Newsletter

4days ago, 16 May, Thursday
  • 15:56
    Satoshi Nakamoto is/was an individual, and not a group of people, claims Blockstream’s Adam Back

    Consensus 2019 was a lively affair with a host of noted crypto-proponents gracing the event. The conference came days after a major hack hit Binance, while the larger cryptocurrency market continued to make significant gains. The event allowed many popular crypto-proponents to be interviewed. Adam Back, CEO of Blockstream, was one of them. In his interview with Cryptofinder, on the sidelines of Consensus, Back discussed his views on the identity of Satoshi Nakamoto and network decentralization.

    Back stated that he strongly believes that Satoshi Nakamoto is/was an individual, and not a group of people. He supported this claim by pointing out the “continuity in coding and writing style” in Satoshi’s emails and papers. Back added,

    “The original (Bitcoin) version is implemented on Windows, which is also kind of atypical. Most of the applied crypto and networking programmers or consultants tend to work on Linux.”

    Back added that his initial email conversations with Satoshi Nakamoto made the sender seem like an individual “who looked at the (inflation) problem afresh.” Further, Back also discussed the implications of increasing the block size for the crypto industry. He argued that using ‘bandwidth’ for processing transactions can be taxing for developing demographics such as Africa and India. On the other hand, he also said that implementing ‘memory-based processing’ can slow down transaction times as “pointers in data structures tend to use up a lot of space.”

     

    Back suggested the use of satellite bandwidth, which he believes, can help countries with expensive Internet connections and cut processing costs. He added,

    “Another way to scale is to have different layers, which can avoid people with different use cases, cost sensitivity,  and access to bandwidth to compete for the same resource.”

  • 15:37
    Crypto.com Partners with Ledger to Provide Custody Solution

    Cryptocurrency and payments platform Crypto.com announced this Thursday that it has joined forces with Ledger, a big player in security and infrastructure solutions for crypto and blockchain, to provide its institutional-grade custody solution.

    Ledger Vault, the core business unit of Ledger, is a crypto wallet management solution that requires multiple authorisations. Through the partnership, Crypto.com will use Ledger Vault to manage its own funds as well as its clients’ digital assets.

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    Because Ledger Vault has multi-authorisation rules, the custodian of the wallet is able to create, authorise and broadcast transactions to the chain. This can be done without needing multi-signature participants in the same room.

    According to the statement, by doing this, custodianship becomes a process that can be scaled in a fast-moving global market, whilst still being protected against threats to cryptocurrency – such as hacking, human error, etc.

    Commenting on the partnership, Kris Marszalek, Co-Founder and CEO of Crypto.com, said: “We are thrilled to work with Ledger and their institutional grade digital asset custody solution – Ledger Vault. With 100% of Crypto.com client funds always held in cold storage, Ledger Vault allows us to operate the business at scale while maintaining the highest standards of security.”

    Security Remains Top Concern for Crypto

    Security in the cryptocurrency industry has long been one of the biggest threats to the industry. Hacking, in particular, is a threat to both exchanges and traders alike, with even top exchanges such as Binance falling prey to hackers.

    “By using Ledger Vault, Crypto.com will give their customers peace of mind that their assets are fully safe and secure. To support long term growth, the proper infrastructure must be in place. People are taking security and governance very seriously and we’re pleased to support Crypto.com in their mission to provide this to their users,” added Pascal Gauthier, the CEO of Ledger.

  • 14:28
    Ethereum Surges 20%; Will Altcoins Pump When Bitcoin Corrects?

    For the third day in a row crypto markets have hit a new 2019 high in terms of market capitalization. This time Ethereum is in the driving seat as it surges 20 percent in a day. Will the other altcoins follow suit when Bitcoin corrects?

    BTC Correction Inevitable

    Markets always pull back; we have seen it countless times over the past few years. The Bitcoin parabola cannot continue and a correction is inevitable. However, a few hours ago during Asian trading Bitcoin hit another new high for the year at $8,300. This is its highest level for a year aside from a brief spike in July 2018. It has since retraced back to $8,000 where things are holding for the time being.

    Ethereum is getting the FOMO today as it pumps a whopping 20%. From an intraday low of $225 ETH surged to $270 before pulling back slightly. This is the highest price Ethereum has seen since August 2018. Daily volume is currently at record levels of over $15 billion which is higher than it was during the 2017 bull run.

    Comparatively, however, ETH prices are still on the floor and down over 80 percent from its all-time high above $1,400. Bitcoin has now recovered to a 60 percent drop from its peak of $20k in 2017. As traders take profits from Bitcoin’s recent rally they are likely to look towards lower priced altcoins rather than converting back into fiat.

