Category: Business

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VAT Grouping

Categories Business, Tax, Regulatory, VAT

VAT Grouping

Pursuant to the 2018 Government Budget Speech and the introduction of Subsidiary Legislation 406.21 Value Added Tax (Registration as a Single Taxable Person) Regulations, eligible entities are now able to register for VAT Grouping in Malta through the online application form issued by the Office of the Commissioner on 30th November 2018.

Any two or more legal persons established in Malta may apply to be registered as a single taxable person if the following conditions are satisfied:

  1. At least one group member is licensed under any of the Acts identified by the Regulations;
  2. Each of the applicants is bound to one another by financial, organisational and economic links; and
  3. All group members are fully compliant with their Income Tax and VAT obligations at the time of the application.

VAT Grouping generates several benefits for businesses, including a simplification of the administrative and compliance burdens, VAT cash flow advantages and potential VAT savings. Contact us for further information to know how your company can benefit from VAT Grouping!

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5 ways to tell if your business needs blockchain

Categories Business, Blockchain, Technology, Cryptocurrency Exchange

5 ways to tell if your business needs blockchain

There is no doubt that blockchain is a buzzword in the world of business right now, but should you consider it for your needs? To help you make that decision, here are 5 things you need to ask yourself beforehand.

Are we ready to trailblaze in the world of technology?

Blockchains offer businesses a shared, secure, and totally immutable record of transactions across either a public or private network. By embarking on a blockchain project, your business will need to “go big”, something that requires commitment from you. A good example would be that of businesses operating in global supply chains. Blockchain can be used to simplify documentation processing between carriers, customs, and logistics providers (resulting in a 60% reduction in timeframes) but it requires entities working together over and on the same network.

Does our organisation want to join an extended business network to improve processes?

For many the answer will be “yes, of course”, but making a move of this type requires the willingness to change the way you have always done things, as well as allowing others to both verify and produce business results. For example, after signing up preferred vendors and other industry stakeholders onto a blockchain-based energy consortium, a solar design business was able to speed up the work process by sharing one set of specs over the entire platform. This way, all stakeholders including the customer had full visibility of the entire process from start to finish and changes and approvals could be communicated to everyone, instantly.

Do we need to authenticate or verify digital or physical assets as a part of our business model?

One of the best ways of using blockchain technology is for the tracking and authentication of digital assets such as music, digital wallets, education certificates, movies, and mortgage contracts, with each one having a digital transaction lodged against it. The blockchain can also be used to keep tabs on things such as diamonds, gold, organic foot, artwork, even though they require being checked “off-chain”. In cases such as these where authenticity and the history of a product need to be verified, it is up to trusted sources in the supply chain to audit each asset, which can prove tricky.

Do our business processes involve specific contract terms that could benefit from faster automated processes or payments?

If your business model involves contracts or sign-offs from multiple individuals, then you can benefit from blockchain. Law firms, real estate agencies, supply chains- all of these can benefit from trusted parties involved being able to see a log of all transactions that have occurred. The blockchain is particularly suited to automating smart contracts between two or more parties.

Do we trust our blockchain participants to act in good faith or do we need to incentivise them?

For example, two food distributors in France are building a blockchain ecosystem of over 500 organic suppliers to authenticate and certify where the organic foods have come from. In this case, the authentication of products relies on other individuals involved in the process meaning there is always a margin for error. In cases such as this, incentivising these individuals with tokens for their accurate participation can help to maintain the integrity of the network.

E&S Group are experienced in all matters related to blockchain, cryptocurrency and tokenomics. Our team of experts can help you decide whether you want to create your own blockchain project or implement such technology into your existing business. Send us an email at [email protected] and we will ‘make things happen’!

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Binance, the world’s top crypto exchange moving to Malta.

Categories Business, Modern, Economy, Financial Services, Blockchain, Cryptocurrency, Regulatory, ICOs, Malta, ICO Legal Service, BankTags , ,

Binance, the world’s top crypto exchange moving to Malta.

One of the world’s largest cryptocurrency exchange by traded value is seeking a fresh start on a little Crypto island in the Mediterranean.

