ARK36, the Cyprus-based leading alternative investment digital asset fund, has announced today the launch of a unique, proprietary machine learning-based trading software system, to improve the way its portfolio management team can navigate the dynamic world of cryptocurrency trading. The new software will leverage advanced algorithms to enable ARK36s traders to make more informed decisions, navigate market challenges and optimise their trading strategies with precision and confidence. The software will access updated cryptocurrency price information every second and through the recent many months of intensive development work, back-tests and live-tests will predict price movements of specific crypto assets and complete either short or long-positions or not trade dependent on the market developments. It can make investment decisions within 1 minute for complex investments or 1 second for simple tasks.

A key element of the software isAdvanced Algorithmic Trading,utilising sophisticated algorithms to analyse vast amounts of market data, identify patterns, trends, and opportunities in real-time, allowing swift execution and maximum profit. This algorithm uses machine learning to continuously learn and adapt to market conditions, improving its decision-making capabilities over time. An intuitive, user-friendly interface simplifies the trading process, enabling users to easily customise strategies and monitor performance. Built-in risk management and portfolio optimization features help ARK36s traders to mitigate potential risks, while other tools include price alerts, technical indicators, and technical updates. In testing, the software displayed an average monthly +10% increase in performance gains over 12 months. Tests also proved the effectiveness of the softwares risk mitigation and wealth preservation systems, designed for investors who prefer to have stable, smaller returns.

ARK36s team developing and maintaining the new software includesMikkel Morch, Chairman and Non-Executive Director of ARK36, andDr. Mark Moore,Senior Developer and Chief Executive Officer at Atlantic Alpha Strategies LLC, an absolute return hedge fund and a development company in machine learning technology. Mikkel Morchs role is to ensure the effective use of different forces and competencies within and outside of the fund and that the software company is put to optimal use, and to secure financing for the development of the technology.

Dr. Mark Moore is well-known in the investment industry for co-founding Trendlogic Associates, Inc., a registered Commodity Trading Advisor. He served as a board member at numerous well-known companies, including the large international hedge fund Millennium Partners, LP and Health Discovery Corporation. Dr. Moore is at the core of the technical development team and will coordinate the technical efforts with the rest of the Board and other developers from ARK36s team.

Mikkel Morch, Chairman and Non-Executive Director at ARK36,commented:"We are proud to introduce our algorithmic trading system, a state-of-the-art machine learning trading software system that empowers our traders in the ever-evolving cryptocurrency market. Our mission is to level the playing field by providing our traders with a cutting-edge tool that harnesses the power of data and technology. Our algo aims to bring even higher levels of efficiency, accuracy, and profitability to our cryptocurrency trading."

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THE PHILIPPINES should be on guard for issues involving cryptocurrencies as it could affect financial stability, the Bangko Sentral ng Pilipinas (BSP) said.

BSP Governor Felipe M. Medalla said there should be regulations for cryptocurrency in order to combat money laundering and to protect the investing public.

The point where crypto gets changed into pesos or bank accounts, thats the time where all regulations come in. Whether its crypto or regular banking, the entire world is afraid that cross-border movements of money could be financing things that are quite destructive, Mr. Medalla said at a press briefing following the Financial Stability Board (FSB) Regional Consultative Group for Asia (RCGA) meeting in Mactan, Cebu.

Cryptocurrencies in the Philippines are classified as digital or virtual assets.

Since the Philippines is under the Financial Action Task Forces (FATF) gray list, Mr. Medalla said regulators cannot afford to have more cases of money laundering.

Indeed, our big problem is the Philippines is on the gray list, which has possible consequences, he said.

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Global financial crime watchdog FATF put the country on its list of jurisdictions under increased monitoring for dirty money risks in June 2021. The BSP hopes to exit the gray list by January 2024.

Crypto for the Philippines is not a financial stability issue because it doesnt involve too many people in that aspect, but it is an issue that may call the attention of the government one way or another, he said.

Mr. Medalla noted informal lenders are now closely tied with e-money issuers, taking advantage of how Filipino households tend to have low access to formal lending.