    ETH prices 24 horus – coinmarketcap.com

    Altcoins To The Moon

    This appears to be what is happening at the moment as altcoins start surging, led by Ethereum. Stellar is a train at the moment, surging over 30 percent today to reach an intraday high of $0.157. XLM has not been at these lofty heights since before the big November dump. As a result it is poised to knock Tether off eighth spot in terms of market cap.

    Bitcoin Cash, Litecoin, EOS, Binance Coin, Cardano, Tron, Bitcoin SV and IOTA have all pumped a further 7 percent today as altcoins lift off. Ethereum Classic is shadowing its big brother with a 15 percent surge and NEM has gone to the moon adding 35 percent on the day.

    Managing partner at BlockTower Capital, Ari Paul, is extremely bullish tweeting;

    “In the last bull cycle, crypto got big enough to threaten securities regulators.  In the next bull cycle, it will get big enough to threaten central banks.  Things may get ugly.  Major shifts in power usually don’t happen without a fight.”

    Tyler Winklevoss added to the sentiment with this;

    Bitcoin breaking 8k this time feels lot different than the last time. So much progress has been made since then and it's only the bottom of the first inning

    — Tyler Winklevoss (@tylerwinklevoss) May 16, 2019

    Total market cap for all crypto assets has hit another 2019 high of $264 billion – a level not seen since July 2018.

  • 10:40
    TIOmarkets Appoints Head of Affiliates & Partnerships

    Although still in its pre-launch stage, TIO Markets Ltd (TIOmarkets), a foreign exchange (forex) broker, has managed to secure Eleni Nicolaou as its Head of Affiliates & Partnerships in anticipation for its upcoming official launch.

    Although the Financial Conduct Authority (FCA) regulated broker is yet to open its doors for trading, the company is onboarding recruits to lead the company through its launch and beyond. At the company, Nicolaou is working with the management team to create an “industry-leading partnership program”. The aim of this program is to generate traffic for the brokerage once its services go live.

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    At present, TIOmarkets is in its pre-launch stage and is the FX trading provider of trade.io. At present, the company is offering a 3-month free trading subscription. However, as was highlighted through Finance Magnatesaccording to management, the subscription period will end soon as they are closely approaching their target of onboarding 10,000 clients.

    TIOmarkets Enters FX Industry in Difficult Period

    With the broker planning to launch its operations soon, it would be an understatement to say that it is entering into a market that is more difficult than it was a year ago. Brexit and product intervention measures from ESMA has made the FX and CFD industry tricky to navigate.

    Commenting on the appointment, Terence Tan, Head of Business Development for TIOmarkets, stated that all professional staff have been carefully selected. “We have handpicked all talent that we believe will help with the positioning of our company as an industry leader.”

    According to the statement, Nicolaou specialises in building and maintaining relationships with company partners. This ranges from affiliates to introducing brokers and more. She was raised in Germany.

    Speaking on her new role, Nicolaou said: “TIOmarkets is unlike any other broker I’ve worked for. It’s different. I think the low-cost subscription model will really resonate with traders, and the benefits of this will of course trickle over to our partners, too.”

    “I admire the exec team of TIOmarkets. They have a huge amount of experience behind them and they want to use that knowledge to make a fresh, effective, successful FX brand. The potential for growth is limitless,” she added.

  • 09:18
    Polychain CEO Says Facebook’s Rumored Stablecoin Blockchain Should Be Public

    Polychain Capital CEO Olaf Carlson-Wee thinks Facebook would be smart to build its stablecoinon a public, open blockchain infrastructure. Carlson-Wee delivered his remarks at the Consensus 2019 panel “To the Moon and Back” on May 15.

    Carlson-Wee explained that the blockchain platform he is referring to is one like bitcoin’s, in which the creator relinquishes control over the platform they built. He argues that such an arrangement would be beneficial to the social media giant, saying:

    “I think given all the problems that Facebook has had with policing their platform and things like that, I think that the strategic move for Facebook would actually be to build public infrastructure. And that public infrastructure could be incorporated onto all the Facebook platforms, which of course are proprietary. But that public infrastructure, if they don’t try to own it, I think that’s where they will have the most success.”

    Carlson-Wee notes that an additional benefit would be that by relinquishing control over the platform, they also avoid liability for controversy that takes place on the platform; he compares the situation to the creation of the internet:

    “The people that made the internet aren’t responsible for everything that’s said on the internet.”

    The CEO continued to share a broader vision for cryptocurrencies, in which they are used as a common and accessible store of wealth. He stated:

    “If big technology companies want to put their resources toward building public peer-to-peer crypto infrastructure, I would be ecstatic.”

