Turkey bans crypto assets over illegal transaction fears

This new digital money is mostly used by the country’s tech-savvy younger population, which is seeking to protect its livelihood against Turkey’s recent economic troubles. (AFP/File)
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Updated 19 April 2021

Turkey bans crypto assets over illegal transaction fears

  • The much-criticized move against the digital currency will come into effect on April 30

ANKARA: Turkey’s Central Bank has banned the use of crypto assets in payments as part of the country’s efforts to regulate cryptocurrencies, which have gained huge popularity in recent months.

The government has been closely monitoring cryptocurrencies for some time, alleging that extremists might use them to fund illegal activities or facilitate money laundering.

“Their use in payments may cause irreparable damages for the parties to the transactions, and include elements that may undermine the confidence in methods and instruments used currently in payments,” the bank said.

The new regulation will come into effect by April 30, but the legislation’s announcement lowered the value of Bitcoin by more than 4 percent on Friday.

Besides forbidding crypto  payments for buying goods and services, the regulation also bans transferring money to cryptocurrency platforms via fintech systems. But many investors in Turkey view Bitcoin and other cryptocurrencies as a shelter against inflation, with the lira facing a significant devaluation against foreign currencies due to the country’s financial volatility.

The lira has lost about half of its value since the 2018 currency crisis.

Increasing inflation rates, which reached a six-month high last month of 16 percent, as well as official unemployment rates hitting 13.4 percent are making people turn to cryptocurrency to gain money and compensate their losses with stable assets.

The booming business of cryptocurrencies has replaced Turks’ rush for gold and real estate as a hedge against the struggling lira and rising interest rates. This new digital money is mostly used by the country’s tech savvy younger population, which is seeking to protect its livelihood against Turkey’s recent economic troubles.

HIGHLIGHTS

• Turkey bans crypto payments for buying goods and services.

• The regulation also forbids transferring money to cryptocurrency platforms via fintech systems.

• Many investors in Turkey view Bitcoin and other cryptocurrencies as a shelter against inflation.

The government’s crypto asset ban drew anger from domestic investors. About 100,000 tweets were sent from Turkey-based social media accounts in one day criticizing the legislation.

The country’s main opposition Peoples’ Republican Party (CHP) also criticized the government’s midnight move against cryptocurrency use. 

“Rather than issuing a midnight legislation, you should have decided on such sensitive issues after consulting all relevant parties,” CHP leader Kemal Kilicdaroglu said.

Regulation in the field of cryptocurrencies was not a new debate for Turkey, where the government expected to achieve some political goals from blockchain technology, according to Dr. Mehmet Bedii Kaya, an expert of IT law at Istanbul Bilgi University.

The government, in line with its 11th Development Plan, was set to implement a digital central bank based on blockchain technologies.

“On the other hand, there is a significant number of Turkish citizens who use cryptocurrencies for short and long-term gains,” Kaya told Arab News. “I think that this latest regulation has been prepared with a quick reflex, without considering the potential financial losses it might generate with the wave of resulting misinformation.”

Kaya said that payment institutions were already under the close supervision of the Central Bank. “These fintech institutions, which are active in the cryptocurrency market, are very innovative and dynamic. Therefore the Turkish state considered this dynamism as a risk and source of complexity. However, these key players shouldn’t have been disqualified.”

After Tesla CEO Elon Musk announced it was now possible to buy Tesla vehicles in the US with Bitcoin, an Istanbul-based luxury car distributor called Royal Motors began accepting payments in cryptocurrencies last week.

Crypto trading volumes hit $27 billion between early February to March 24, according to data analyzed by Reuters, while trading gained momentum especially after the Central Bank governor was dismissed by presidential decree and further weakened the lira.

Last week, the Turkish government asked crypto trading platforms to provide it with user information.


Energy majors bid for Qatar LNG project despite lower returns

Updated 14 June 2021

Energy majors bid for Qatar LNG project despite lower returns

  • Qatar plans to grow its LNG output by 40 percent to 110 million tons per annum (mtpa) by 2026

