A pilot scheme delivered by Digital Catapult in partnership with AF Blakemore & Son, the family-run owner of Spar supermarkets, explored how using a shared digital infrastructure system could establish more intelligent vehicle slot filling, routing, and tracking.

UK freight accounts for 31% of all UK transport CO2 emissions, and statistics from the Department for Transport show that 30% of trucks on UK roads are running with empty loads.

The sector is under pressure to decarbonise without compromising on efficiency, and the pilot project set out to prove that technology could be harnessed to help achieve this.

The project, Logistics Living Lab, was trialled in a real-world environment, and combined distributed ledger technology (DLT), the internet of things and an algorithm developed by project partner Fuuse, to optimise route planning and truck use.

Digital Catapult claimed that it was able to match vehicle transport capacity with shipment needs across multiple UK organisations, which saw a 37% decrease in overall transport costs and a 9% improvement in vehicle fill rate for AF Blakemore & Son.

Scaling of the solution would allow competing logistics providers to safely share information on available truck space across their collective fleets, without the need for a single party to have full control or visibility of the entire system, he non-profit, UK innovation agency claimed,

It added that that UK logistics play a critical role in driving economic growth, contributing £163 billion to the economy, and serving as a vital link between the UK and the global market.

Tim Lawrence, director of the Digital Supply Chain Hub at Digital Catapult said: “The solutions built through this collaboration deliver a triple benefit to the UK logistics sector by empowering the organisations that make up our complex supply chains, to become more efficient, reduce costs to improve their bottom line and make a lasting environmental difference.”

The project’s finding have been published in a report, accessible through the Digital Supply Chain Hub.

Digital Catapult and its partners plan to scale the project to further decarbonise the UK logistics sector.

The agency also launched two further supply chain accelerators designed to fund tracking and sustainability efforts in September this year.

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Network security company Cato Networks Cyber Threat Research Lab has unmasked a new tool in the cybercriminal underworld capable of beating two-factor authentication (2FA).

The post Deepfake cybercrime tool threatens crypto exchanges appeared first on TechInformed.

The Italian carmaker explained in a statement that this move will better address the “evolving needs of its clients.”

Ferrari has said that it will begin accepting crypto transactions in other countries where crypto is currently legal tender by the end of 2024, after launching in the US last year.

“Ferrari is leveraging the expertise of various companies active in the cryptocurrency payment sector to ensure transaction security,” the Italian carmaker said in its statement.

“These solutions will facilitate dealers in accepting payments without the need to manage cryptocurrencies directly, as these will be converted immediately into traditional currency.”

In the US, Ferrari uses the crypto payment platform ‘Bitpay’, which performs this conversion.

Ferrari said that this approach allows it to verify the source of funds and protect transactions from price fluctuations related to exchange rates.

The high energy usage of cryptocurrencies has deterred other car manufacturers, such as Tesla, from accepting them as a form of payment – although it now accepts the cryptocurrency ‘Dogecoin’ for merchandise purchases.

In 2021, Tesla began accepting Bitcoin before its CEO, Elon Musk, halted it citing “environmental concerns.”

When Ferrari first accepted crypto payments in the US last year, its chief marketing and commercial officer, Enrico Galliera, told Reuters that cryptocurrency providers have made efforts to reduce their carbon footprint.

“Our target to reach for carbon neutrality by 2030 along our whole value chain is absolutely confirmed,” he said in an interview.

Galliera added that the decision came in acknowledgement that many of its clients have invested in crypto.

“Some are young investors who have built their fortunes around cryptocurrencies,” he said. “Others are more traditional investors who want to diversify their portfolios.”

The post Ferrari to accept crypto payments in Europe appeared first on TechInformed.

The amount is double that of the first half of 2023 when $657 million was stolen in crypto.

As in 2023, the first half of this year was dominated by a small number of costly attacks, with the top five hacks and exploits accounting for 70% of the total amount stolen.

In May, Japanese cryptocurrency DMM Bitcoin suffered the largest attack of 2024, resulting in the theft of over 4,500 BTC, which was valued at over $300 million at the time.

While the cause of this attack is unknown, like many victims in the last six months, it is speculated that a stolen private key or address poisoning may be the cause.