    As previously reported by Cointelegraph, an anonymous source told Bloomberg that Facebook will roll out its cryptocurrency, purportedly a stablecoin, some time in the third quarter of 2019. Sources at the Wall Street Journal say that Facebook is seeking investments up to $1 billion to fund the upcoming “FB Coin.”

  • 08:48
    Blockchain adoption will depend on project and industry, says IBM Japan’s Tsuyoshi Hirayama

    While numerous non-financial organizations have taken concrete steps to mark their territory in the crypto-ecosystem, the number of organizations joining the domain has skyrocketed in 2019. The latest buzz was created by IBM. Although the tech giant had previously announced its involvement in leveraging blockchain for its future projects, Tsuyoshi Hirayama, Director of Digital Innovation Business Development, IBM Japan, shed light on some recent IBM blockchain developments at the Consensus 2019 conference.

    During the interview, Hirayama addressed his interest in working with IBM Japan’s blockchain initiatives, and attributed it as the only reason to join the company. He also stated that his “Hyperledger background and Amazon Web Services experience” could also help IBM in catalyzing innovation.

     

    When asked about IBM’s position in the current market, Hirayama said,

    “IBM maintains the highest blockchain technology adoption rate and holds the best financial customers.”

    While stating that giants like Microsoft and Oracle are not a competition to IBM in the blockchain space, he added that the inclusion of more companies will only help “users within the overall blockchain community.”

    Hirayama was also questioned about blockchain’s commercial use, to which he answered,

    “It depends on the project and the industry.”

    He also hinted at making blockchain technology available through smart contracts, informing viewers that IBM is leveraging historical data from other industries to implant blockchain-based processes.

  • 06:42
    Crypto Startup Launches Bitcoin Term Deposit Offering 9% Annual Interest

    A Delaware-based cryptocurrency startup called BitLeague has recently launched a Bitcoin term deposit product designed to bring mainstream-like services to the crypto economy and attract new users.

    The move was announced at Consensus 2019 and, according to a press release, the term deposit will offer 9% annual interest, with a lock-in period of 3 to 36 months. Adnan Gilani, the company’s president, was quoted as saying:

    Our mission is to create a more equal, open financial platform, which brings more benefits to users, grows their wealth, and provides more liquidity to the system. The commercial bank only pays about 2% for one year Certificate of Deposit, we offer 9% fixed rate, this is how we add value to our clients.

    The move highlights a new trend in the cryptocurrency space that has been seeing firms launch new products that allow users to earn interest on their cryptocurrency holdings. Crypto lending firm BlockFi, for example, has launched a cryptocurrency deposit accountoffering users over 6% a year in compound interest.

    Nexo, a Switzerland-based startup, has also been offering users ‘instant’ cryptocurrency-backed loans, offering investors up to 6.5% interest on stablecoins. Similarly, cryptocurrency wallet Cobo offers options that let users earn income on their crypto holdings.

    BitLeague itself is set to also launch a zero-commission trading service in 14 states in the United States, with the goal of helping “people to adopt bitcoin, the next generation sound currency for everyone.”

    The firm’s products are notably hitting the market at a time in which bitcoin, the flagship cryptocurrency, is seeing its price surge. According to CryptoCompare data, BTC is now trading over the $8,000 mark, after rising 49% in  the last two weeks.

  • 04:48
    Reserve CEO Predicts Central Banks Will Tokenize, Still Room for Stablecoins

    CEO Nevin Freeman of stablecoin startup Reserve predicts that central banks will tokenize their currency at some point, but stablecoins will likely still have an advantage in offering privacy.

    Freeman delivered his remarks at the Consensus 2019 panel “The End of Volatility? Stablecoins on the Rise” on May 15.

    During the panel, moderator Joel Telpner, a partner at Sullivan & Worcester LLP, asked the speakers why banks could not simply tokenize their national currency and drive fiat-backed stablecoin services out of business.

    Freeman replied that he thinks banks will do this, but will not offer the same privacy of current stablecoin services. He thinks that central banks would want to track transaction history and ownership of the tokenized funds.

    However, he argues that wealthy businesses and people will choose a service that offers privacy in their transactions over another that has the only potential upside of being issued by a central bank.

    In an interview at the conference with Freeman, a Cointelegraph correspondent asked whether stablecoins such as TrueUSD and Paxos are actually anonymous. Freeman responded that when converting from fiat to crypto and vice versa, your identity is checked and verified. All the transactions in token form, however, are pseudo-anonymous.

    Freeman added that Reserve, for its own part, aims to make a “stable bitcoin.” He told a Cointelegraph correspondent:

    “We are trying to create stable bitcoin. These other projects that are fiat-backed… they are very useful but they are legitimate trustworthy versions of tether, they are not stable versions of bitcoin. And the critical piece is that they are missing is that if you want to be a stable version of bitcoin is that everyone can see that the thing is just there, in reality, and can not be shut off no matter what anyone thinks of it.”