These are potentially great improvements in consumer welfare, we should be open to it, but at the same time, as in any opportunity, there are dangers. And this is where were looking at it as regulators, Mr. Medalla said.

FSB Chair and De Nederlandsche Bank President Klaas Knot said the board will be putting in various forms of investor protection when regulating the crypto assets space.

We have money laundering issues. Whether we like it or not, in some criminal investigations, crypto comes to the fore more often than we wouldve liked in cases like text fraud and also outright trafficking of drugs, money laundering, tax evasions, etc, he said.

If countries are not willing to comply with the standards set by the FSB, Mr. Knot said the jurisdictions will have to face supervisory scrutiny.

If we have individual holdouts, individual countries that are not willing to implement the standards, you will very quickly see all the crypto asset activity that migrate to jurisdictions like that, Mr. Knot said.

Countries are expected to implement a global regulatory framework for crypto assets by 2024 to 2025.

Mr. Knot said they are currently working on high-level recommendations for the global regulatory framework to be submitted during the Group of 20 (G20) meeting in July.

Todays meeting of the RCGA reflects the recognition of the close interconnections within our financial system and also between our economies, and indeed recent developments have once again showed a light on the truly global nature of the financial system, Mr. Knot said.

The full, timely, and consistent implementation of international financial standards remains key to bolstering global financial stability, he added.

Established in 2009, the FSB is a body that monitors and makes recommendations about the global financial system.

In a statement on Wednesday, the FSB said its members discussed how to address the vulnerabilities and enhance the resilience of the nonbank financial intermediation (NBFI) sector in Asia.

Members also shared experiences and developments in regulating crypto assets, NBFIs, and financial markets in their jurisdictions and recognized the need to mitigate the risks that may arise from them.

They acknowledged the FSBs recommendations for the regulation, supervision and oversight of crypto-assets and markets and its recommendations targeted at global stablecoin arrangements, the FSB said.

The FSB RCG Asia is co-chaired by Mr. Medalla and M. Rajeshwar Rao, deputy governor of the Reserve Bank of India.

The RCG Asia comprises financial authorities from Australia, Brunei Darussalam, Cambodia, China, Hong Kong SAR, India, Indonesia, Japan, Korea, Malaysia, New Zealand, Pakistan, the Philippines, Singapore, Sri Lanka, Thailand and Vietnam. K.B. Ta-asan

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BSP to be on guard against cryptocurrency issues - BusinessWorld Online

Amid the ongoing Russian invasion of Ukraine, the U.S. and its private sector partners want to lend a hand to Ukrainian authorities looking to hinder Russian actors using cryptocurrencies to skirt sanctionssomething European authorities have already tried to address.

Today the Internal Revenue Services Criminal Investigations (IRS-CI) unit and blockchain analytics firm Chainalysis kicked off an advanced, in-person blockchain analysis training in Frankfurt, Germany for Ukrainian law enforcement agencies.

IRS-CI Chief Jim Lee told Decrypt and other media outlets on a call Thursday morning that he wants to highlight the importance of partnerships (whether private-public or public-public) and how they are critical to doing business, adding that they are key to unraveling complex financial transactions.

Twenty Ukranian investigators from three different law enforcement agenciesthe National Police, Economic Security Bureau, and the Department of Cyber and Information Security of the Security Serviceare participating in the training to learn how to analyze blockchain data, trace cryptocurrency transactions, and develop operational leads.

This is a step forward in building trust among different agencies and private sector companies. The more successful everyone will be if the public sector allocates the necessary resources said Michael Gronager, co-founder and CEO of blockchain analytics company Chainalysis, the lead private sector partner.

The IRS-CI donated 15 Chainalysis Reactor licenses to Ukrainian authorities for the training.

It is important for us to identify all Russian assets on the territory of Ukraine. We resist the aggressor state not only on the battlefield, but also on the economic front, said Eduard Fedorov, acting director of the Economic Security Bureau of Ukraine in a press release.

According to governmental and private entities, cryptocurrencies are playing both good and bad roles in the conflict.

On one hand, pro-Russian groups are soliciting donations in crypto, with over 100 different groups receiving $5 million over the past year, although this number has been dropping in recent months.