Hacks and exploits in 2024 are a third below the same period in the record year of 2022.

TRM Labs said in its report: “Crypto projects can protect themselves from hacks and exploits by implementing a multi-layered defence strategy, such as regular security audits, robust encryption, multi-signature wallets, and secure coding practices.”

The firm advised crypto wallet owners to stay up to date on the latest threats, educate employees, and have a comprehensive incident response strategy.

Read more: Navigating the line between crypto surveillance and privacy protection

The post Crypto hackers have already stolen almost $1.4 billion this year appeared first on TechInformed.

Reasons to invest and use the digital currency are varied, some believe its value will stay with inflation, others appreciate the minimal extra cost when transferring money abroad. The fact that it’s decentralised also offers privacy, control, and security compared to fiat money.

While fiat (cash) transactions are shared with the bank, which is often backed by a recognised government entity, cryptocurrencies are less traceable and not as easily accessed by third parties.

The reason for this is to secure an individual’s transactions and ensure autonomy over their finances.

Businesses using these services benefit by keeping their transactions confidential, shielding the details from competitors, and assuring consumers that their transactions are protected from any leaks or breaches.

As Peter Wood, chief technical officer at Web3 recruitment agency, Spectrum Search explains: “Privacy in cryptocurrencies is fundamentally about protecting individual autonomy and security a private sphere of economic activity from unwarranted observation and interference.”

Wood believes that the privacy crypto offers is crucial – not just for personal privacy but also as a defense against potential governmental overreach and financial surveillance, particularly in regions where personal assets are at risk from arbitrary governmental actions.

This may be a reason cybercurrencies remain banned in countries including China, Qatar, and Saudi Arabia. Russia is making efforts to ban cryptocurrencies, too.

Controversially, the US Department of Justice (DOJ) recently arrested and charged two founders of Bitcoin privacy wallet Samouri Wallet with conspiracy to money laundering and conspiracy to operate an unlicensed money service business.

Private wallets hold cryptocurrencies and are solely accessible to those who have the digital ‘key.’

Here, presents the issue. While Samouri Wallet aimed to keep its users completely anonymous in the name of financial privacy, the US DOJ claimed its level of concealment allowed unlawful activity to run on its platform.

The arrest went down negatively with crypto enthusiasts, with the argument that the government is forbidding the right to privacy.

At the time, high profile whistleblower Edward Snowden chimed in by posting on X: “The Department of “Justice” has once again criminalised the developers of an app that restores financial privacy.

“The way to fix this [is] to make money private by default. Privacy must never be ‘exceptional,’ or they will make it criminal.”

Fintech-loving criminals

We see cryptocurrencies mentioned regularly in relation to unlawful transactions. Ransomware gangs, for instance, will almost certainly demand funds to be transferred via cryptocurrency to avoid traceability, and those trading illicit goods and services will predominantly use it for money laundering purposes, too.

According to Chainalysis, an estimated $24.4 billion was received by illicit addresses in 2023.

“Cryptocurrencies certainly make it easier for cybercriminals to receive their cyber attack ransoms and are able to launder the ransoms with less chance of being monitored and caught along the way,” says Chris Hauk, consumer privacy advocate at Pixel Privacy.

Using cryptocurrency to move money allows criminals to bypass sanctions put in place through traditional financial systems like banks and makes the transaction much more difficult for the police to track.

Ransomware gangs, for instance, will often ask for money to be transferred via Bitcoin, and although this is known to be easily visible now, it can be moved instantly to a few private wallets without little approval.

There are efforts to tackle this by governments. Most major exchanges within cryptocurrency require proof of identity now, thanks to “Know-Your-Customer” measures the US’s Internal Revenue Service (IRS) and the EU are introducing.

This has helped enforcement step up on bad actors using the cyber currency, including a child exploitation ring, seizing a good portion of $4.5 billion in Bitcoin stolen in 2016.

But, Paul Bischoff, consumer privacy advocate at cyber security firm Comparitech states that it will be impossible to completely criminalise cryptocurrencies since they are decentralised, often open source, and easy to create for those with the skills.

Plus, it only tackles criminals within their countries. It remains difficult for government agencies to disrupt those outside.