    Pseudo-anonymity is the term used to describe the privacy offered by cryptocurrencies such as bitcoin (BTC), since bitcoin balances and transactions are public, even though there is no public identity associated with the addresses involved.

    As previously reported on Cointelegraph, bitcoin developer Pieter Wuille has recently published two proposals for a taproot soft-fork, which aims to provide more privacy for bitcoin users by hiding transaction details via techniques involving the Merkelized Abstract Syntax Tree and the Schnorr signature scheme.

  • 04:29
    2020 Presidential Hopeful Andrew Yang Says Regulators ‘Owe’ Clarity on Rules for Crypto Industry

    Presidential contender Andrew Yang took the stage at Consensus 2019 on Wednesday, facing a friendly (if not slightly boisterous) crowd as he discussed bitcoin, blockchain and his bid for the White House.

    Amid jokes about a possible YangCoin, Yang essentially pitched himself as a sympathetic friend of the crypto community in an appearance that came weeks after his campaign issued a policy statement on digital asset regulation.

    He also opined on the declining influence of traditional media, the threat of climate change, his Freedom Dividend pitch, and current U.S. president Donald Trump (“The opposite of Donald Trump is an Asian candidate who likes math.”)

    As CoinDesk reported in April, Yang promised “clear guidelines in the digital asset world so that businesses and individuals can invest and innovate in the area without fear of a regulatory shift,” a position that he reiterated during his onstage conversation with Coin Center’s Neeraj Agrawal.

    He argued that the current framework in the U.S. is unclear and unfair to people working with the technology, saying:

    “If you’re a builder it’s just ‘look, tell me what the landscape’s going to look like and we’ll figure it out from there’ but no one knows what the landscape will look like.”

    For the record, Yang told CoinDesk after his talk that he doesn’t own any crypto but that he has some funds in a vehicle which has some crypto holdings.

    On regulators’ practice of setting policy through enforcement actions rather than issuing guidance, Yang told CoinDesk:

    “I think it’s unfair to folks and I think it’s a clear emblem of the U.S.’s approach, and [customers] ask ‘what the heck’ … It’s one thing that they [regulators] come down when there’s clear guidelines [but there aren’t in crypto]. So the regulators owe us some degree, owe the community some degree of clarity.”

    Similarly, Yang acknowledged the digital privacy concerns that motivate many crypto users, telling the audience: “I’m sympathetic to members of the community who want to have more of these transactions occur in a non-monitored manner or context.”

    Yang also offered some more light-hearted advice for crypto advocates. “Don’t eat, sleep and breathe [crypto] too much. Every once in a while go on a hike,” drawing laughs and a response from Agrawal: “I guess I should do that.”

    ‘One of the key technologies’

    Looking ahead to his possible occupancy in the White House, Yang called blockchain “one of the key technologies” that he envisions forming part of a next-generation economy, and reiterated that he would be a friend to the industry should he prevail in the 2020 vote (not to mention the crowded Democratic Party primary, which begins in earnest this summer when the official debates begin).

    “The work you’re doing is difficult…but it is the future,” he said. “If I’m in the White House oh boy are we going to have some fun.”

    In the follow-up interview, Yang also highlighted the question of how tokens are classified (whether they’re commodities, securities, or something else), and reckoned that his push for clarity would in part focus on this area specifically.

    Speaking to CoinDesk after the appearance, Agrawal struck a positive note about Yang’s perspectives on the technology and the regulatory hurdles the industry faces.

    “It was remarkable to see a candidate think through the cryptocurrency policy issues as deeply as Andrew Yang has, and I think this bodes well for cryptocurrency leadership,” he said.

  • 04:09
    Study Finds Most Ransomware Solutions Just Pay Out Crypto

    A study by ProPublica found that most ransomware solutions providers have one weird trick for getting rid of hackers – paying them off.

    Ransomware activity is growing weekly according to experts at Coveware . The result? Companies who just want to pay the ransom and move on.

    According to Coveware, ransomware attacks were up in Q1 2019:

    In Q1 of 2019, the average ransom increased by 89% to $12,762, as compared to $6,733 in Q4 of 2018. The ransom increase reflects increased infections of more expensive types of ransomware such as Ryuk, Bitpaymer, and Iencrypt. These types of ransomware are predominantly used in bespoke targeted attacks on larger enterprise targets.

    Once hackers encrypt an infected computer, however, the real question is how to unlock your data. ProPublica found that many data recovery firms simply pay the ransom and then charge a premium for their trouble.

