Apple is recruiting to explore alternative payments
A recent job posting piqued curiosity about Apple’s position on digital currencies. The new role “Business Development Manager – Alternative Payments” goes beyond Apple’s current payment area and examines “how this is alternatively possible”.
The role includes leading alternative payment partnerships and specifically calls for:
More than 5 years of experience working in or with alternative payment providers such as digital wallets, BNPL, Fast Payments, cryptocurrency, etc.
In-depth knowledge of the alternative payments ecosystem, understanding the complexities of cash flow, roles / responsibilities for settlement, relevant regulations and industry standards, and the wide range of FinTech products.
While Apple has not made any public statements about a possible expansion into digital currencies, there is much speculation about what this could mean for the industry. Forbes reports that Apple’s support for digital currencies “could give the market its strongest support yet”.
If Apple embraces digital currencies, Coindesk suggests that it could expand the scope of payments accepted in the Apple App Store, which previously “forced apps to use Apple’s trading channels and play by Apple’s rules.”
The idea of partnership agreements to facilitate payments in digital currency also suggests that Apple may not reinvent the wheel and quickly roll out a solution with existing infrastructure. Hopefully this will be the first of many Apple settings in this area.
DCEs call for regulation after competitors become ghostly
Last month there was intense discussion about the social and ecological footprint of digital currencies. But as the balance sheet for DCE’s ghost mode starts to rise, this month’s hot topic becomes the under-regulation of DCEs (Digital Currency Exchanges). As it turns out, the growing concerns don’t stay with those watching from the fence lines. “Inadequate regulation and slow policymakers” are issues that concern market participants in the crypto space alike.
The respected Sydney Morning Herald, recently interviewed partner at Piper Alderman – Michael Bacina, and the executive director of a leading exchange, Independent Reserve – Adrian Przelozny, on the matter.
Przelozny told reporters about his concerns about the randomness of regulation and what it means for companies intending to get a legitimate business:
There are no uniform rules that stock exchanges have to follow, he says. They basically rely on people to do the right thing just because they want to do the right thing.
Big exchanges like Independent Reserve, which hold approximately $ 1 billion in assets for over 200,000 clients, are doing the right thing. But it goes without saying that diligence shouldn’t be the only driving force in promoting industry best practices.
The reality is that consumers can have a hard time telling the difference between exchanges that adhere to best practices and those that don’t. This behavior sucks everyone in the industry, like the Independent Reserve, who are extremely careful with other people’s assets.
A recent example is ACX, the Australia-based digital wallet that has dramatically stopped responding to users’ withdrawal requests and the price of tokens on its website with around A $ 10 million in client assets not yet tracked and no action from any regulatory authorities vis-à-vis the company. MyCryptoWallet has faced a similar situation where reports of customer withdrawals were blocked after the exchange reported undefined “issues” that appear to remain unsolved.
Bacina was quoted by the SMH as saying:
Digital exchanges are rightly concerned about the scams and myths that continue about criminals’ use of digital currencies, he says. There is a real concern that there is going to be a major hack or significant fraud that may interfere with an exchange that does not conform to best practices, and knee-jerk regulation could be imposed in response.
As Caitlin Long put it very aptly in an online article recently, the government must be careful that regulation does not stifle innovation.
Blockchain Australia operates a certification process and signs its code of conduct. Certifying additional members after Version 2.0 of the Code of Conduct is released would help improve industry standards and best practices. However, there is no denying that regulators’ development of better overarching standards could help raise the bar for customer experiences in the digital asset space.
Cryptocurrency education still critical
Although Bitcoin was created in 2009 and the most recent anniversary of the first Bitcoin retail transaction, which happened on May 22, 2010, when Laszlo Hanyecz bought 2 pizzas for 10,000 BTC, it continues to be claimed that cryptocurrencies are still only for criminals
In a recent Senate estimate hearing, Nicole Rose, CEO of AUSTRAC, was asked narrowly focused questions regarding the use of DCEs by ransomware groups. Such a review of the use of digital currency exchange facilities for ransomware suggests that there is still a significant need for training.
A recent Chainalysis Crypto Crime report found that there are 270 wallet addresses associated with 55% of all money laundering.
Chainanalysis Australia Country Manager Todd Lenfield found at a recent event that only 11% of these addresses are related to Australian digital currency exchanges and 0.34% of digital currency transactions are related to illegal activity … we have a dramatic decline this year recorded.
Due to the traceability of cryptocurrencies, using cryptocurrencies to pay for ransomware is illogical. As the senator pointed out, there has been “research showing that in 2020 only 199 deposit addresses will receive 80 percent of all funds sent by ransomware addresses”. We believe that Australian AUSTRAC-registered cryptocurrency exchanges should have processes in their transaction monitoring process (part of their anti-money laundering and terrorist financing program) to monitor transactions against blacklisted wallet addresses (such as those used for ransomware) .
It was also recently announced in the Senate Appraisal Committee that AUSTRAC may be audited by the Australian National Audit Office (ANAO), which will assess the effectiveness of AUSTRAC regulation of DCE providers.
When the audit is carried out, it is checked how AUSTRAC:
communicates the new registration and reporting requirements to DCE providers;
manages a digital currency register;
assesses and addresses risks to registration and compliance; and
uses reported information.
The audit will also determine whether AUSTRAC has developed an assessment framework to assess the effectiveness of the regulatory system in achieving the political goal of crime prevention and detection.
After such an audit, you can assume that the way in which AUSTRAC communicates with the industry can change.