Binance, founded last year in Hong Kong, will soon start a “fiat-to-crypto exchange” in Malta. In an interview, Zhao Changpeng stated that it is planning to open an office on the island. He added that the company mission is currently close to securing a deal with local banks that can provide access to deposits and withdrawals.

Zhao mentioned that “Malta is very progressive when it comes to crypto and fintech.”

Since last year both regulators from China to the U.S. have been cracking down on cryptocurrency exchanges and businesses, leaving many companies like Binance struggling to find a stable base. Before, the company had an office in Japan however it struggled to get a licence to operate. Moreover, Japan’s Financial Services Agency issued a notice to the venue on Friday for working without consent.

Zhao’s venue was the world’s top-ranked exchange by volume for the past 24 hours, according to Coinmarketcap.com, trading about $1.7 billion.  He mentioned that he had recently been invited by the Maltese government to review an upcoming bill that was favourable to crypto businesses.

Malta came to play as policy makers and the government has held public consultations on regulating virtual currencies, token sales, and crypto-exchanges. Last month there was the unveiling of the plans by the Malta Digital Innovation Authority that will certify and regulate blockchain-based businesses and their operations which will also create a framework to oversee initial coin offerings, the Malta Independent newspaper said.

In the coming months, Binance, is currently underway to launch a decentralized exchange.

If you have any questions in relation to cryptocurrency or ICOs, please contact us on [email protected]

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Debating new laws on the MFSA act – A new autonomous company registry

Categories Business, Financial Services, Regulatory

During the annual IFSP conference titled, ‘Efficiency and Innovation, the way forward for Malta’s Financial Service Industry’, Parliamentary Secretary for Financial Services Silvio Schembri, announced that a separate, standalone registry of companies is going to be created. This motion is still in progress however it will help the Malta Financial Services Authority (MFSA), to focus more on its regulatory roles.
During the conference, Hon Schembri emphasised that there is a need to strengthen the internal management structure of the authority. This will then help to make it more proactive and explore non-traditional segments of the market.
The Parliamentary Secretary stated that “This will primarily be spearheaded by the creation of a new role, that of a CEO”. This idea of a new autonomous registry was brought up through a public consultation a few months back.

For more information visit our website www.ellulschranz.com

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Why is it vital to regulate Cryptocurrencies?

Categories Business, Cryptocurrency, RegulatoryTags

During Yahoo Finance’s cryptocurrency event in New York, a recurring theme was of the regulation of cryptocurrencies. They were discussing the outcome of Tuesday’s hearing of the U.S. Senate Banking Committee.

There needs to be regulation to avoid shady transactions and control illegalities. The Commodity Futures Trading Commission (CFTC), argued that it is time that cryptocurrencies should try self-regulation. The chairmen of the U.S. Securities and Exchange Commission (SEC) and CFTC agree that there has to be an open positive discussion towards crypto.

Crypto is experiencing a backdrop in the economy. During Tuesday’s hearing, the Senate was speculating about what might happen to the economy.

During the Yahoo event, Brian Quintenz who is a member of the CFTC stated that “…you didn’t hear either chairman say ‘no, absolutely not, this is not safe, we must stop this at all costs”.  Jurisdiction gap identified and passed by the SEC and CFTC take a long time to be implemented. Thus, the commissioner called upon the industry to consider regulating itself.

Furthermore, Adam White, general manager of the Coinbase-operated digital exchange GDAX argued that his company will welcome the government’s oversight through regulations. Coinbase excepts regulations passed through the senate and comply with them. Mr. White stated that (at Coinbase) “We recognise that regulations are a complementary part of the financial system in many ways”.

A common point that kept recurring during this event was that cryptocurrencies are there to stay. They want to be part of an open discussion about regulation from the federal government in the U.S.

The CEO of Ripple, Brad Garlinghouse argued that his company is open to have regulations. The US dollar is not going to be replaced anytime soon. “The revolution’s going to happen inside the system.”

BitPesa CEO Elizabeth Rossiello stated that “In an ideal world, we wouldn’t have regulation.” However, for a cryptocurrency business to be credible, it has to comply with government rules and regulations.