    Proven Data promised to help ransomware victims by unlocking their data with the “latest technology,” according to company emails and former clients. Instead, it obtained decryption tools from cyberattackers by paying ransoms, according to Storfer and an FBI affidavit obtained by ProPublica.

    Another U.S. company, Florida-based MonsterCloud, also professes to use its own data recovery methods but instead pays ransoms, sometimes without informing victims such as local law enforcement agencies, ProPublica has found. The firms are alike in other ways. Both charge victims substantial fees on top of the ransom amounts. They also offer other services, such as sealing breaches to protect against future attacks. Both firms have used aliases for their workers, rather than real names, in communicating with victims.

    Going up

    Ransomware is getting worse.

    After US Attorney General traced and indicted two Iranian hackers for releasing ransomware called SamSam, authorities hoped the prevalence of attacks would fall. Instead, it rose, beating 2018 levels considerably.

    The reason, many believe, is because ransomware is so lucrative. Hackers can launch an attack and then, when the victims discover the hack, they negotiate briefly with companies like MonsterCloud and others to unlock the computers. However, many of these companies offer recovery methods and many security researchers work on free methods this one for the popular WannaCry ransomware.

    Unfortunately, the hacks are getting worse and the software necessary is getting more complex.

    Coveware admits to actually negotiating with scammers. They’ve found it to be one of the simplest methods for getting data back. The concern, however, is that these efforts are inadvertently funding terrorism. Further, they write, it is taking longer to decrypt hacked computers, thanks to new versions of the ransomeware. In Q1 2019, wrote Coveware, the “average downtime increased to 7.3 days, from 6.2 days in Q4 of 2018.”

    Pattern recognition

    Coveware CEO Bill Siegel has found that the average ransomware recovery isn’t really a negotiation with “terrorists” as US Government officials believe. They’ve negotiated a “few hundred” ransomware cases this year and find that each hacker is different and often just frustrated.

    “Our sense based on our study of the industry and experience is that the vast vast majority are relatively normal people that don’t have legal economic prospects that match their technical abilities,” Siegel said. “They also live in parts of the world that are beyond the jurisdiction of Western law enforcement, and are ambivalent about stealing from the West.”

    Their process for talking with the hackers is also quite precise.

    “We study their communications patterns so that we can build up a database of experience. There is a surprisingly small group of threat actors that are active at any given time, so identifying them is relatively straight forward. From there, we have scripts and tactics that we have honed over our experience. We draw on those to develop a negotiation strategy on behalf of our client. We know the hackers based on the profile and patterns they exhaust. We don’t communicate with them outside of representing our clients in a negotiation. All of the data exhaust we create from our cases is provided to law enforcement on a quarterly basis as well.”

    Zohar Pinhasi of MonsterCloud said his company worked hard to use both methods – recovery and ransom.

    The recovery process varies from case to case depending on the scope and nature of the cyber attack. Our methods for achieving data recovery and protection are the product of years of technical experience and expertise and we do not disclose the process to the public or to our customers. That is communicated clearly up front. However, what I can tell you is that we are a cyber security company, not a data recovery company. We have vast knowledge and experience dealing with these criminals, and we spend countless hours staying atop their evolving methods in order to provide our clients with protections against all future attackers, not just the one infiltrating their data at the time they come to us. We offer a money back guarantee to any client if we are unable to recover their data, and to date we have not had a single client report a follow-up attack from the same criminals or any other attacker.

    While sending a few thousand BTC to a strange address might not sit well with many victims, it still looks like the best way to reduce downtimes. After all, it’s the organization’s fault for catching the ransomware bug in the first place. Prevention, as they say, is often better than the cure.

  • 00:25
    Blockchain Project Thundercore Releases Code for ‘Pala’ Consensus Protocol

    Public blockchain platform provider ThunderCore has just released proof-of-concept code for a new consensus protocol, dubbed Pala, on GitHub.

    According to Elaine Shi, chief scientist for ThunderCore, the work represents “a dream consensus protocol.”

    As stated on the newly released GitHub page:

    “Pala is a byzantine fault tolerant consensus protocol…It can achieve low latency and high throughput in a partially synchronous network setting.”

    In layman terms, for blockchains that use a system of block creation and transaction validation known as proof-of-stake (PoS), Pala is way in which to switch out certain bad actors from the network without sacrificing speed or liveness.

    ThunderCore was previously reported by VentureBeat to have raised $50 million in their pursuit of a highly-scalable PoS blockchain. The startup’s public blockchain network, also called ThunderCore, launched this month and is fully compatible with applications running on the world’s second largest blockchain platform, ethereum.

    The ThunderCore blockchain also leverages the ethereum network for chain finality.

