Limited KYC Checks for Stablecoins Add to 'Lack of Regulatory Clarity', Users Claim

  • Twitter user Whalepool argued that KYC checks for stablecoins are only performed at the time of "creation/redemption" and not during "on-chain" transactions.
  • Cryptocurrency regulations remain unclear as these are still in their early development stages.

Twitter user Whalepool, which claims to be a “community of day traders” focused mainly on bitcoin (BTC), argued today via the microblogging platform that all stablecoins, which are supposedly backed by USD, including Circle’s (USDC), True USD (TUSD), Gemini Dollar (GUSD), and the PAX Standard Token (PAX) do not facilitate anti-money laundering (AML) and know-your-customer (KYC) transfers “on the blockchain.”

According to Whalepool, these checks are performed only “at creation/redemption.” Once the stablecoins are in circulation, users are able to move them to any Ethereum address - without having to go through any KYC checks.

"Self-Regulation", Not "State Coercion"

In order to support their claim, Whalepool shared some “important facts” that CryptoGlobe had reported about the Paxos Standard token. The day traders highlighted this particular part: “Paxos Standard has been designed as an Ethereum token written according to the ERC-20 protocol, so that anyone with an Ethereum wallet will be able to send and receive Paxos Standard tokens."

Whalepool, which states that it represents a diverse group of cryptocurrency traders including students and entrepreneurs, claims to advocate, or support, self-regulation and not what it describes as “state coercion.” Notably, it is not only the PAX stablecoin that is not subject to “on-chain” KYC checks, but also transactions involving all other stablecoins such as Tether (USDT).

"Lack Of Regulatory Clarity"

Currently, there appears to be a “lack of clarity” regarding cryptocurrency regulations - which is one of the main factors cited by BNP Paribas’ and Capgemini’s World Payments report that may potentially inhibit the mass adoption of blockchain-based payments systems.

The report, produced after executives from leading European organizations were surveyed, found that over 83% of respondents said the premature regulatory landscape for blockchain-enabled payments systems is significantly limiting its use at the enterprise level.

As CryptoGlobe reported, Sarah Olsen, Gemini’s head of business development, argued the world’s digital currency market is currently immature - which is why it’s extremely volatile. Olsen explained that the markets are experiencing “underlying friction” as traders convert from cryptocurrency to fiat money (and vice versa).

Stabelcoins Expected To Bridge Gap Between Crypto And Fiat

One of the issues involved here, according to Olsen, is that traditional fiat currency is only supposed to “move” during normal banking hours. Although she claims that stablecoins such as the GUSD help bridge these kinds of gaps, there is still a great degree of uncertainty in the nascent crypto markets.

As CryptoGlobe covered, bitcoin (BTC) and other major cryptocurrencies surged over 10% on October 15 due largely to a massive USDT selloff. Investors began selling their USDT holdings in exchange for other cryptos amid heightened fears regarding Tether and Bifinex’s banking operations.

While some might think the new stablecoins could be used as a “flight to safety” by crypto traders, it’s possible their users may begin to have similar concerns about them - which could again lead to wild fluctuations in crypto prices.

Theta Network's THETA and TFUEL Tokens Are Up 437% and 630% in 2020

Siamak Masnavi

THETA and TFUEL, the governance and operational tokens of Theta Network protocol (developed by Theta Labs), which is designed to address the problems with existing solutions for live video streaming. Both of these cryptoassets have experienced tremendous price appreciation in 2020. 

Theta's solution is decentralized peer-to-peer (P2P) video delivery powered by its own native blockchain (which uses Multi-BFT Consensus), which in turn is powered by the users. As you watch your favorite live video streamers, or when you are not using your computer, Theta uses your spare upload bandwidth to relay streams to other users in your local area, and rewards you with TFUEL tokens.

The Theta mainnet was launched on 15 March 2019, but it was back on 14 February 2019 when Theta Labs explained via a blog post the difference between Theta Token (THETA) and Theta Fuel (TFUEL) token:

Theta Labs said that THETA is the governance token of Theta protocol, and that it is used "to stake as a Validator or Guardian node, contributing to block production and the protocol governance of the Theta Network." Users earn "earn a proportional amount of the new TFUEL generated" by "staking and running a node." THETA has a fixed maximum supply of one billion.

As for TFUEL, it is the operational token of Theta protocol. TFUEL "powers on-chain operations like payments to relayers for sharing a video stream, or for deploying or interacting with smart contracts," and it is earned by relayers "for every video stream they relay to other users on the network." 

Both THETA and TFUEL are native tokens of the  Theta blockchain.

These two cryptoassets have been two of the best-performing cryptoassets in 2020 as the two TradingView price charts (for the year-to-date period) below illustrate:

THETA-USD TV Chart on 27 May 2020.png

TFUEL-USD TV Chart on 27 May 2020.png

The THETA price has gone up over 437% against USD (to reach $0.468)  in the YTD period. As for the TFUEL price, it has increased over 630% to $0.0146.

THETA and TFUEL are currently ranked #27 and #93 by reported market cap.

There are three reasons for such amazing price appreciation in 2020:

  • Rapid growth in the number of users of decentralized video streaming platform Theta.TV due to multiple new partnership deals (such as with Samsung and NASA) and the growing demand for entertainment from all the people forced to stay at home due to lockdown measures introduced as the result of the current COVID-19 pandemic. In particular, Theta.TV has been hosting several important virtual blockchain conferences in the past few weeks, most notably Coindesk's Consensus: Distributed conference.
  • The upcoming launch of version 2 of the Theta Mainnet (this is expected to go live around 22:00 UTC on May 27).

Interestingly, the day for Theta's network upgrade (which is supported by Binance) coincides with the day on which NASA and Elon Musk's SpaceX are launching the Falcon 9 rocket:

Update at 13:40 UTC on May 27:

According to a report by Coindesk, Google is "teaming up with Theta Labs in a move meant to help the video delivery network onboard users through Google Cloud." The report goes on to say that Google will "become the protocol’s fifth external validator node, staking 5 million THETA tokens (worth about $2.4 million at a press-time price of $0.48 each) on the network."

Theta Labs CEO Mitch Liu is hoping for further collaborations with Google:

“YouTube is particularly interesting because they utilize mostly internally-developed technology for video delivery and streaming, which makes experimentation a lot easier without having to rely on external platforms like Akamai or AWS."

The announcement seems to have given THETA token's price another push, as you can see from the 24-hour THETA-USD price chart (from CryptoCompare) shown below:

THETA-USD 24 Hour Chart on 27 May 2020.png

Featured Image Courtesy of Theta Labs