Brazil Watchdog Prohibits Funds from Crypto Investing

Сountry’s regulators are currently working on crypto regulation
15 January 2018   181

The Securities and Exchange Commission of Brazil (CVM) said that local investment funds are prohibited from investing in cryptocurrencies. This is reported by Bitcoin.com.

The corresponding CVM directive is addressed to all employees and official agencies responsible for monitoring the activities of investment funds in the country. The document says that the crypto-currencies are not regarded by the regulator as financial assets, and therefore direct investment in them is prohibited.

Moreover, local funds wishing to invest in the cryptocurrency not directly but through foreign companies are advised not to rush into this and expect further statements by the regulator.

In May last year, the House of Representatives of the National Congress of Brazil created an ad hoc committee to regulate crypto-currencies. During the second half of last year, it held seven public hearings on issues related to digital assets.

In December 2017, CVM and the central bank of Brazil issued a joint statement, which deals with the risks associated with crypto-currencies. In the same month, the representative of the House of Representatives, Expedito Netto, proposed recommendations that, in effect, prohibit cryptotrading, storage, and exchange of digital currency for fiat without official authorization. As punishment to violators, the people's deputy recommended imprisonment for up to six months or a fine. At the same time, Netto did not specify what exactly such a "permit" should be like.

In addition, during the December public hearings, Jonathas Ramalho, Executive Director of Banco do Brasil, spoke in favor of regulating crypto-currency. In his opinion, the creation of rules for circulation of digital money in the country will help create an enabling environment for the development of the blockchain industry.

Bank of China Filed a Patent to Scale Blockchain Systems

Bank of China has filed a patent application for a process able to scale blockchain systems  
23 February 2018   108

According to a document released by China's State Intellectual Property Office (SIPO) on February 23, the application was invented by Zhao Shuxiang and first submitted on September 28 last year.

The application states that instead of letting a new block store transactions from its previous one, a data compressing system could be used to pack transactions from multiple blocks into what the patent calls a "data block."

For example, when the system receives a request to compress transactions from block 1 to 1,000, it causes a new data block to be formed and temporarily hosted on a different storage system. Then, the system will run the packed data through a hash function with a hash value. After that, the compression system will attach labels in order to identify blocks on the blockchain.

With the use of the described method, the patent claims a reduction in the amount of the data stored in new blocks as transactions mount in a blockchain while ensuring that data from all previous transactions will still be tamper-proof and traceable.

At the moment, the patent in the review process.