Maintaining privacy

For context, while criminal activity runs through crypto platforms, it only made up 0.34% of crypto transactions last year according to Chainanalysis.

Surveys reveal that over a third of users use private wallets, and a tenth hold theirs offline in a hardware wallet, proving privacy is something normal users still care for.

“While it’s tough to track cryptocurrency payments, the government could introduce legislation to monitor and manage cryptocurrencies,” says Hauk.

However, the balance between maintaining privacy for the normal citizen, and monitoring cybercrime and fraud is a tricky one to get right, according to Wood.

“These regulations necessitate a delicate balance for providers, as they must align their operations with privacy assurances while adhering to regulatory frameworks designed to prevent illicit financial activities,” he says.

Wood calls for innovative solutions that reconcile privacy with transparency, pushing the boundaries of what can be achieved within the confines of the law.

Hauk adds: “My only concern about the government getting involved is that they’ll likely find ways to use any new laws to monitor the average citizen, who may simply be dipping their toe into the cryptocurrency pool.”

“The history of any cyber-related legislation we’ve seen in the past 30 years has simply led to increased surveillance on the average citizen,” he adds.

However, he also points out that money moving around in crypto won’t get very far in the real world: “Eventually, cryptocurrency must be converted to fiat currency, which are the transactions we should be monitoring most closely.”

Ben Stickland, member at cyber security firm CovertSwarm adds that at least  many UK banks now have policies in place that prevent the purchase of cryptocurrencies or have higher levels of security before allowing those transactions to take place.

According to Wood, there are still many cyber-enabled crimes which rely on traditional methods such as moving money via gift cards and stolen banking information.

“It is critical to understand that these technologies themselves are not inherently geared towards facilitating criminal activities any more than traditional financial systems,” says Wood.

“This requires a collaborative effort among all stakeholders in the cryptocurrency ecosystem to develop balanced solutions that safeguard privacy while preventing abuse,” he concludes.

The post Navigating the line between crypto surveillance and privacy protection appeared first on TechInformed.

Panama-based Towerbank is a fifty-four-year-old family-run institution serving a largely Latin American customer base in a region that is experiencing a higher than average inflation rate.

It’s a conservative organisation, according to Gabriel Campa – the commercial bank’s head of digital assets – and one that prides itself in being free of money laundering scandals.

Nonetheless, Towerbank’s president and CEO recognised that the bank needed to reboot its business model: all banks were offering the same products and services, and it was getting harder to compete with bigger players.

During an analysis of customer activity was carried out as part of the bank’s next ten-year plan, Campa noticed that more were buying cryptocurrency on their credit cards.

“Initially this was a risk for us, because we had no idea where the money was coming from,” he recalls. “We want to serve our customers – but we needed transparency.”

So, Tower started asking its clients what they were doing with the crypto and how the bank could help. It transpired that most uses were similar to regular bank services. Customers were using crypto to buy, to sell, for custody (secure storage), loans and overdrafts – ”All the normal standard banking products, but in the crypto space,” Campa observes.

While this might not seem like a radical use of crypto, in Latin American markets where inflation is still high (Venezuela’s inflation rate hit nearly 190% last year; Argentina’s hit 287% this March), people are turning to cryptocurrencies to protect their economic security.

To investigate further how the bank could help its customers who were buying crypto, Campa invited forty of them into the bank to find out more about what their clients needed.

The vision

Following its initial research, Tower kept the proposal simple to begin with, but broadly crypto friendly. If customers were transparent about their uses of crypto and its origins, it was willing to accept fiat currency that had initially come from crypto, so long as the crypto wallet it came from could be verified by [blockchain data platform] Chainanalysis.

At this point, the bank also got the regulators involved as well as other banks and informed them of its intentions to work with crypto. For Campa, this was about building trust.

“They know we are going to do things right. We are going to report what we find. That trust has allowed us to work behind the scenes without making much noise,” he says.

The next step was to enable crypto-to-fiat transfers. Campa says that one of the first transfers Towerbank received in crypto was from a client who had funds in the ill-fated cryptocurrency exchange FTX – just at the point where it was collapsing.