Meanwhile, crypto assets have also been used for good, whether that is direct aid in the war effort or for humanitarian needs. Organizations and individuals in Ukraine have received more than $50 million dollars worth.

Authorities noted on the call that the majority of the transactionsboth good and badare mostly done in Bitcoin and stablecoins, with the latter seeing a significant uptick over the recent months.

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IRS Trains Ukraine Law Enforcement to Track and Trace Russia's Cryptocurrency Moves - Decrypt

The Hong Kong High Court (Court) has, for the first time, confirmed that cryptocurrencies constitute property under Hong Kong law and are capable of being held on trust. The landmark ruling of Re Gatecoin Limited (In Liquidation)i aligns Hong Kong with the position of various other common law jurisdictions, providing legal certainty over the enforceability of transfers or loans of cryptocurrencies, and parties legal rights in the event of fraud, theft or breach of trust involving such assets. The decision is certainly a welcome development for businesses operating in this rapidly developing space.

Gatecoin Limited, a Hong Kong company which had operated a cryptocurrency exchange platform, was wound up by the Court. Its liquidators sought the Courts directions on, among other things, (i) the characterisation of cryptocurrencies and fiat currencies held by Gatecoin (Currencies) and (ii) the allocation of the Currencies to Gatecoins customers. In particular, the Court was asked to determine whether the Currencies should be regarded as being held on trust for any of Gatecoins customers.

The liquidators had identified three different sets of terms and conditions (T&Cs) which were in force at different periods of time: (i) the 2016 T&C, which was signed by Group A customers; (ii) the Trust T&C, which was signed by Group B customers; and (iii) the 2018 T&C, which was signed by Group C customers. The liquidators position was that the Currencies belonging to Group A and Group B customers were held on trust by Gatecoin, whereas Group C customers only had contractual claims against Gatecoin.

In order to establish the existence of a trust, the Court had to first consider whether cryptocurrency constitutes property capable of forming the subject matter of a trust. In its analysis, the Court considered extensively the recent authorities of various common law jurisdictions, including the UK, Singapore, the United States, Canada, the British Virgin Islands, Australia and New Zealand. Noting that the preponderance of jurisprudence recognises the proprietary nature of cryptocurrencies, the Court found it particularly appropriate to apply and follow the reasoning in the Legal Statement on Cryptoassets and Smart Contracts published by the UK Jurisdiction Taskforce in 2019 (2019 Legal Statement)ii and the 2020 New Zealand case of Ruscoe v Cryptopiaiii, which confirm that cryptocurrencies are capable of satisfying the four criteria for property as laid down in the English case of National Provincial Bank v Ainsworthiv:

Under Hong Kong law, property is currently defined under section 3 of the Interpretation and General Clauses Ordinance (Cap. 1) as (a) money, goods, choses in action and land; and (b) obligations, easements and every description of estate, interest and profit, present or future, vested or contingent, arising out of or incident to property as defined in paragraph (a) of this definition. The Court noted that whilst this definition is different from those adopted in other common law jurisdictions, it is an inclusive one and intended to have a wide meaning so as to encompass crypto-assets.

Whilst the Court determined that cryptocurrencies are property and can be held on trust, in the circumstances of the present case, it found that a trust had not been established for the majority of Gatecoins customers. In reaching this conclusion, the Court considered the three certainties test for establishing a trustv:

Notwithstanding the fact that the Currencies were placed into a common pool, the Court found there to be sufficient certainty of subject matter. This is because the customers amounts of Currencies were clearly recorded in the private exchange ledger maintained by Gatecoin (Exchange Ledger), which means claims could be made to a proportionate share of all cryptocurrencies by reference to the Exchange Ledger, despite the lack of segregation.

There is certainty of object as the beneficiaries of the trust and the extent of their claim can be readily ascertained from the Exchange Ledger.

Upon reviewing each set of the T&Cs, the Court concluded that the earlier versions of the T&Cs (i.e. 2016 T&C and Trust T&C) were superseded by the 2018 T&C, on the ground that all of Gatecoins customers were required to acknowledge and accept the 2018 T&C when it came into force in order to continue accessing and using Gatecoins website. Therefore, the question of whether Gatecoin intended to hold the Currencies on trust for its customers should be determined by construing the terms of the 2018 T&C.