For more information visit our website www.ellulschranz.com

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SEC and CTFC Hearing- Bitcoin, DLT, ICOs and education of the masses.

Categories Business, Blockchain, Regulatory, ICOsTags

Earlier this week, the Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC) met in Washington D.C. to discuss their applicable roles in Blockchain, virtual currencies, and ICOs. The open-air session took place over two hours, and both sides were given an opportunity to put forward their opinion and views in the form of a testimony.

Prior to the meeting, J. Christopher Giancarlo who holds the position of chairman and witness for the CFTC, voiced his optimism in the field of Blockchain and the many ways in which financial institutions, charities, agriculture, social services, and logistics can all utilise the technology to benefit themselves and their operations. Giancarlo even went as far as to press for more freedoms for DLT and made numerous comparisons between it and the internet:

This simple approach is well-recognized as the enlightened regulatory underpinning of the Internet that brought about such profound changes to human society. During the almost 20 years of “do no harm” regulation, a massive amount of investment was made in the Internet’s infrastructure. It yielded a rapid expansion in access that supported swift deployment and mass adoption of Internet-based technologies. Internet-based innovations have revolutionized nearly every aspect of American life, from telecommunications to commerce, transportation and research and development. [“Do] no harm” was unquestionably the right approach to the development of the Internet. Similarly, I believe that “do no harm” is the right overarching approach for distributed ledger technology.”

Despite his enthusiasm, Giancarlo stated that the world of digital currencies was in need of more regulatory oversight, particularly when considering the threat of fraud and manipulation. He concluded by addressing both the SEC and CFTC and calling for them to not stifle the growth of this burgeoning sector. Calling virtual currencies, a “paradigm shift in how we think”, he stressed that this technology is not going anywhere and instead a way must be found to allow it to complement economic activity.

The chairman of the SEC, Jay Clayton was a little less enthusiastic about virtual currencies, but he stopped short of dismissing their vital role in a new, financial ecosystem.

“To be clear, I am very optimistic that developments in financial technology will help facilitate capital formation, providing promising investment opportunities for institutional and Main Street investors alike. From a financial regulatory perspective, these developments may enable us to better monitor transactions, holdings and obligations (including credit exposures) and other activities and characteristics of our markets, thereby facilitating our regulatory mission, including, importantly, investor protection.”

He did, however, recognise that those who choose to actively partake in the opportunities that this technology provides, deserve to be protected by federal law and further regulation should be developed to protect these individuals from fraudsters and the like.

Recent studies have shown that as much as 10% of ICO funds raised have been lost to fraudsters and hackers, and this translates to a lot of investors losing a lot of money. Clayton address the recent step taken by Facebook to ban the advertising of ICOs on its platform and branded it a responsible step, adding that whilst it is important to pursue technological advancement, it should not be at the expense of the principles that govern the protection of investors and markets.

The SEC and CFTC have built a strong relationship and have both demonstrated that they are willing to work together to create a robust regulatory framework which will cover all aspects of DLT, ICOs, and virtual currencies. Whilst each area requires different levels of regulation, it is important that a one-size-fits-all approach is not adopted.

Both sides added, that whilst regulation is important, it is also imperative that education is provided to further assist in the overseeing of cryptocurrencies. It was also agreed that the best way to avoid negative situations around virtual currencies and DLT, is through the education of the masses, utilising currency jurisdictional powers over BTC to collect data and keep track of the markets, and to crack down on fraudsters who are scamming those partaking in ICO pyramid schemes, and worthless cryptocurrencies.

For more information visit the site:

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CCP’s Second Stress Test Resulted fit to stand economic turmoil.

Categories Business, Economy, RegulatoryTags

Last Friday, 2nd February 2018, the European Securities and Markets Authority (ESMA), published their results on their second stress test. This outcome was to check if Central Counterparties (CCP) will survive in economic turmoil, within different financial institutions. This second stress test aided in checking if the EU CCP system is able to withstand Clearing Member (CM) defaults and severe market shocks.