“He had to make payments in Panama. He called us and said, ‘I have $10K I need to make payments I have no way of sending my money’. We had the basic model in place by this point. So, we’d receive $10K in fiat currency and we’d ask them to show us the crypto wallet where that $10K came from. Which was verified by Chainanalysis.

“We gave him a deposit address he sent us his money in crypto we exchanged it into fiat in four hours,” Campa recalls.

While it was possible to handle this new service for 40 or so clients, it was still a time-consuming process. To scale, the bank needed to create an app-controlled crypto wallet that operates as a bank account, and to automate as much of this process as possible.

Campa’s vision was for this app to do all the things a bank offers – ACH transfer, SWIFT payments etc, but one which also handle clients’ crypto so that they can buy and sell in one place.

“The only policy we’ve established in the bank is that we don’t buy or sell or take custody of crypto,” Campa adds. “ We are not an exchange, and we don’t believe that banks should have crypto on the books. That’s too risky.”

To separate digital from fiat the bank set up its own trust to handle its clients’ crypto.  Campa explains: “That way if something were to happen to the bank the crypto is safe. Or let’s say crypto goes to zero – it’s the client’s crypto. We don’t put our any of our customers’ funds at risk.”

The bank plans to make its money on conversion fees rather than charging for the bank account. In terms of the type of crypto, Tower will accept Bitcoin, ether (ETH) and US dollar backed stablecoins Tether (USDT)and USD Coin (USDC). The plan is to allow more over time, Campa adds.

The tech

To achieve Campa’s vision of offering a hybrid banking service “that acts as the bridge between the fiat and the crypto ecosystem” Towerbank needed to build a scalable and flexible model. And one that was capable of handling two entirely different worlds – the crypto users who view traditional banks as “way too complicated” (in Campa’s words) and the traditional banking community.

Initially, Tower started building a model in AWS Cloud, but soon realised it needed a more robust solution. After attending Amazon’s re:Invent conference in Las Vegas, he was introduced to low-code no-code platform Appian.

Campa explains that this platform has enabled the bank to automate many of the process (96% in total, he claims) that were taking its team hours to do manually.

“Appian runs our entire onboarding process. It opens a bank account and a crypto account at the same time all in one shop. Before it would take our team around seven hours per client: one hour with the client and then six in the background doing paperwork. Now it’s 10 minutes with the client,  and an hour and a half of paperwork. We are feeling the impact immediately,” he says.

Appian also handles the crypto backend – as well as the transfers and execution of ACH and SWIFT, debit card processing and due diligence and compliance.

Campa adds that another advantage of using the process management system, is its ability to connect the bank’s other partners via APIs, which include its cloud banking platform provider Mambu;  payment gateway provider, Frame Banking and verification tool Chainanalysis.

In the background the Appian system also collates data and sends it to the bank’s data lake to enable deeper analytics in the future, to create more products and services to support these clients.

Another key tech provider was the crypto wallet, ikigii, which claims to be the only crypto wallet that is also a US dollar bank account.

Campa enthuses: “There’s nothing like it. It’s the only wallet where you can put both currencies into one place to allow payments for conversion to send and received; for P2P; custody and digital finance space loan and overdraft. International wires and payments.”

The results

According to Campa, the bank has already managed to on board around 700 clients with this system – and that’s before the app‘s official launch, which is scheduled for next month.

He estimates that the bank handled about US$30m in transactions from crypto clients last year: “We might have US$2m to US$3m in deposits. We have around 2,000 new clients with around 200 to 300 of these constantly transferring fiat to crypto, crypto to fiat.”

Campa maintains that if clients send over their crypto today, they will receive the cash in their accounts “within 50 seconds”. The bank is forecasting 2x growth this year and is hoping to enhance its hybrid platform with blockchain and generative AI technology, launching new products that include asset tokenisation and e-commerce with crypto.

While there are other means of converting crypto, Campa concludes that, even in the decentralised world of crypto and blockchain, banks can have a key role in acting as a trusted intermediary. This is especially true, he adds, in territories where crypto scams are so common that many banks won’t touch the currencies – leading to a great vulnerability among users and investors and a rise in Peer-to-Peer (P2P) crypto scams.