    On the newly released ThunderCore blockchain, bad actors in the PoS system are detected and switched out by leveraging finality on the ethereum blockchain. The ethereum blockchain essentially acts as a network for the ThunderCore blockchain to fall back on should consensus be broken.

    However, confirmations of blocks and transactions on the ethereum blockchain takes roughly 10 minutes to generate, according to Shi.

    “When we want to use the slow chain for the fall back detection…we are going to suffer from slow chain confirmation times,” said Shi. “This is what ThunderCore is doing right now.”

    With Pala, ThunderCore is able to rotate out bad actors without touching the “fallback” chain.   Shi emphasized that Pala will be integrated into ThunderCore’s mainnet network once fully tested.

    Shi told CoinDesk:

    “Open-sourcing the Pala protocol is an important milestone for us. It means other projects can use the protocol for other blockchain platforms if they need fast consensus.”

  • 00:11
    World’s Fifth-Largest Electrical Company Is Using an Ethereum Dapp

    One of the world’s largest electrical companies is teaming up with ethereum app iExec on a new test.

    EDF, the fifth largest electrical utility company with a $33 billion market cap, has launched its visual simulator software GPUSPH on iExec, a decentralized application that operates on ethereum mainnet. With this, EDF can test how the program operates on a blockchain rather than a more normal computing environment.

    Specifically, the simulator explores a field called “smoothed particle hydrodynamics” for modeling fluids. It’s technical in nature, but the general idea is that the GPUSPH application is useful for studying all sorts of things, like water dams, for example, or even lava cooling. EDF is trying to determine whether ethereum adds any benefits to the simulator, which typically runs on a GPU.

    As EDF blockchain engineer Gilles Deleuze told CoinDesk:

    “In a wider perspective, […] development of distributed computing is a credible scenario for the future, and blockchain may be a nice lever in this scenario. So, let’s explore it.”

    Originally an extension of a decade-old research project, iExec is one of the longer-running ethereum apps, launched in 2016 to explore the concept of cloud computing on the blockchain. While the world of cloud computing is currently dominated by large companies, like Amazon, they’re trying to decentralize the form of computing on ethereum.

    iExec head of innovation and adoption Jean-Charles Cabelguen argued to CoinDesk that the advantages of using iExec for GPUSPH are many, including clear monitoring of the state and computational power of the app and increased “resilience” of the app, as it’s running on a decentralize network.

    But perhaps one of the most pressing problems ethereum faces is that it doesn’t scale well, at least not yet. But iExec argues they’ve come around with their own scaling solution to at least ensure their dapp is scalable.

    “The heavy computing is done off-chain and does not overwhelm ethereum. Afterward, blockchain is used to reach a consensus on the validity of computation’s results. A hash of this result is stored on the blockchain,” Cabelguen said.

    That said, EDF thinks the technology is worth exploring. Deleuze even added that EDF plans to launch other experiments on iExec in the future, stating:

    “The plan is to continue with other open scientific codes requiring possibly other types of workerpools.”

5days ago, 15 May, Wednesday
7days ago, 13 May, Monday
  • 23:47
    Ethereum Consortium Launches New Enterprise Tools With Input From Microsoft, Intel

    Member-driven blockchain standards organization the Enterprise Ethereum Alliance (EEA) has released two new specifications aiming to accelerate and enhance blockchain implementation for enterprises. The news was shared with Cointelegraph in two press releases on May 13.

    The EEA, which counts over 500 members, describes itself as a “standards organization whose charter is to develop open, blockchain specifications that drive harmonization and interoperability.”

    EEA members include global consulting firm Accenture, banks Santander and JPMorgan Chase, blockchain incubator ConsenSys, Big Four auditor EY, tech giants IntelMicrosoft and IBM and blockchain consortium R3.

    One of today’s newly-released specifications is a set of standard application programming interfaces (APIs) — published as the EEA Off-Chain Trusted Compute Specification V1.0 — which support development work with programs for blockchain transactions that demand privacy, oracle services and compute-intensive workloads.

    The off-chain solution is reportedly designed to enable enterprises to choose the most appropriate trusted compute technology for their use case — supporting methods such as Trusted Execution Environments, Zero-Knowledge Proofs and Trusted Multi-Party-Compute.

    In a statement accompanying the solution’s release, EEA executive director Ron Resnick acknowledged in particular the input of EEA members such as Microsoft, Intel, Banco Santander and ConsenSys.

    He noted that many enterprise blockchain use cases demand complex “privacy, security, throughput, and latency” solutions, and thus that:

    “Temporarily moving some transactions off-chain for computation elsewhere, and then returning a summary to the main chain is a promising method for achieving such requirements.”

