark.

The five BTI signals, (color coded for clarity from red to green) are significant downtrend, downtrend, neutral, uptrend and significant uptrend.

A look into its methodology shows that a series of moving average crossovers are utilized within four distinct crossover windows of varying lengths. Exponential weighting is used to fully capture the importance of more recent prices.

A backtest of the BTI shows it identified an uptrend in October 2020, before BTC jumped to $40,000 from $10,000. From a risk management vantage point, it also identified movement to “neutral” from “uptrend” in May and November 2021, before substantial drawdowns.

A missed signal can be seen in late March 2022, when the BTI signaled an uptrend before a 59% drop through June. It’s also worth noting, however, that while the uptrend was identified on March 28, the BTI identified a neutral signal on April 8 and a downtrend signal on April 10.

There is no Holy Grail indicator, so I expect other false signals. I find comfort seeing that the BTI has demonstrated an ability to quickly adapt to a changing landscape however.

I would encourage all who are reading this to give the BTI a look, particularly those who are looking to build systematic, non-discretionary strategies.

Give it a try, poke holes in it, completely ignore any bias that I may have towards it and see how it fits into your own investment process. Feel free to let us know how you feel as well, whether positively or negatively. Feedback can be the lifeblood of improved processes.

Our goal at CoinDesk is to constantly provide products and services that add value to your own.

– Glenn C. Williams Jr., CMT

Takeaways

From CoinDesk Deputy Editor-in-Chief Nick Baker, here’s some news worth reading:

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To hear more analysis, click here for CoinDesk’s “Markets Daily Crypto Roundup” podcast.

Edited by Nick Baker.