“There are lots of P2P scams that involve the seller accepting crypto and then ringing up the buyer’s bank and trying to get the money back. With a transparent relationship at the bank, a relationship with the regulators and corresponding banks, Tower can verify transactions and push back against refunds knowing that it was a legitimate transaction.

“We’ve got to this point because our clients trust us and are willing to tell us they are using crypto,” says Campa.

The post Towerbank builds hybrid crypto-fiat platform for LatAm clients appeared first on TechInformed.

Over the last year, words like ‘Web 3’, ‘blockchain’, and ‘NFT’ have all slipped off the radar — party due to the boom in AI excitement — but mainly because it took a reputational hit following fraudulent marketplace charges and a series of loss making initiatives.

Recent headlines have seen reports claiming footballer Cristiano Ronaldo had been hit with a billion-dollar lawsuit after launching his NFT collection; the internet laughing as singer Justin Bieber’s ‘Bored Ape’ NFT plunged from $1.3 million to just $70,000; X removing support for NFT profile pictures just at the beginning of this year; and gaming firm GameStop announcing it is to close down its NFT marketplace next month.

Nonetheless, some brands are still trying to keep their digital tokens in the spotlight, like luxury watch brand IWC Schaffhausen.

In collaboration with Arianee, a Web 3 platform, IWC launched its NFT range in 2022. The range comes with a metaverse-style membership called IWC Diamond Hand Club, offering access to exclusive online and in-person events.

Looking back, its chief digital transformation officer, Katharina Doepke-Schelling, wanted to clarify that they didn’t launch it to join the hype at the time.

“So, I’m taking us back to 2021. It was right in the middle of the pandemic; it was winter, our boutiques were closed, our events were about to be cancelled, but we were also about to launch a collection,” explained Doepke-Schelling.

“We were brainstorming about how to get this experience towards the customer when they might be staying at home. That’s when we started partnering up and brainstorming how to use that new technology to support our strategic goals,” she said.

According to Doepke-Schelling, the watchmaker didn’t just want to jump on the hype train: “We didn’t want to just launch an NFT for the sake of launching an NFT. Rather, we wanted to emphasise our brand.”

Arianee’s co-founder, Pierre-Nicolas Hurstel, explains that when a customer purchases a watch, they will acquire a new blockchain-based wallet in their account.

“Inside this wallet is a digital passport, which an NFT is dropped into for each purchase. Super seamless, easy to use, no questions asked, not one more click,” he said.

Previous customers can also join the community and claim their NFTs by using their existing products or attending in-person events. After launching the NFTs, IWC invited customers to a small private concert with composer Hans Zimmer.

“We had two students that found us on an NFT forum join us there, and they were sitting next to the marketing manager helping to build this programme. He could give them all of the insights, and we recently got a message from one of the students who just graduated telling us his first watch was [an IWC] watch,” added Doepke-Schelling.

She explained how this example showcases the type of community IWC wants for the brand to build a loyal fanbase, “We don’t just use it to build loyalty within the customers we have, but also as an acquisition of the actual insignia.”

NFTs in 2024

In defence of NFTs, Hurstel highlighted the faults in how the Web 3 tool was previously viewed.

“The hype was all about a new kind of fully digital product that people get, that allows them to make more money in the future maybe,” he explains. “A lot of it was trying to make a little more money than the next guy.”

“When you look at what IWC has now as a marketing capability, it is the capability to distribute data.” Brands have a tokenisation engine built inside customers’ information systems with NFTs, says Hurstel.

Within that, brands have immediate access to dynamic data owned by the user.

“Normally what you do is collect emails, you collect birthdays, and you end up with this already immediately obsolete data that’s hard to protect and update,” he adds. “All of a sudden, when you change that towards data distribution capabilities, you’re able to put data in the hands of your users and let them use this data in a dynamic way.”

The co-founder enthuses that with this, brands can get to know their customers “like never before.”

“That has nothing to do with hype; that has to do with regaining control over the brand’s digital presence and relations while giving it back to them at the same time.”

The post Is it time again for NFTs? appeared first on TechInformed.

The study analysed over 300 organisations from various sectors that accept cryptocurrency payments, finding that 60 companies in retail have adopted crypto, including H&M, Adidas, Yankee Candle, and popular online marketplace Etsy.