    EEA’s parallel new release is the Enterprise Ethereum Client Specification V3, which reportedly simplifies and makes the Client’s permissions systems more flexible.

    To develop the latest specification, the EEA Technical Standards Working Group tackled performance and interoperability issues based upon feedback from users and cross-industry EEA Special Interest Groups.

    It also heeded the implementation experience and customer feedback for BlockApps’, Clearmatics’, ConsenSys’, and JPMorgan Quorum’s enterprise blockchain software.

    As Cointelegraph reported in April, the EEA launched a blockchain-neutral Token Taxonomy Initiative which will seek to define tokens in non-technical and cross-industry terms in a bid to drive enterprise token adoption at scale.

  • 23:36
    BitMart and Genesis Block announce strategic partnership

    itMart, a premier global digital asset trading platform, is pleased to announce a strategic partnership with Genesis Block Group Holdings LLC and its affiliates [“Genesis Block”], a blockchain and digital asset-focused services platform that includes a registered broker-dealer subsidiary, GB Capital Markets, Inc.

    The partnership is the first long-term strategic collaboration between a global leading digital asset trading platform and a US-based digital assets financial services platform and promises to accelerate the connection of the digital asset and real economies to drive long-term enterprise value creation and growth across U.S. and international markets and financial centers.

    BitMart and Genesis Block share a strong belief in the promise of distributed ledger technology and its applications and will work jointly to develop a number of opportunity sets, including primary and secondary markets for digital securities and cross-border markets for digital assets and related products and services.

    Distributed ledger technology infrastructure will be used to create entirely new markets in heretofore illiquid assets, including funds, art, and collectibles, real estate, natural resources.

    World-class primary and secondary market infrastructure for digital securities will provide a number of benefits, including 24/7 markets, lower transactions costs, fractional ownership, automated and quicker settlement Sheldon Xia, Founder and Chief Executive Officer of BitMart, stated, 

    “We are delighted to collaborate with Genesis Block. The partnership will combine the power of BitMart’sAsian and international presence, technology infrastructure and development teams with Genesis Block’s regulated broker-dealer capabilities and unparalleled knowledge of the regulatory aspects of blockchain-driven financial markets. In short, we believe this partnership will accelerate the evolution of a new paradigm in global capital markets.”

    Sam Proctor, Chief Executive Officer of Genesis Block, mentioned,

    “We believe that the future evolution of financial market structure is inextricably linked with the development of international mechanisms that leverage distributed ledger technology.
    We are honored to enter into a partnership with a premier global digital asset trading platform and management team that shares this belief.”

  • 22:39
    Bakkt Sets July Test Date for Bitcoin Futures

    Bitcoin futures exchange Bakkt announced Monday that it is moving forward with plans to launch physically-settled bitcoin futures products.

    In a blog post, Bakkt CEO Kelly Loeffler wrote that Bakkt had “worked closely” with the U.S. Commodity Futures Trading Commission (CFTC), the regulatory agency in charge of overseeing derivatives products in the country, and would be testing its bitcoin futures contracts this summer.

    No launch date was announced, and indeed, Loeffler did not explicitly say that the company’s proposal to self-custody its bitcoin and clear through its parent company’s warehouse (Intercontinental Exchange’s ICE Clear US) had been approved.

    Rather, Bakkt, through ICE, will self-certify its bitcoin futures products, meaning that the CFTC will have to assess whether or not the proposals violate any laws or regulations. If the regulator does not find any issues within a 10-day deadline, the products will move forward.

    This is different from asking the CFTC to explicitly approve a product, which Bakkt was previously said to be doing. CME and Cboe both self-certified their bitcoin futures contracts when they were first announced in 2017.

    However, unlike CME and Cboe’s products, Bakkt will deliver actual bitcoin, rather than the cash equivalent, upon a contract’s expiration.

    An individual familiar with Bakkt’s process, who did not want to be named, told CoinDesk that the company does not have a final launch date set yet, but would be cleared to proceed should the CFTC not raise any objections.

    The individual added:

    “We did self-certify. What the blog post effectively means is we filed with the CFTC, it’s two [contracts], a daily and a monthly and what happens is after 10 days, they can self-certify.”

    ICE published two documents Monday, detailing the listing and self-certification of its two new products.

    In the blog post, Loeffler wrote that “we’ll be working with our customers over the next several weeks to prepare for user acceptance testing (UAT) for futures and custody, which we expect to start in July.”

    “We expect to use UAT to ensure that customers have time to onboard and can test the trading and custody model we’ve built to their satisfaction,” she wrote, adding that future details will be shared in upcoming posts.

    New products

    Still, Loeffler shared some new information about Bakkt’s upcoming products.

