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A TON of Challenges: Resistance Is Nothing New to Pavel Durov

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2019 was one hell of a year for Pavel Durov.

The serial entrepreneur announced and made moves to release the Telegram Open Network, or TON — the blockchain associated with his Telegram messaging app. The idea of TON is to allow users to go beyond simply sending messages and emojis to each other, by using the app’s underlying infrastructure to transact a cryptocurrency called Gram in a completely trustless and secure manner.

But the United States Securities and Exchange Commission had other plans for the launch of Telegram’s new blockchain product, filing an emergency restraining order in October in an effort to halt the initial coin offering after it raised $1.7 billion in an unregistered sale.

“Our emergency action today is intended to prevent Telegram from flooding the U.S. markets with digital tokens that we allege were unlawfully sold,” said SEC Division of Enforcement co-director Stephanie Avakian at the time. “We allege that the defendants have failed to provide investors with information regarding Grams and Telegram’s business operations, financial condition, risk factors, and management that the securities laws require.”

But it would appear that this wasn’t enough for Telegram to properly hit the brakes on its ICO — the SEC managed to dig up evidence that token sales continued after that. Now, Telegram joins large entities like Facebook who want to make meaningful plays in crypto but are being held back at the shirttail by regulators and enforcers. Telegram boasts some 200 million users around the world, and the TON blockchain would give them a token-enabled economy to participate in online. But the U.S. government considers this illegal.

Durov gave a deposition in Dubai on the matter in early January, a full transcript of which is available online. While his project seems to be suffering at the hands of regulators and other powers that be, this embattled state is just a reflection and callback to his earlier career at VK, the Facebook-like social network that took Russia and Eastern Europe by storm.

Durov is no stranger to controversy, especially when it comes to his native Russian government. When the Kremlin wanted access to VK user data to identify protestors in 2014, that was enough for him to sell his remaining stake in the company and flee the country. Durov and his brother had already launched Telegram in mid-2013, so they simply began focusing on that.

Telegram attracted controversy before there was ever any mention of it having an associated blockchain for payments and transacting. The app depends on encryption and highly secure technologies in order to prevent third parties from monitoring or blocking conversations. As such, it became a choice app for ISIS fighters and propagandists. The addition of a blockchain system didn’t really do the company any favors in the eyes of regulators and other authorities.

Sources suggest that TON has been ready for launch for some time. Fresh off the heels of a presale in March 2018, Durov and his brother indicated their preparedness to launch that autumn, but it so far isn’t happening. The SEC’s injunction against Telegram only doubles down on that delay. Purchase agreements for the Gram token sale stipulated that if the network failed to launch by October, token investors would be eligible for a refund following a vote. It’s been a year marked by bureaucracy and hindered progress for Durov.

Yes, TON is operational in private testing mode and reportedly exhibiting “extremely high transaction speeds,” but this is not where the company expected to be by now. Durov and team had designs to be operating a robust blockchain for a couple hundred million users by now. Instead, they are eyeballs-deep in regulatory muck, trying to clean it up so that they can move forward as planned.

We’ll see if they can extricate themselves from a legal puzzle created by an SEC that seems increasingly motivated to make an example out of TON. If anything, the resistance is probably more galvanizing to Durov than anything else. If 2019 was the year that all TON’s problems came crashing down, perhaps 2020 is the year that the project actually sees launch and successful operation. Durov got his entrepreneurial start in Russia, and has significant experience handling business pressure and hardship at the hands of the government there. TON’s present-day difficulties just seem like a slightly different version of that same drama from the past.

Durov exhibits certain mindfulness practices — he meditates, doesn’t eat meat, and keeps a consistently cool demeanor in public. These days, his difficulties are with financial regulators instead of Russian government leaders, and while he’ll show up to every meeting required of him, he’ll probably do it with a cool head and a soft voice. This founder knows too well what it’s like to operate a company facing resistance, so we don’t expect to see him hanging up any hats just yet.

Pavel Durov is ranked #4 in the first-ever Cointelegraph Top 100 in crypto and blockchain.

Source: https://cointelegraph.com/news/a-ton-of-challenges-resistance-is-nothing-new-to-pavel-durov

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Countries Buckle Up as FATF’s Travel Rule Deadline Approaches

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The Financial Action Task Force (FATF) published its travel rule last June, in which it proposed a means through which cryptocurrency exchanges and other asset custodians could operate while also staying in compliance with existing Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations. 

In that time, several countries have taken different paths towards regulating the crypto space concerning information control and user identity. 

When the FATF proposed the travel rule, it explained in an accompanying press release that it would be giving its member countries a maximum of a year to ensure full compliance and get their native crypto industries in line. Now that the deadline seems to be up, several countries have done their bit to adopt progressive rules concerning the agency’s requests.

Compliance is Strong in the U.S.