LONDON: Six top western energy firms are vying to partner in the vast expansion of Qatar’s liquefied natural gas output, industry sources said, helping the Gulf state cement its position as the leading LNG producer while several large projects around the world recently stalled.
Exxon Mobil, Royal Dutch Shell, TotalEnergies and ConocoPhillips, which are part of Qatar’s existing LNG production were joined by new entrants Chevron and Italy’s Eni in submitting bids on May 24 for the expansion project, industry sources told Reuters.
The bids show energy giants continue to have appetite for investing in competitive oil and gas projects despite growing government, investor and activist pressure on the sector to tackle greenhouse gas emissions.
Unlike Qatar’s early LNG projects in the 1990s and 2000s when the country relied heavily on international oil companies’ technical expertise and deep pockets, the country’s national oil company Qatar Petroleum (QP) has gone ahead alone with the development of the nearly $30 billion North Field expansion project.
It is, however, seeking to partner with the oil majors in order to share the financial risk of the development and help sell the additional volumes of LNG it will produce.
“I don’t think QP need the IOCs expertise in the upstream or midstream construction of the project but they will be glad to see someone take some LNG volumes off their hands,” a senior source in one of the bidding companies said.
Qatar plans to grow its LNG output by 40 percent to 110 million tons per annum (mtpa) by 2026, strengthening its position as the world leading exporter of the super-chilled fuel.
An Eni spokesperson confirmed the company is participating in the bidding process. QP, Shell, Chevron, TotalEnergies, Conoco declined to comment.
Exxon said it did not comment on market rumors, but added: “We look forward to continuing success in future projects with our partners Qatar Petroleum and the State of Qatar. ExxonMobil affiliates are working with Qatar Petroleum to identify international joint venture opportunities that further enhance the portfolio of both.”
Leading energy companies see natural gas as a key fuel in the world’s efforts to cut carbon emissions and replace the more polluting coal, although the International Energy Agency said in a report last month that investments in new fossil fuel projects should stop immediately in order to meet UN-backed targets aimed at limiting global warming.
Activists say that expansion in natural gas delays a transition to renewable energy that is needed to meet UN-backed targets to battle climate change. The European Union is in the midst of a debate about what role gas should take in the energy transition.
The outlook for global LNG supplies tightened sharply in recent months after Total suspended its $20 billion LNG project in Mozambique due to a surge in violence.
It followed a string of delays of LNG projects in North America as COVID-19 hobbled demand last year.
Global LNG demand has increased every year since 2012 and hit record highs every year since 2015 mostly due to fast-rising demand in Asia. Analysts have said they expect global LNG demand will grow about 3-5 percent each year between 2021 and 2025.
Lower returns
The interest from companies in the Qatari expansion comes despite relatively low returns.
QP offered international bidders returns of around 8 percent to 10 percent on their investment, down from around 15 percent to 20 percent returns Exxon, Total, Shell and Conoco have seen from the early LNG facilities, according to sources in three companies involved.
Qatar project returns have never previously been disclosed.
The six companies and QP declined to comment on the terms of the bids.
“Clearly Qatar has become more competitive,” a source said. “But it remains very low risk from the resource perspective.”
The results of the tender process are not expected to be announced before September, two of the sources said.
In March, QP said it will take full ownership of Qatargas 1 LNG plant when its 25-year contract with international investors including Exxon and TotalEnergies expires next year, in a sign of its growing confidence.
Qatar is also in talks to make Chinese firms partners in the project, sources told Reuters last month.
QP last month hired international banks for a multi-billion dollar debut public bond sale by the end of June, two sources said, to help in part development the Northern Field project.


Lebanon currency hits new low

Updated 14 June 2021

Lebanon currency hits new low

  • Lebanon has been without a fully functioning government for 10 months since the last one stepped down after a deadly port explosion in Beirut last summer

BEIRUT: Lebanon’s currency hit a new low against the dollar on the black market Monday, continuing its freefall in a country gripped by political deadlock, an economic crisis and increasing shortages.
The pound, officially pegged at 1,507 to the US dollar since 1997, was selling for 15,400 to 15,500 to the greenback on the black market, several money changers said.
After hovering around 15,000 to the dollar in mid-March, the unofficial exchange rate dropped to between 12,000 and 13,000 later that month before soaring back up in recent days.
The latest plunge means the pound has lost more than 90 percent of its value on the informal market since October 2019, in what the World Bank has called one of the worst financial crunches worldwide since the mid-19th century.
Lebanon has been without a fully functioning government for 10 months since the last one stepped down after a deadly port explosion in Beirut last summer.
Politicians from all sides have failed to agree on a line-up for a new cabinet even as foreign currency cash reserves plummet, causing fuel, electricity and medicine shortages.
In recent days, frustrated drivers have waited for hours in long car queues outside petrol stations to fill up their tanks.
Pharmacies went on strike on Friday and Saturday in protest at the central bank allegedly failing to provide them with dollars as a preferable exchange rate so they could continue working.
Electricity cuts have increased in length as the state struggles to secure enough fuel to operate power stations.
People earning salaries in Lebanese pounds have seen their purchasing power drastically reduced as they battle to keep up with price hikes.
The country, where more than half the population now live in poverty, is in desperate need of financial aid but the international community has conditioned any such assistance on the formation of a new government to launch sweeping reforms.