The Court found that, insofar as the 2018 T&C is concerned, there was clearly no intention to create any trust for customers. In fact, the 2018 T&C contained express disclaimers of any fiduciary obligations on the part of Gatecoin. Further, all cryptocurrencies were pooled together with other currencies, and Gatecoin was able to use them in any way it saw fit, including for the purpose of carrying on trades in its own right. Gatecoins financial statements also treated the cryptocurrencies as the companys own assets, whilst customer deposits were labelled as liabilities.

However, the Court noted that there may be pre-existing customers who never accessed the platform after the 2018 T&C came into effect (and as such did not consent to its terms). Insofar as such class of customers exists, the Court found that Gatecoin held the Currencies on trust for them, as the Trust T&C (which superseded the 2016 T&C) contained express trust language.

Whilst Hong Kong Courts had previously granted interlocutory proprietary injunctions over digital assets, this is the first time that it expressly confirmed the proprietary nature of cryptocurrency, bringing Hong Kong in line with other key common law jurisdictions whose courts have already ruled on the issue.

As noted in the judgment, recent decisions of courts from various jurisdictions have pointed to a wider common law trend of treating cryptocurrency as a new form of intangible property. For example, in the UK, following the publication of the 2019 Legal Statement, the view that crypto-assets constitute property has been backed by English courts in a series of cases: AA v Persons Unknownvi; Ion Science Limited and Duncan Johns v Persons Unknown, Binance Holdings Limited and Payment Ventures Inc.vii; Zi Wang v Graham Darbyviii. The UK government has also recently announced its plans to regulate cryptocurrencies under its existing financial services regime (see our recent client alert here for more information), which further solidifies the consensus that existing laws and regulations need to be adapted to ensure the recognition and protection of digital assets.

In light of the recent high-profile collapses of some major cryptocurrency exchanges, this decision provides helpful clarity on the legal treatment of cryptocurrencies in Hong Kong, particularly in a winding-up scenario. It also demonstrates Hong Kong Courts willingness to apply existing legal principles with flexibility to novel issues in a time of technological growth and innovation. As Hong Kong pushes to position itself as a global virtual asset hub, disputes surrounding crypto-assets and associated technologies will only become increasingly common. We expect it is only a matter of time before another unprecedented legal issue in this area makes its way to the Hong Kong courts, and we look forward to tracking these exciting developments.

i Re Gatecoin Limited (In Liquidation) [2023] HKCFI 914. The judgment is available at: https://legalref.judiciary.hk/lrs/common/search/search_result_detail_frame.jsp?DIS=151622&QS=%2B%7C%28HCCW%2C18%2F2019%29&TP=JU.

iiSee our previous client alert on the 2019 Legal Statement at: https://www.akingump.com/en/insights/alerts/landmark-legal-statement-on-cryptoassets-and-smart-contracts.

iiiRuscoe v Cryptopia [2020] NZHC 728.

iv National Provincial Bank v Ainsworth [1965] AC 1175.

v Knight v Knight (1840) 49 ER 58.

vi AA v Persons Unknown [2019] EWHC 3556 (Comm).

vii Ion Science Limited and Duncan Johns v Persons Unknown, Binance Holdings Limited and Payment Ventures Inc. (unreported, 21 December 2020). See pages 30 to 33 of our previous client alert for a summary of the decision at: https://www.akingump.com/a/web/nL41KJryDTWGz5UDHMPKxx/3BPtUX/2021-year-in-review-civil-fraud-4875-4720-5645-1.pdf.

viii Zi Wang v Graham Darby [2021] EWHC 3054 (Comm). See pages 30 to 33 of our previous client alert for a summary of the decision at: https://www.akingump.com/a/web/nL41KJryDTWGz5UDHMPKxx/3BPtUX/2021-year-in-review-civil-fraud-4875-4720-5645-1.pdf.

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Hong Kong Court Confirms Cryptocurrency is Property in ... - Akin Gump Strauss Hauer & Feld LLP