Scotcoin announces that it has terminated its contract to develop a new KYC and AML blockchain solution for the digital currency following a lengthy and difficult period of discovery and consolidation in respect of the contract.
However, we are also pleased to announce we are in advanced discussions with a new supplier and we expect to be in a position to make an announcement in the first quarter of this calendar year. We are currently going through the financial and legal due diligence process.
The proposed new contract will provide Scotcoin with its own distributed ledger technology infrastructure which will be fully compliant with KYC and AML in all respects. It will be capable of processing a high volume of confirmations and transactions per second at minimal cost. It will also provide Scotcoin with its own fully compliant wallet.
Upon delivery of the solution it is anticipated that migration terms including incentives will be announced shortly thereafter.
Scotcoin will be entering into a consultation process with key stakeholders over the coming weeks and further announcements are anticipated.
Willie Fleming, Director, The Scotcoin Project CIC said: “We have had a very difficult year and have had many obstacles to overcome. These have held us up beyond what we expected. We are confident that now we have the right partners to take us forward to fruition”
On December 15, 2017, the European Council and the European Parliament finally agreed the 5th AML (Anti Money Laundering) Directive. This directive contains the first legally binding definition of virtual currencies and is the most significant regulatory action over virtual currencies anywhere in the world.
Because of a Swedish ruling a couple of years ago, upheld by the ECJ ( European Court of Justice) recently, virtual currency transactions are exempt from VAT according to the current EU laws and regulations. The binding force of case law of the ECJ is recognized without objection by all EU member states & courts i.e. virtual currencies are exempt from VAT across all jurisdictions of EU member states. At present UK does not recognise cryptos as either currency or commodity. It is certain the UK authorities will make a determination at some point in the future.
The UK leads in Fintech innovation, as the place to be for financial entrepreneurs; however, cryptocurrency regulation in the UK is behind others. All issuance of equity and debt are regulated by the FCA (Financial Conduct Authority) whose aim is seamless operation of financial markets, by providing protection for consumers and investors, plus promoting effective competition in markets. The FCA maintains that:
“cryptoassets designed primarily as a means of payment or exchange do not sit within the scope of FCA authority.”
While SEC and CFTC engage in crypto market regulation in the U.S, virtual currencies are mostly unregulated in the UK. The FCA doesn’t consider virtual currencies to be currencies or commodities under the MiFID II (markets in financial instruments directive) and, therefore, has no jurisdiction over them. It has authority over activities related to virtual currency derivatives such as bitcoin futures, options, or crypto-linked ETFs (if approved). The FCA’s position is ambivalent. On the one hand, the FCA never explicitly declared authority over security offerings in the form of ICOs/STOs, but on the other, it issues consumer warnings describing ICOs as “very-high-risk speculative investments” and unhelpful statements such as “Whether an ICO falls within the FCA’s regulatory boundaries or not can only be decided case by case.” Difficult to navigate that one…
Regulatory Authorities in the UK intend to apply AML regulations in order to comply with the EU’s 5th AML Directive. Along the same lines, the Treasury has revealed their intentions to regulate cryptocurrency traders, requiring them to abide by KYC (Know Your Customer) regulations and disclose their identities as well as report suspicious activities.
UK Tax with regard to virtual currencies
On tax though the UK is ahead of the game. In 2014, HMRC published guidance regarding the tax treatment of virtual currencies. The UK was one of, if not the first to have a clear legal position on the issue – albeit “for tax purposes only.” HMRC guidelines clarify that:
(i) mining income is not subject to VAT,
(ii) any loss or gain arising from the holding and/or selling of virtual currencies will be treated in the same way as gains made in other commodities or currencies,
(iii) virtual currencies acquired and held for personal reasons instead of speculative purposes will probably not be subject to capital gains tax.
You can compare this with buying a painting and sticking it on your wall rather than popping it into Sothebys. The UK authorities are under pressure to produce a comprehensive strategy on virtual currencies as soon as possible. Other EU countries are currently ahead in legislative support. Theresa May has suggested the UK might follow South Korea in banning anonymous trading and regulating exchanges.
Scotcoin leading the way on digital currency legislation
#We at Scotcoin are well ahead on all these matters. On a related note, the World Bank sees the further enhanced development of blockchain as fundamental to cryptocurrency development
PRESS RELEASE: 23 October 2017 – SCOTCOIN TO MIGRATE TO ITS OWN PRIVATE BLOCKCHAIN
The Scotcoin Project is pleased to announce that it has awarded the contract to manage the migration from the Counterparty blockchain to its own private blockchain to Scotesq, a fintech company based in Edinburgh, Scotland.