The food and dining industry secured second place, with 54 companies allowing crypto transactions. Players like Hard Rock Cafe, Domino’s, Chipotle, and Chuck E Cheese have all hopped on the digital currency bandwagon, the study found.

Burger King’s operations in Venezuela began accepting Bitcoin payments as early as 2020. Delivery services such as DoorDash and Uber Eats are also integrating this technology.

The Luxury retail sector rounded out the top three with 35 companies, including high-end fashion brands like Gucci and Ralph Lauren. Luxury watch retailer Hublot and jewellers like CRM Jewelers and Jewelry Affairs are also part of this cryptocurrency shift.

Need more context? As FTX founder is convicted, can regulation revive crypto’s reputation?

Travel and hospitality, and internet and online services, make up the top 5. Norwegian Air, Vueling and a spate of jet hire services like LunaJets represent the former category, while the likes of Google Play, Spotify and VPN providers such as ExpressVPN and FrootVPN are among the 28 companies making up the latter.

David Kemmerer, co-Founder and CEO of CoinLedger, spoke to the significance of these findings. “The increasing number of companies accepting cryptocurrency payments underscores the rise of digital currencies in the mainstream economy,” he said.

“This not only resonates with the advancing preferences of tech-driven customers but also offers benefits like decreased transaction charges and enhanced security. The cross-sector uptake of cryptocurrencies underscores their versatility and reflects just how important blockchain technology has become.”

He predicts that the increasing trends will lead to greater acceptance of cryptocurrencies and a more decentralised financial landscape.

For more TI reporting on Blockchain developments, click here.

The post The top five industries leading the cryptocurrency transition appeared first on TechInformed.

The 31-year-old crypto billionaire now faces decades in prison following his arrest last year after his exchange, FTX, went bankrupt. He had pleaded not guilty to all seven charges.

Bankman-Fried’s stunning fall from grace coincided with a difficult 2022 for the crypto sector. Stablecoin Terra – touted as one of the most reliable digital currencies – dropped 96% in value in a single day.

Bitcoin – possibly the best known of all cryptocurrencies — lost over 60% of its value last year. It was the second worst year in the digital currency’s history (it fell 73% in 2018).

But the biggest negative news story for crypto was FTX — which was promoted by prominent stars such as supermodel Gisele Bundchen, comedian Larry David and NFL star Tom Brady, lending an ‘acceptable’ face to what is still considered by many to be a risky investment.

‘Wild West’

Michael Lewis — author of books such as Moneyball and The Big Short, both of which later went on to be adapted into Oscar — nominated films, has recently written a book on Bankman-Fried. Speaking to The News Agents podcast, he said “Cryptoland is the Wild West” and speculated that other exchanges are also structured like FTX, but are out of the reach of US prosecutors.

The challenges of 2022 led to an increase in calls to introduce regulations — or even specific regulators — for cryptocurrency and digital assets, but what will that look like, and can it work?

“Unfortunately, scandals in this space, and lack of clarity on regulation, have resulted in crypto almost becoming a dirty word in the financial services world,” explains Sasha Skoryk, head of banking at Clear Junction.

“The word ‘crypto’ is used in such a generic way without really understanding all the components of digital assets and blockchain technology.

“What is a blocker to this mass adoption of digital ledger technology is the fact that some of these crypto assets are so volatile and the price can change very rapidly. That makes it risky and not something that can be easily adopted by businesses as an example. But there are so many elements of crypto that have the ability to transform the way we make payments.”

Effective regulation can “provide the foundational trust that both institutions and individual investors need to confidently enter or re-enter a market,” adds Spectrum Search founder and CTO Peter Wood.

“The crypto space is nascent and therefore highly susceptible to volatility, misinformation, and fraudulent activities. Introducing a dedicated regulator, can indeed act as a stabilising force by setting clear standards, enforcing compliance, and ensuring consumer protection.

“Such oversight not only adds credibility but also streamlines processes, making it easier for new entrants to adopt and innovate. On the flip side, the challenge is to strike the right balance.”

However, he warns that there’s a fine balance to be struck.

