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Dutch ETF Giant Makes Crypto Play Despite Regulator’s Disapproval

Dutch etf giant makes crypto play despite regulator’s disapproval

Dutch ETF Giant Makes Crypto Play Despite Regulator’s Disapproval


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Flow Traders NV, the largest European exchange-traded fund (ETF) trader has entered the crypto market, despite public warnings from the Dutch Authority for the Financial Markets (AFM) urging consumers to stay away from cryptocurrency trading.

Based in Amsterdam, the Dutch speed trader has its eyes on the first ever exchange-traded notes (ETN) based on bitcoin and ether. According to Swedish ETN issuer XBT Provider, the volume of its cryptocurrency notes being traded by Flow Traders has “dramatically increased” over the past few months.

In what could potentially be hugely significant for the future of institutional investment in crypto, Bloomberg reports that Flow Traders has become the first trading firm in the world to publicly acknowledge that it is actively trading crypto ETNs on regulated exchanges. This possibly serves as a vote of confidence in the future of the crypto market.

More notably, giving institutional investors the ability to trade crypto ETNs or funds in the cheap and straightforward manner of conventional fiat trades could positively affect the popularity of digital assets trading.

Speaking about the potential growth of the crypto market, Co-CEO, Flow Traders NV, Dennis Dijkstra told Bloomberg:

“People underestimate crypto. It’s big, and it is to be regulated very soon. The market participants are much more professional than people think. Institutional investors are interested — we know they are because we get requests.”

Loud Disapproval From AFM

Institutional investor

On its part, the Dutch Authority for the Financial Market has remained strongly opposed to crypto, releasing a statement where it described it as “prone to abuse” and “not an asset class.” Regulatory antipathy notwithstanding, there is no actual legal basis for the AFM to stop Flow Traders or any other firm from trading regulated crypto instruments on regulated exchanges, so for the time being the push by conventional investors into crypto remains unabated.

CCN reported in March that Coinbase was granted a UK E-Money License and a bank account with Barclays. A month later in April, it was also reported that Goldman Sachs is in the process of setting up a cryptocurrency trading desk. Driven by disappointing trading volumes in conventional markets and the dynamism of the crypto market, more institutional investors are staking a claim in the burgeoning crypto scene.

As with many other regulators around the world, AFM’s primary grouse with crypto centers around the perceived risk of aiding criminals and funding terrorism. International bodies like the G20 have called for a clearly defined set of global Anti-Money Laundering (AML) and Know Your Customer (KYC) standards to replace the current situation in which different regulators such as the United States’ SEC and Japan’s FSA use substantially different standards despite the easy cross-border movement of crypto.

Images from Shutterstock

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Published at Thu, 05 Jul 2018 20:49:20 +0000

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Cardano Blockchain's First Use Case: Proof of University Diplomas in Greece

cardano use case

Greek graduates may soon be able to prove their qualifications by way of a blockchain.

GRNET, the national research and education network of Greece, is working on a pilot project with blockchain research and development company IOHK to verify student diplomas on Cardano, a blockchain that launched in September.

The project is notable because it is the first official use case of Cardano, a proof-of-stake-based cryptocurrency and soon-to-be smart contract platform currently under development by IOHK.

The GRNET app will be built on Enterprise Cardano, a private or permissioned ledger version of Cardano. Unlike a public blockchain, where anyone can join in and participate, a private blockchain allows only a restricted set of users to validate block transactions.

So far, three Greek universities are participating in the project. While IOHK is providing the decentralized database, GRNET is providing the web front end and support and will bring together other universities participating beyond the pilot.

Funding for the project comes in part from Horizon 2020, a European program for research and innovation. Development of the prototype is already under way, Aggelos Kiayias, IOHK’s chief scientist, told bitcoin Magazine.    

Why Diplomas?

Given IOHK’s deep ties with academia, it is no surprise to find the company working on a project that involves universities. But why diplomas?

Putting diplomas on a blockchain takes the paperwork out of the process and makes it easy and simple to check if someone holds a degree.

Typically, when a student graduates, they receive a paper copy of a diploma signed by the dean and co-signed the university’s registrar. All of the students’ transcripts and records are stored in the university’s centralized database.

To confirm that a graduate has the degree they claim to have, an employer has to check the official diploma or call the university. The labor-intensive process makes it too easy for unqualified applicants to slip under the radar.

Putting documents and records on the blockchain eliminates opportunity for fraud in that it allows graduates and universities to “issue a proof that a qualification exists that is undeniable,” said Kiayias. “This is a point of reference that can be agreed [on] by everyone.”

Cryptographic Proof

But to protect student privacy, instead of putting an entire diploma on the blockchain, GRNET plans to put only a cryptographic hash of a diploma on the blockchain.

Digital documents are easy to alter in ways that are undetectable to the human eye. But as long as the digital version shown to an employer hashes to the same output as what is stored on the blockchain, that proves the document is the original, unaltered version.

“We cannot put any plaintext on the blockchain, as diplomas and transcripts are personal information. We only put hashes; we may put entire diplomas and transcripts, but they will always be encrypted,” Panos Louridas, GRNET consultant and associate professor at Athens University of Economics and Business, explained to bitcoin Magazine in an email.

This is not the first effort to store diplomas on the blockchain. In October, MIT announced its own pilot project to verify digital diplomas using the blockchain.   

But Louridas claims the GRNET pilot is different from prior projects in that it stores the entire chain of verification steps on the blockchain. Each step would be recorded as its own immutable transaction on a separate block in the blockchain.  

“You don’t really need a blockchain to store diplomas: a simple system with some digital signatures by the host institution would do,” he said. “We want to be able to record that somebody has asked for proof of a degree, that the proof has been granted, that the proof has been forwarded to a verifier, and that the verifier can verify that the degree is valid, and nobody can dispute any of the above steps.”

The three Greek universities taking part in the pilot include Aristotle University of Thessaloniki, Democritus University of Thrace and Athens University of Economics and Business.


The post Cardano Blockchain's First Use Case: Proof of University Diplomas in Greece appeared first on Bitcoin Magazine.

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