In 2016, the first CCP stress test has been conducted. During the first test, ESMA focused on the counterparty credit risk, whereas in the second exercise they included liquidity risks. By this, they have examined if CCPs would encounter any liquidity needs under different stress scenarios.

According, the Steven Maijoor, who chairs ESMA, the CCPs are low-risk entities. If CCP fails, then it has the potential to cause serious systemic risk, that is why it is important to test if the CCP is able to withstand different extreme market shocks.

Furthermore, Mr. Maijoor said that “I am pleased to see that EU CCPs have responded well to the rigorous scenarios used in conduction this second EU-wide stress test and are overall fit for purpose with sufficient resources to withstand severe market conditions.”

Results from the ESMA’s stress tests.

In the second CCP findings result that the EU CCPs are resilient having a developed stress methodology. To obtain its results for each individual CCP, to harmonize price shocks, ESMA selected the top-2 groups of CMs thus assuming results obtained for each individual CCP.

The concluding results did not detect any liquidity in the CCP. Moreover, no records found any major systematic risk.

Extreme market price shocks were tested.

To check CCPs vulnerability ESMA tested extreme price shocks. This enabled to provide scenarios that were being provided by the European Risk Board (ESRB). These market price shocks helped to identify, in every financial situation how CCP will react to them. The result was satisfying, having minor shocks to the financial institution. The stress test also monitored through credit and liquidity.

This stress test done by ESMA was beneficial so to help identify possible vulnerabilities and secure safety and resilience of the EU Central Counterparties (CCP). By the effect of the two stress tests conducted in both 2016 and 2017, it has resulted that the Central Counterparties will survive in any financial turmoil may it happen in the coming years.

For more information visit our website www.ellulschranz.com

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A new Forum is launched by the European Commission – Blockchain Observatory and Forum (BOF)

Categories Business, Blockchain, Cryptocurrency, ICOsTags

On February 1st, 2018, the European Commission has launched the Blockchain Observatory and Forum (BOF).

The European Union, (EU) realized the need to be part of the digital single market with regards to blockchain technology. This new development is going to boost European actors to engage with multiple stakeholders working on such blockchain activities.

Blockchain technology has taken a blow in the industry of cryptocurrencies and is seen as a major breakthrough. Blockchain stores information which is then distributed to a chain of networks storing data provided. This system is of high security and reduces the risk of hackers to steal data, hence bringing a high level of traceability. In the coming future, blockchain will help to transform business models in various areas, some of which are healthcare, finance, intellectual property right management and government services.

‘Blockchain…have (a) huge potential for making social and economic transactions more secure online by guarding against an attack and removing the need for any middleman’ said Vice-President for the Digital Single Market Andrus Ansip.

Furthermore, Mr Ansip stated that through BOF, they would help create and European talent base for prominent start-ups to develop and invest in the rollout of the blockchain.

Mariya Gabriel, Commissioner for the Digital Economy and Society, stated that she wants Europe to become a game changer in this new development.

BOF role is to seize new opportunities being offered by blockchains in Europe. This has resulted in many European innovators and entrepreneurs in different public and private sectors are engaging in this pilot project.

BOF will work by gathering information, monitor this information, analyse trends and be addressing challenges thus exploring blockchain socioeconomic potentials in European countries.

The European Union hopes that this will help cross-border cooperation and bring together Europe’s best experts in the field to work together on this exciting new project. Europe has the potential of becoming a leading source of blockchain technology.

More information may be found on: http://europa.eu/rapid/press-release_IP-18-521_en.htm

For more information visit our website www.ellulschranz.com

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Taipei Partners with IOTA – A Smart city is being created

Categories Business, Blockchain, Cryptocurrency

Taipei Partners with IOTA – A Smart city is being created

Taipei a city in Taiwan chose to team up with IOTA, to become a smart city. By this, inventors of the Internet of Things (IoT) will help residents to have a number of new technology features through utilization of Blockchain or Distributed Ledger.

The Commissioner of the Department of Information Technology in Taipei City, Wei-bin Lee, stated that the citizens of Taipei will see a new era of smart cities. IOTA will offer this unique technology.

