As Reuters reported on Sept. 5, sources familiar with the matter said that Sinochem Energy Technology entered into negotiations with the two companies to examine the development of a blockchain platform for crude oil in July.
A subsidiary of Chinese oil and chemical giant Sinochem Group is reportedly in discussions regarding a blockchain platform with Royal Dutch Shell and Australian financial services firm Macquarie Group.
$14 million blockchain platform
The planned blockchain-based platform is reportedly dubbed Gateway, with a value of 100 million yuan (~$14 million). Sources also revealed that Shell and Macquarie decided to invest in Sinochem Energy Technology itself, further stating:
“Sinochem group has set an internal deadline for the technology firm to bring in strategic investors by the end of September, or the latest October, because the firm is in deep loss.”
Gateway is reportedly going to deploy blockchain technology to reduce trade and settlement inefficiencies, improve transparency and reduce the risk of fraud in the oil industry.
Last month, Shell, BP and other oil firms were freed from a United States-based fraud lawsuit due to a jurisdiction issue. In the lawsuit, a group of oil futures and derivatives traders alleged that the firms engaged in manipulating foreign markets for Brent crude oil.
Blockchain’s benefits for the energy sector
In July, Shell invested in blockchain-based energy startup LO3, which developed a platform for tracking energy with blockchain technology. Shell is planning to convert its investment in LO3’s native XRG tokens, which will be used to incentivize the platform and will be required to access the distributed energy grid.
That same month, Andrew Bruce, CEO of American blockchain startup Data Gumbo, argued that oil industry players can save at least 30% by implementing blockchain applications such as blockchain-based contract execution instead of traditional paper contracts.
Philippine Police Raid Alleged Cryptocurrency Scam, Arrest 277
Philippine police have reportedly raided the offices of an alleged cryptocurrency scam that was targeting investors in China.
According to a Sept. 15 report by local news outlet Inquirer.net, agents from the Bureau of Immigration, the Presidential Anti-Corruption Commission and the National Police’s Integrity Monitoring and Enforcement Group raided the offices of Grapefruit Services Inc. in Pasig City on Sept. 11.
Authorities reportedly received a tip from the Chinese Embassy, which claimed that the firm had already defrauded thousands of investors in mainland China.
Immigration Commissioner Jaime Morente said that the Chinese government cancelled the passports of all the employees, which made them illegal workers in the Philippines. Officials arrested 277 employees of the firm, all of whom are Chinese nationals.
Special economic zone
An unnamed source told Inquirer.net that Grapefruit is an authorized service provider of Golden Millennial Quickpay Inc. Ltd., which operates under a special license from the Cagayan Economic Zone Authority (CEZA).
CEZA – a government-owned corporation – oversees the Cagayan Special Economic Zone and Freeport, which is a special economic area in the north of the country. Also known as the Cagayan Freeport, the zone aims to attract foreign and local investment. The Philippine government began allowing cryptocurrency firms to operate there in April 2018.
Inquirer.net states that the firm was operating outside of the designated zone, and thus had run afoul of Philippine financial regulations.
Special regulations for cryptocurrencies
At the beginning of this year, the Philippine Securities and Exchange Commission (PSEC) postponed the issuance of final regulations for initial coin offerings (ICO), having introduced a draft version in August 2018.
In the draft, the PSEC stated that the tokens emitted during an ICO should be classified as securities, and “therefore, these should be registered with the Commission and necessary disclosures need to be made for the protection of the investing public.”
In February 2019, CEZA introduced a set of rules governing digital asset token offerings. The rules were designed to regulate the cryptocurrency industry and protect investors, affecting such issues as the acquisition of utility and security tokens.