The new blockchain will remove intermediate currency risk allowing participants in the ecosystem to move directly between Sterling and Scotcoin. The new blockchain will also comply with Financial Conduct Authority ‘Know Your Customer/Anti Money Laundering (KYC/AML)’ obligations.
The investors’ objective and desire is for the Scottish Government to approve Scotcoin as the country’s unofficial cryptocurrency.
Willie Fleming of The Scotcoin Project said:
“We are proud to announce this important milestone in the development of the currency. Regulation is coming to the crypto world, an evolution we both embrace and welcome. The adoption of KYC/AML responsibilities will assist Scotcoin in gaining the legitimacy and respect necessary for Scotcoin to play its rightful role in Scotland and Europe’s economy.”
David Low of Scotesq said:
“We are delighted to work with The Scotcoin Project on this important development of the Scotcoin ecosystem which will ensure all work associated with the migration will stay in Scotland.”
Notes for media:-
Scotcoin is a crypto currency established in 2014 by Derek Nisbet, a Scottish fintech entrepreneur. It operates on the Bitcoin blockchain using the Counterparty protocol and has a market value of 10 million USD placing it in the top 200 of global crypto currencies as measured by the USD value.
In 2016 all intellectual property associated with Scotcoin was acquired from Nisbet by Scottish fintech investors, David Low and Temple Melville
The investors’ desire is for the Scottish Government to approve Scotcoin as the country’s unofficial cryptocurrency. It is acknowledged that currency is not a devolved responsibility whilst Scotland remains part of the UK. Scotcoin could only become an official currency if Scotland was independent of the UK or current legislation was changed.
There have been quite a few gyrations in the Bitcoin market especially since China put the mockers on ICOs. This was then followed by Jamie Dimon – he of JPMorgan fame – saying Bitcoin was a scam. Yet today, one of the doyens of the London Gold market – Sharps Pixley – has said they will accept Bitcoin for purchases.
Legislation surrounding Bitcoin & Digital Currency
Let’s just look at both of these. The Chinese are quite rightly saying we don’t want people to lose money through fraudulent or overhyped ICO offerings. They are also saying, if you are going to put money into stocks and shares, you have to be identifiable, so if you want to do this with crypto currencies, you will have to be identifiable as well. Personally, I don’t see why people would run away from Bitcoin because of these two eminently sensible announcements. In fact, they should enhance crypto currencies in general and Bitcoin in particular. Rather than an anonymous investment in something you don’t understand, where the principals may disappear with your cash, you can invest with confidence knowing who the other people are beside you. This is precisely why Scotcoin will be entirely AML and KYC compliant. The other thing to bear in mind is that – officially officially – nothing has been set in stone in China. There are “elections” coming up in October, and it is entirely possible that OFFICIALLY officially after these things might change.
Jamie Dimon is in my view being a bit naughty. He says “ It’s a scam”. But he also says, hey it will collapse, but maybe not until it reaches $100,000. So… is that a buy recommendation? Goldman Sachs don’t appear to have doubts – they say serious investors MUST hold some crypto currencies, if only because the growth in value has outpaced everything else by a mile. And he is after all in the business of getting his investors the best deal. Traders and market makers earn money by selling high and buying cheap, and he just may have created the last, best buying opportunity for Bitcoin. The present bounce up back above $4000 is in my view a trigger.
The Sharps Pixley announcement is way up there as far as a tipping point goes. Gold might trade $22 trillion a year but Bitcoin is already around $1 trillion. And that’s from a market not yet fully nine years old.
I have a view which is entirely personal. Bitcoin isn’t going to become the currency of choice for buying coffees and pizza. Apart from anything else the cost even after the recent fall is around £1.50 per transaction. That will only increase as its value rises. What Bitcoin MAY become is something like gold, a store of value and wealth. That leaves the field for “ currency” wide open, and Scotcoin is targeting that use. We may be “Scot” but that is not pejorative or limiting. We have holders in more than 40 countries. In fact, taking into account the diaspora of successful Scots worldwide, we all might just be on to a good thing.
If you’ve been following crypto currencies, you couldn’t help but notice a 20% slide in the Bitcoin dollar price. With the way these things work, that means the whole crypto market is down by a similar amount. Bitcoin is a bit like Rocky Marciano at the moment – groggy and not doing too well, then suddenly unleashing an unbeatable flurry of punches. Remember he retired undefeated.
By the way, Bitcoin is still up on a year ago. This from a blog post on 13th September 2016 : “In the past 2 weeks, the price of Bitcoin made a surprising run up, breaking past the famed $600 level to a $630 high”. Umm so that’s up 700% ( roughly). Read more
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