ID cards, for the citizens of Taipei is the first project that will take place. These ‘TangleID’ cards will rely on the use of  ‘Tangle technology’. This creation has many positive functions some of which will help to decrease any possible risk of identity theft and voter fraud. Another positive outlook for these ID cards is that it will keep track of health history and government-related data services.

Another project that IOTA is working on to improve this city, is to create a palm-size card with active sensors aiding to detect light, temperature, humidity, and pollution. This innovation will keep up-to-date information with regards to pollution levels in real time to the citizens of Taiwan.

David Sønstebø, co-founder of IOTA Foundation, stated that this massive project is nearly ready to be implemented. He also noted that ‘the technology is ready for real-world use cases and is more than just a theory’.

For more information visit our website www.ellulschranz.com

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Long awaited Hyperledger Sawtooth is Ready for Business Use

Categories Business, Blockchain, CryptocurrencyTags ,

After being considered as one of the most promising code bases in the Hyperledger blockchain consortium, Sawtooth software from Intel is now ready for use by enterprises.

In news released this week, version 1.0 of Sawtooth offers features that are inspired by both public blockchain and by Bitcoin, but that have been reimagined and repackaged for enterprise use.

The brainchild of over 50 contributors from leading start-ups such as Bitwise and R3, and more corporate entities such as Red Hat and Capital one, it is hoped that it will stand apart from the rest due to its modular functionality which is designed to give enterprises in a range of industries a running start when it comes to meeting consumer and regulatory demands.

Some of the companies that were amongst the first to adopt Sawtooth include Huawei, T-Mobile, and Amazon, all of which are using the Hyperledger version of the product in their operations.

The technical lead at Intel and maintainer of Hyperledger Sawtooth, Dan Middleton has positioned the software as a means for enterprises whose operational demands far exceed the capabilities of existing available public blockchains.

He added: “We feel that if companies really want to adopt blockchain, or a distributed ledger then we shouldn’t forgo the basic blockchain properties in taking something from a public chain to enterprise usage.”

A step-up from Hyperledger Fabric

Hyperledger Sawtooth is the second open-source blockchain platform that offers an enterprise-ready 1.0 version, coming after IBMs offering of Hyperledger Fabric which was launched in 2017. In terms of development, the launch of 1.0 software solutions is a hugely important addition to any code base as it means that the maintainers are not just committed to its core features, but that they gain a sense of confidence that the build is compatible with future upgrades.

But in addition to the importance of projects such as these to developers, there is another differentiator which was pointed out by the Sawtooth team during the launch. This is the innovative way in which computing networks run the software and the way that they will be able to gain consensus on mission-critical events.

Proof of Elapsed Time

In particular, Sawtooth marks the enterprise debut of a mechanism called PoET (Proof of Elapsed Time) which is an update on an older system called Byzantine Fault Tolerance which allows users to reach a consensus in a situation where counterparties may or may not know each other.

When we look at other permissioned blockchains, we see that it requires that the users know and trust each other. This new type of blockchain platform can resist DoS attacks which are common on public blockchains, or on one where unknown parties may be interacting

The issue of compatibility with other similar blockchains is still being pursued, support for the solidarity smart contract language, which was first pioneered by the Ethereum blockchain. Smart contracts can also be created in Go, JavaScript, and Python, amongst others.

Hardware Integration

Hyperledger Sawtooth has also become well known for the way in which it can be integrated with its hardware security solutions. Central to the Sawtooth PoET consensus mechanism, is an ability to integrate with certain hardware security solutions which are known as “trusted execution environments” such as Intel’s scalable Xeon processor.

The concept of possible hardware integration was originally seen as a little controversial as it places security considerations of a decentralised ledger behind the protection of a hardware that could be fallible. Sawtooth maintainers have since emphasised that this is part of a delicate balancing act that must be struck between leveraging the strengths of public blockchains, with the volume of transactions, and the security demands of enterprise companies.

Whilst a particular company may provide these hardware solutions and trusted execution environments, Sawtooth has not restricted that option to just Intel.

 

Contact us to find our more on [email protected]

www.ellulschranz.com

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