The Emirati oil deal that has infuriated Israeli environmentalists

Updated 14 June 2021

The Emirati oil deal that has infuriated Israeli environmentalists

  • The pipeline was first set up as a joint venture between Israel and Iran in 1968 when the two countries were friendly. That partnership collapsed after the 1979 revolution that brought the ayatollahs to power

JERUSALEM: The first cargo ships from Dubai that docked last year in the Mediterranean port of Haifa were met by celebration in Israel. Flags waved. Reporters gathered. The prime minister walked the pier and gave a speech about the fruits of making peace.
There was zero fanfare, however, when oil tankers began arriving at the smaller Israeli port of Eilat on the Red Sea in an arrangement with Emirati partners. Rather than washing machines and cleaning supplies for consumers, the ships unloaded oil to be transferred through a pipeline across Israel to the Mediterranean.
The companies involved say this land bridge is the shortest, most efficient and cost-effective route to transport oil from the Gulf to the West. But the risks to the environment are far too great, say their opponents who are hoping to end the deal.
About a month after Israel normalized ties with the United Arab Emirates last September, Israel’s state-owned Europe-Asia Pipeline Company (EAPC) announced the new collaboration.
The deal was signed in Abu Dhabi with MED-RED Land Bridge, a company with Emirati and Israeli owners. In attendance was then-US Treasury Secretary Steven Mnuchin.
EAPC’s roots are in the Arabian Gulf. It was first set up as a joint venture between Israel and Iran in 1968 when the two countries were friendly. That partnership collapsed after the 1979 revolution that brought the ayatollahs to power.
The Israeli pipeline still operates in both directions but well below capacity in recent years, energy experts say. With the UAE stepping into the role once held by Iran, EAPC hopes to increase quantities by “tens of millions of tons per year.”
The influx of ships set to dock alongside the fragile coral reefs in Eilat and the large amounts of oil to pass through Israel have outraged the country’s biggest environmental advocates.
Fresh in their minds is an offshore oil spill in February that blackened much of Israel’s Mediterranean coast with tar. And in 2014, one of EAPC’s own pipelines ruptured, spilling 5 million liters of crude oil into a desert nature reserve.
“Most of the details (of the deal) are confidential by law. We know just a little bit, but the little bit makes us very anxious,” said Noa Yayon, head of the legal department at the Society for the Protection of Nature.
Eilat’s coral reef is unique in that it has proved to be more resilient to climate change, when many reefs around the globe are dying. It is also a big tourism draw.
But its proximity to the port means that even the smallest leak from one tankers would cause big, possibly irreversible, damage, Yayon said.
“We are of course very happy with the current geopolitical status with the Arab countries in our area, but we don’t think that it has to come with the super-specific risks to our environment,” she said. “We think that we better promote business with these countries based on clean energy and not oil.”
Minister of Environmental Protection Gila Gamliel last Tuesday sent a letter to Israel’s national security adviser saying “the warning lights are already flashing” and demanded the deal be scrapped.
Too much was decided behind closed doors and remains secret, she said.
EAPC has not made public details of the deal.
“From a rate of six tankers a year, we expect an increase to more than 50 tankers a year docking in Eilat,” Gamliel wrote. “The continuation of this deal will be a tragedy for generations, whether from mishaps that may occur or in a wartime scenario.”
Gamliel is being replaced with the swearing in of the country’s new government, and her successor on Monday called the deal a mistake and said the government should oppose it.
EAPC said the new business is part of its routine operations and that it meets the strictest international standards. Plus, the broader geopolitical gains cannot be ignored.
“Israel is expected to benefit greatly from the agreement, which will strengthen the Israeli economy and its international standing, as well as ensure its energy independence and security,” the company said in a statement.
The Society for the Protection of Nature together with other groups have petitioned Israel’s Supreme Court for a temporary order to freeze the deal. Yayon said the state is due to present its official position in coming days.
The Finance Ministry, which oversees EAPC, declined to comment due to the open court case.
A representative of UAE’s National Holding, which owns Petromal, one of the owners of MED-RED Land Bridge, had no immediate comment on the issue.