In the United States, the Bank Secrecy Act forms the basis of AML regulations. Financial institutions have complied with the regulation for decades, but in 2013, the Financial Crimes Enforcement Network (FinCEN) demanded that cryptocurrency companies should be made to ensure full compliance as well. The agency also enacted its BSA travel rule for crypto companies last year, issuing its guidelines to digital asset service providers. 

Earlier this week, Steve Mnuchin, the Secretary of the United States Treasury, announced at a hearing with the Senate Committee on Financial Services that the FinCEN is also working on developing cryptocurrency laws. As he explained to the Committee, the agency has seen the rapid rise in crypto use, and while they recognize the fact that the technology is innovative, they would also work to ensure that these assets don’t end up being used like Swiss bank accounts. 

Uneven Compliance Across Europe

 The European Union is a bit of a different case. As an economic bloc, the Union has accepted that the cryptocurrency space needs to be effectively regulated, and it has adopted the FATF travel rule completely. Then, the stakes were even higher for crypto companies in the EU when the block adopted the Fifth Anti-Money Laundering Directive (AMLD5). 

The AMLD5 isn’t as stringent as the FATF’s travel rule, but it does put some significant responsibilities on crypto firms in the EU. The most significant of these responsibilities has been about customer record-keeping, a decision that has led to the mass exodus of cryptocurrency firms in the region.

Regardless, the AMLD5 came into full effect on January 10, and several crypto companies in the EU have still committed to fighting it. There’s also the issue of the United Kingdom, which left the EU earlier this year. While it complied with the regulations up until its exit, there hasn’t been any word on whether that will continue.

 Countries On the Way to Compliance 

Switzerland, which is seen by many as the most crypto-friendly nation, also recently made amendments to its Payment Services Act to comply with the FATF’s rules. Last week, the Swiss Financial Market Supervisory Authority reduced the threshold for unidentified crypto exchanges from 5,000 CHF ($5,000) to 1,000 CHF ($1,000). It’s expected that other components of the Act could also be amended likewise. 

Singapore is also working on falling in line. In December, the Monetary Authority of Singapore confirmed that it “intends to amend the PS Act to fully align with the most recent enhancements to the FATF Standards.”

Source: https://insidebitcoins.com/news/countries-buckle-up-as-fatfs-travel-rule-deadline-approaches/250706

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Ethereum Wallet MetaMask Crosses 1 Million Users Worldwide

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MetaMask, one of the most popular mobile apps running on the Ethereum network, has just clocked a significant milestone. 

According to a recent report from Trustnodes, the browser extension and cryptocurrency wallet application crossed the 1 million user threshold, in a time when transactions on the Ethereum network have also been on the significant rise. 

Company Shakes Off Scandals and Stabilizes 

MetaMask is a browser extension for the Google Chrome web browser that comes with a built-in crypto wallet and allows users to run decentralized applications (dApps) on the Ethereum blockchain without the need to operate a full node on the network. The app has been extremely popular among Ethereum-based dApps, with many pointing to its innovative nature and ease of interaction with the blockchain. 

Crossing the million-user milestone is undoubtedly a testament to the app’s growing popularity, and as Trustnodes explained, it’s also coming at a time when just about everything related to Ethereum seems to be experiencing a surge as well. Last month, it was reported that the Ether tokes locked in decentralized finance (DeFi) had reached an all-time high, and in the past week, the price of the Ether token itself gained about 28 percent. 

However, MetaMask hasn’t always had a smooth ride. Last month, the app extension was removed from the Google Play Store, after the tech conglomerate accused the app of being in violation of its financial services policies. 

According to MetaMask co-lead developer Dan Findlay, Google had explained that the firm violated a policy that prohibits cryptocurrency mining on mobile devices. The team tried to appeal the decision to ban the app, but all their arguments fell on deaf ears as Google rejected their appeal.  

“I very much hope that this was an honest mistake on the part of Google’s reviewers, but in combination with all the crypto YouTube bans, it definitely puts me at disease about how Google is engaging with decentralizing technologies,” Findlay said at the time to Cointelegraph.

 The ban was eventually lifted earlier this year, as the MetaMask team opined in a tweet that Google had simply mistaken the purpose of their app. The team has now turned their attention to Snaps- a new feature that will allow users to build plug-ins that can improve the app’s functionality. They plan to have a demo ready at the ETHDenver hackathon this weekend. 

Consensys Isn’t so Lucky 

Sadly, not every Ethereum affiliate has been able to coast on the type of success that MetaMask has gotten. Earlier this month, ConsenSys, one of the most prominent development studios on the Ethereum network and the parent firm of MetaMask itself, announced that it had cut its employee count by 14 percent. 

The New York-based software development giant explained in a February 4 press release that it had undergone a massive layoff, adding that it also intends to split. As the release explained, part of its operations will continue in the software development sector, while the other part will be more focused on investments. It’s worth noting that the firm just went through a round of job cuts that saw its staff reduce by 13 percent in January.

Source: https://insidebitcoins.com/news/ethereum-wallet-metamask-crosses-1-million-users-worldwide/250697

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