“Overly restrictive regulations can stifle innovation and push potential investors and tech leaders away, which is counterproductive to restoring the reputation of the crypto world.”

VARA

For the United Arab Emirates, cryptocurrency and digital assets are seen as a huge opportunity. In fact, at the recent GITEX conference in Dubai, one senior from the local government told TechInformed that the aim is to make the Emirate the “Switzerland of Cryptocurrency” by acting as a neutral and welcoming home for digital asset firms.

To achieve this, Dubai became the first region to launch its own independent regulator for virtual assets — after several years of development, Virtual Assets Regulatory Authority (VARA) went live in March 2022.

VARA’s mission statement includes the aim to make Dubai a “regional and international hub for virtual assets and related services” but also to “promote a shared responsibility in developing efficient and bespoke regulations for the protection of customers and to curb illegal practices in coordination with the concerned entities.”

TechInformed asks VARA vice chairperson Deepa Raja Carbon to outline why Dubai opted to create a sector-specific regulator for virtual assets.

She explains: “When we were set up, crypto wasn’t seen in the same way it has been the last six months. It was one that every jurisdiction globally wanted to foster and nurture to help grow.

“Part of the Dubai 2033 plan, which was set out last year, included targeting new economy sectors, and everything from blockchain and metaverse to AI and virtual assets fell under that remit.”

The 2033 plan was set out by ruler Sheikh Mohammed bin Rashid Al Maktoum to pivot Dubai’s economy to new areas and opportunities, which include turning the city into one of the leading smart cities in the world.

New economy sectors make up around $100 billion of that goal, according to these plans.

“One of the obvious elements missed by that formulation is any regulation around virtual assets,” adds Raja Carbon. “So, if you stopped thinking about virtual assets as a vertical, and started to see this as a horizontal, almost a transversal, none of the others would be able to be attractable or grow as a consequence. For that scalability, we needed to build a foundation – and that is VARA.”

In February this year VARA issued the much-anticipated Virtual Assets and Related Activities Regulations 2023, setting out the regulatory framework governing Virtual Assets and all related activities in the emirate, with several updates announced since. Its remit is only for the Emirate of Dubai.

Now, more than 800 companies operate in Dubai within the space covered by VARA without licences, although Raja Carbon has set a goal that by the end of the year, all of these entities will either have the correct registration, or will be in the process of registering, for a VARA licence to operate.

“So, by the end of the first quarter of next year, you’re either going to have them formally applying for our licence, or winding down completely,” she adds.

To deal with the wider market and those companies who may be related to virtual assets but not directly in that remit, VARA has launched the Dubai legacy programme, which should impact around 850 companies. This will allow them to go through a transition period to align activities with VARA regulations through a temporary licence.

VARA only covers the Emirate of Dubai – the rest of the UAE has its own crypto rules under the Emirates Securities and Commodities Authority (ESCA) while payments are still regulated by the UAE Central Bank.

So how does VARA balance Dubai’s goal to become the leader in this sector, with the need to protect from bad actors through regulation?

“We set ourselves up to be a very agile regulator,” explains Raja Carbon. “I don’t mean agile just in terms of the response to market but also the regulations having to be tweaked, knowing that this is not a static industry. It’s dynamic, it’s going to change, and regulators are only as good as their awareness of what the market can do.

“Our regulations are going to constantly evolve, but we need to protect those that need most protecting, and that means not being completely loose so that a person isn’t sure where they are going to land.”

Dubai: We built this city on block and chain

Around the world

Now, there is little sign that other countries are going to follow Dubai’s route with a dedicated regulator, but several are making moves.

Spectrum Search’s Wood points to Switzerland and Singapore as two nations who stand out as having embraced a “proactive, yet balanced, approach” to cryptocurrency.

He explains: “Singapore’s Monetary Authority provides clear guidelines and fosters innovation while ensuring investor protection. Switzerland’s ‘Crypto Valley’ in Zug has become a global hub thanks to its forward-thinking regulatory framework that is both business and investor friendly.

“It’s the synergy of clear rules, accessibility to regulators, and an overall progressive mindset that makes these countries stand out in the crypto legislative landscape.”

The post As FTX founder is convicted, can regulation revive crypto’s reputation? appeared first on TechInformed.