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US father-son duo admit helping ex-Nissan chief Ghosn flee Japan

Updated 14 June 2021

US father-son duo admit helping ex-Nissan chief Ghosn flee Japan

  • Ghosn was out on bail while awaiting trial on four counts of financial misconduct, which he denies, when he managed to slip past authorities onto a private jet, transit in Turkey and land in Lebanon

TOKYO: An American father-son duo admitted their role in orchestrating former Nissan chief Carlos Ghosn’s audacious escape from Japan as they made their first appearance before a Tokyo court on Monday.
Former special forces operative Michael Taylor, 60, and his 28-year-old son Peter were extradited by US authorities over claims they smuggled Ghosn out of the country in a music equipment case as he awaited trial.
At the Tokyo district court, the pair said they did not contest the facts laid out by prosecutors in an indictment, effectively conceding their role in the saga.
“Is there any mistake in what the prosecutor just read?” the judge asked each man in turn. Both replied no.
Michael Taylor was led in first to the courtroom, with his hands cuffed in front of him. He wore plastic slippers, dark trousers and a white shirt with no tie.
His son was brought in after, with both men wearing facemasks.
The pair face up to three years in prison if convicted of helping Ghosn — currently an international fugitive living in Lebanon, which has no extradition treaty with Japan.
Ghosn was out on bail while awaiting trial on four counts of financial misconduct, which he denies, when he managed to slip past authorities onto a private jet, transit in Turkey and land in Lebanon.
On Monday, prosecutors laid out again the almost cinematic details of the December 2019 escape, including that the Taylors hid Ghosn in a case to slip him past security at an airport.
“You helped him escape,” he said to the two men, who listened to proceedings through a translation earpiece.
Ghosn’s flight was hugely embarrassing for Japanese authorities, with US prosecutors calling it “one of the most brazen and well-orchestrated escape acts in recent history.”
The Taylors fought their extradition to Tokyo, claiming they could face torture-like conditions, and have not commented on their case since arriving in early March.
Local prosecutors declined to comment on their arraignment before the trial, but Japanese media said both men admitted wrongdoing during questioning.
Public broadcaster NHK has said Peter received 144 million yen ($1.3 million) from the Ghosns for their help.
The Asahi Shimbun daily said the pair spent most of the money on preparations for the escape, including the costs of chartering a private jet, claiming that they were not paid for their help.
Ghosn remains at large in Lebanon, where he was questioned last month by French investigators over a series of alleged financial improprieties.
Among the allegations are improper financial interactions with Renault-Nissan’s distributor in Oman, payments by a Dutch subsidiary to consultants and lavish parties organized at the Palace of Versailles.
The questioning took place with his defense team and a Lebanese prosecutor present. Ghosn was heard as a witness as he would need to be in France to be formally indicted.
Others involved in the Ghosn case have faced legal proceedings, including his former aide at Nissan, Greg Kelly, who is also on trial in Tokyo for his alleged role in underreporting the tycoon’s income.
And a Turkish court has sentenced two pilots and another employee of a small private airline to four years and two months in prison for their role in Ghosn’s escape.
Ghosn switched planes in Turkey on his way to Lebanon, and the three Turks were charged with involvement in a conspiracy to smuggle a migrant.
A Lebanese national still at large is also suspected of orchestrating Ghosn’s escape from Japan.


Tesla to accept bitcoin again when greener

Updated 14 June 2021

Tesla to accept bitcoin again when greener

  • Bitcoin are produced by powerful computers that have to solve equations and consume huge amounts of electricity in the process

NEW YORK: Elon Musk, CEO of electric vehicle maker Tesla, said on Sunday that the US company will accept bitcoin payments again when the virtual currency is greener.
The American manufacturer caused a sensation in February when it announced that customers could pay in cryptocurrency, an option that became possible at the end of March.
But then Musk changed his mind, indicating that bitcoin were no longer accepted — in the interest of protecting the environment.
“When there’s confirmation of reasonable (~50 percent) clean energy usage by miners with positive future trend, Tesla will resume allowing Bitcoin transactions,” the billionaire wrote on Twitter Sunday.
Bitcoin are produced by powerful computers that have to solve equations and consume huge amounts of electricity in the process.
The science journal Nature recently published a study showing that China’s bitcoin mines, which power nearly 80 percent of the world’s cryptocurrency trade and run in part from coal-fired power plants, risk jeopardizing the country’s climate goals.
Musk on Sunday reacted to an article raising the possibility that with his tweets, which regularly move the value of bitcoin in one direction or another, he is manipulating market prices for the benefit of his business.
“This is inaccurate,” he said. “Tesla only sold ~10 percent of holdings to confirm BTC could be liquidated easily without moving market.
The US automaker announced in early February that it had invested $ 1.5 billion of its ample cash in bitcoin and has since sold part of it.