Blockchain GS1 Standards Published, Supply Chain Pilots Announced Across Industries
By: Jordan R. Silversmith
Earlier this week, one of the world’s largest automobile manufacturers announced it will begin using blockchain to promote supply chain transparency. According to a press release, the company “is using this technology in purchasing to ensure the traceability of components and raw materials in multi-stage international supply chains.” In other supply chain news, a Swiss luxury watchmaker recently added its first timepiece to a blockchain. Instead of offering a certificate of authenticity, the company will now register each watch on a private blockchain that will follow its provenance from owner to owner.
Everledger, a blockchain startup that digitally tracks the life cycle of diamonds, announced that it will begin using blockchain technology to track rare-earth materials including cobalt and lithium, the two elements essential for batteries. Everledger was one of the first companies to demonstrate the use of blockchain beyond cryptocurrency, when it began creating immutable digital records for diamonds in 2015. A Malaysian startup has similarly begun using blockchain technology to improve traceability – in this case, palm oil. The Malaysian Palm Oil Council (MPOC) and blockchain startup BloomBloc recently announced the development of a blockchain app to trace palm oil through the entirety of the supply chain, from plantation to bottle. The new app follows on the implementation of the mandatory Malaysian Sustainable Palm Oil (MSPO) certification standard.
The American branch of a global business standards not-for-profit, has published a new guideline titled “Applying GS1 Standards for Supply Chain Visibility in Blockchain Applications,” an educational resource that can help industry enable supply chain visibility in blockchain implementations using GS1 Standards. The guideline shows how various GS1 Standards can be used in a blockchain ecosystem to enhance data sharing. The guideline was developed in collaboration with a Cross-Industry Blockchain Discussion Group, which was formed in November 2018 to help companies understand the transformative potential of blockchain in the supply chain and to prepare them for blockchain implementation using GS1 standards.
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Telegram Request Denied, Firms Continue Blockchain Initiatives for Securities Trading
By: Marc D. Powers
In the Securities and Exchange Commission’s (SEC’s) ongoing enforcement proceeding against Telegram, federal Judge Kevin Castel in New York for the second time in a week handed Telegram a significant loss. As previously reported, Judge Castel granted on March 24 the SEC’s request for a preliminary injunction, finding that the “entire scheme” of transactions, beginning with the 2018 sales of Grams and ending with the planned distribution of the Grams after the development of the Telegram Open Network blockchain platform, was an offering of “securities” under the Supreme Court’s Howey test and required registration. Following this ruling, Telegram sought to limit the injunction to U.S. investors, which would have allowed Telegram to distribute Grams to its foreign investors. The court rejected Telegram’s request, finding that the argument should have been raised earlier and that Telegram had not sufficiently demonstrated that the wallets for the tokens would ensure distribution solely to foreign investors.
An international commercial bank has reportedly placed $10 billion of paper-based private placement materials and agreements on the R3 Corda blockchain. While noting the project was not a full endorsement of digital assets and technology, the bank did recognize the “efficiency” of placing the records on the blockchain, calling it a “digital vault.” By allowing “real time access” and review by investors and the issuers, the bank reportedly plans to tokenize the private placements after it digitizes them.
Also, the SEC, in its review of a joint venture involving an affiliate of tZERO for a proposed digital exchange, to be known as BOX Options Exchange, has asked for public comment on new rule proposals by the applicant. Among other comments, the SEC wants feedback on whether the proposed exchange’s operations are consistent with the 1934 Exchange Act. In some preliminary comments, concerns have already been raised, including a comment by a major U.S. stock exchange stating that the underlying blockchain technology on the exchange would be available solely to the owner of the security token on the platform, BOX, placing other exchanges at a competitive disadvantage.
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Tax Agency Seeks Quadriga CX Records, DOJ Cites Crypto Use by Venezuelan Cartel
By: Joanna F. Wasick
Early last week, the court-appointed bankruptcy trustee overseeing the winding up of cryptocurrency exchange QuadrigaCX reported that the Canada Revenue Agency requested an extensive amount of information, including financial statements and other business records, a list of accounts and wallet addresses, and “detailed information” on the fiat and cryptocurrency owed to the exchange’s users. The trustee advised that it will try to comply with the request by copying the bulk of its entire database, which includes users’ personal information, account balances and transaction data. Legal counsel for QuadrigaCX represented that it will not oppose the production; however, members of the creditor’s committee did raise privacy concerns about sharing the information. QuadrigaCX entered into bankruptcy proceedings in 2019; its customers seek recovery of about $190 million that was deposited on the exchange.
Last week, the U.S. Department of Justice (DOJ) charged Nicolás Maduro Moros, the former president of Venezuela, and other top Venezuelan officials with narcoterrorism, corruption, drug trafficking and other related crimes. The indictment alleges that since at least 1999, the defendants operated a drug cartel and used otherwise-legitimate Venezuelan institutions to facilitate the importation of massive amounts of drugs into the United States. A separate superseding indictment also charges Venezuela’s superintendent of cryptocurrency and other defendants with a series of crimes relating to efforts to evade sanctions imposed against Maduro Moros by the Office of Foreign Assets Control (OFAC), an agency of the U.S. Treasury Department. As part of a press release on the proceedings, U.S. government officials stressed that they would rigorously pursue any criminals attempting to “hide behind cryptocurrency to further their illicit criminal activity.”
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