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Why Nassim Taleb says bitcoin is worthless

21 July 2021
Knowledge Base

by Michael Edesess

Nassim Nicholas Taleb doesn’t mince words. When he thinks that something is worthless, he says so. In a recent paper he says in no uncertain terms that bitcoin is worthless. However, those “uncertain terms” are not only in mathematical language but in Taleb-speak. They need some explanation and interpretation. I will provide it in this brief article. In a new paper, “Bitcoin, Currencies, and Fragility,” Taleb aims a scattergun at bitcoin and its underlying database technology, blockchain. Some of those scattershots merely ding bitcoin or blockchain only slightly, or not at all. But some of them hit the mark squarely. Continue reading…

Nikhil Rathi: Transforming to a forward-looking, proactive regulator

20 July 2021
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Nikhil Rathi, Chief Executive of the Financial Conduct Authority (FCA), recently delivered a speech at the launch of the FCA’s Business Plan. When I became CEO last October, I joined a purposeful organisation. Our people working round the clock with great energy and to great effect to stand up for consumers and businesses affected by the pandemic. Almost five million payment deferrals granted across credit cards, loans and mortgages to people who had suddenly little or no money coming in. Businesses forced to close or scale back operations won insurance payments of more than three-quarters of a billion pounds for COVID-related losses thanks to our efforts in the Supreme Court. And all the while, the global markets we oversee proved resilient at a time of unique stress and volatility – laying the foundations for record capital raising this year to support economic recovery. Continue reading…

Eurosystem launches digital euro project

19 July 2021
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The Governing Council of the European Central Bank (ECB) recently decided to launch the investigation phase of a digital euro project. Following the decision, the President of the Eurogroup Paschal Donohoe joined the meeting, congratulated the Governing Council and expressed his full support for the project. “It has been nine months since we published our report on a digital euro. In that time, we have carried out further analysis, sought input from citizens and professionals, and conducted some experiments, with encouraging results. All of this has led us to decide to move up a gear and start the digital euro project”, says ECB President Christine Lagarde. “Our work aims to ensure that in the digital age citizens and firms continue to have access to the safest form of money, central bank money”. Continue reading…

Coordinated action cuts off access to VPN service used by ransomware groups

16 July 2021
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Takedown of DoubleVPN makes it harder for criminal hackers to cover their tracks. This week, law enforcement and judicial authorities in Europe, the US and Canada have seized the web domains and server infrastructure of DoubleVPN. This is a virtual private network (VPN) service which provided a safe haven for cybercriminals to attack their victims. This coordinated takedown, led by the Dutch National Police (Politie), under jurisdiction of the National Public Prosecutor’s Office (Landelijk Parket), with international activity coordinated by Europol and Eurojust, has now ended the availability of this service.  Continue reading…

FCA consults on reforms to improve the effectiveness of UK primary markets

14 July 2021
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The FCA has launched a consultation on a series of proposed reforms to improve the effectiveness of UK primary markets, alongside a discussion of how it might continue to develop the regime to ensure the UK remains a competitive and dynamic market. Recently, both the UK Listing Review, chaired by Lord Jonathan Hill, and the Kalifa Review of UK FinTech have made specific recommendations for improvements to the regime. The FCA’s suggested reforms seek to address, and build, on the proposals in these important reviews to ensure that the UK remains an attractive place to grow and list successful companies. Continue reading…

What did discussions on international tax reform focus on?

13 July 2021
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Members of the Organization for Economic Co-operation and Development (OECD) / G20 / Inclusive Framework worked on a global consensus-based solution to reform the international corporate tax framework. The discussion focused on two broad work streams: Pillar One, the partial re-allocation of taxing rights, and Pillar Two, the minimum effective taxation of profits of Multinational Enterprises (MNEs). Pillar One aims to adapt the international rules on how the taxation of corporate profits of the largest and most profitable MNEs is shared amongst countries, to reflect the changing nature of business models, including the ability of companies to do business without a physical presence. Pillar Two will set a floor to excessive tax competition. It aims to ensure that multinational businesses are subject to a minimum effective level of tax on all of their profits each year.
Continue reading…

FCA, PRA and Bank of England set out plan to improve diversity in regulated firms

12 July 2021
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FCA, PRA and Bank of England set out plan to improve diversity and inclusion in regulated firms. The FCA, Prudential Regulation Authority (PRA) and Bank of England (the regulators) are seeking views on regulatory plans to improve diversity and inclusion in financial services. In a discussion paper, the regulators have set out policy options including, among others, the use of targets for representation, measures to make senior leaders directly accountable for diversity and inclusion in their firms, linking remuneration to diversity and inclusion metrics and the regulators’ approach to considering diversity and inclusion in non-financial misconduct. The discussion paper also focuses on the importance of data and disclosure in order to enable firms, regulators and other stakeholders to monitor progress.   Continue reading…

Operational risk management during COVID-19: Lessons learned

05 July 2021
Knowledge Base

by Elena Pykhova

During the COVID-19 pandemic, in addition to dealing with financial challenges such as a drop in assets or liquidity, organisations are faced with issues that go to the core of operational risk management – people, systems, processes and the external environment. The crisis acted as a real-life stress test of existing frameworks and processes, and lessons learnt from the pandemic will trigger changes to how firms view and manage their operational risks.  Continue reading…

Judicial experts discuss latest trends in cybercrime and support to victims of malware

02 July 2021
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Judicial experts and practitioners in the field of cybercrime will focus on new trends in their domain and how to tailor investigations, during the 10th Plenary Meeting of the European Judicial Cybercrime Network (EJCN), which takes place today and tomorrow. The EJCN Plenary, hosted by Eurojust in an online format, will also give special attention to supporting victims of cybercrime. One of the particular topics in this regard is the recent taking down of the Emotet malware bot in a major cross-border operation with support from Eurojust and Europol. Continue reading…

Photo: Painting by Jan Brueghel de Jonge "Allegory of the Tulip Mania", from about 1640

Crypto and tulip mania

01 July 2021
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by Michel Klompmaker

It was coming. Another crypto scandal. Now two South African brothers seem to have run off with 69,000 bitcoins from customers who had entrusted their money to Africrypt. This amounts to several billion euros. The two brothers had founded their company in 2019 in Johannesburg. As usual in this market, they promised high returns and they targeted high net worth individuals. Last April, there was a glitch in which customers were warned that the company had been hacked and that online crypto wallets were at risk. Let’s go back to the seventeenth century just to be sure. How did it come to sit with the tulips again? Continue reading…