    For one thing, the firm will list two different futures contracts: a daily settlement bitcoin future, “which will enable customers to transact in a same-day market,” and a monthly futures contract. This is different from the one-day futures contract that the platform originally announced.

    Specifically, the firm’s new products will be:

    A daily settlement bitcoin future, “which will enable customers to transact in a same-day market;”

    And a monthly futures contract, which is different from the one-day futures contract that the platform originally announced.

    Bakkt will also place $35 million of its own funding into the clearinghouse risk waterfall, which “puts our own ‘skin in the game’ and aligns our interests for market integrity and safety with market participants,” Loeffler wrote.

    In addition, Bakkt plans to use its own qualified custodian to provide custody services, though this remains subject to regulatory approval.

    The individual told CoinDesk that part of this effort revolved around Bakkt’s efforts to secure a trust company license with the New York Department of Financial Services (NYDFS), rather than secure a federal license.

  • 21:40
    Securitize Open-Sources Its Protocol, Partners With tZERO Token Exchange

    Securitize is partnering with one of the blockchain industry’s largest security token exchange companies as it open-sources the code behind its in-house protocol.

    The Digital Securities (DS) protocol repository is available on Github, according to the company, which announced the developments on Monday during CoinDesk’s Consensus 2019 conference.

    Carlos Domingo, Securitize’s co-founder and CEO, said that he believes the technology created by his team has “proven itself in the marketplace.” With the code open-sourced, developers will be able to create dapps on top of the protocol, creating new opportunities for the market, according to Domingo.

    “It was important to us that developers had a viable venue to actually make a difference with their code, instead of developing on something that may never see actual use,” he told CoinDesk.

    Securitize is also launching a new version of its platform, featuring a control panel, which will allow users easier issue and manage the lifecycle of their tokens, the company announced.

    More listings

    The news came on the wheels of another announcement: last week, it became public that Securitize had partnered with tZERO, the tokenization and trading platform for security tokens by the blockchain subsidiary of Overstock. Now tZERO will list some tokens by Securitize on its alternative trading system (ATS).

    Commenting the partnership, the CEO of tZERO Saum Noursalehi told CoinDesk that Securitize seemed a good match as it had been “executing well in the space and providing good quality assets.”

    tZERO became the third secondary trading platform for Securitize, after SharesPostOpenFinance and AirSwap, where it got listed last year. However, for the Overstock’s subsidiary, is will be the first case of outside tokens listed on the platform — now the only one traded on tZERO is its own private equity token tZERO Preferred (issued on ethereum).

  • 21:08
    Microsoft Launches Decentralized Identity Tool on Bitcoin Blockchain

    Microsoft is launching the first decentralized infrastructure implementation by a major tech company that is built directly on the bitcoin blockchain.

    The open source project, called Ion, deals with the underlying mechanics of how networks talk to each other. For example, if you log onto Airbnb using Facebook, a protocol deals with the software that sends the personal information from your social profile to that external service provider. In this case, Ion handles the decentralized identifiers, which control the ability to prove you own the keys to this data.

    Christopher Allen, a crypto veteran and the co-founder of the World Wide Web Consortium (W3C) working group for decentralized identity (DID) solutions, told CoinDesk that Microsoft’s move could impact the entire tech industry.

    “A lot of enterprise infrastructures use Microsoft products,” Allen said. “So if they integrate this into any of their infrastructure products, they’ll have access to DID.”

    Indeed, Yorke Rhodes, a program manager on Microsoft’s blockchain engineering team, told CoinDesk that Microsoft’s team has been working for a year on a key signing and validation software that relies on public networks, like bitcoin or ethereum, yet can handle far greater throughput than the underlying blockchain itself.

    Underscoring the fact that Microsoft was a founding member of the Decentralized Identity Foundation, Rhodes said:

    “There are systems that we have at Microsoft that give you permissions in an enterprise context, a product called Active Directory, that we think need to be able to recognize these DIDs as well.”

    He added such infrastructure products and services related to Azure are among the Microsoft’s most popular offerings. This tiny piece in a giant machine, then, could have far-reaching impacts.

    Meanwhile, an anonymous source with knowledge of Microsoft’s project told CoinDesk that Ion will shift from using bitcoin’s testnet to the bitcoin mainnet later this year. As such, any tech-savvy observer could run a node and contribute to this project.

    Said W3C’s Allen:

    “To have Microsoft say they are not scared of bitcoin, and in fact, it has some very good properties and we are willing to take advantage of those properties, is, I think, a step in the right direction.”

    Stepping back, the difference between a DID under the hood, versus current infrastructure, speaks to the heart of users owning their own content and access. In the example of Facebook and Airbnb, with a DID, Facebook might be able to shut down your social media account but could not revoke access to all the tools that relied on the Facebook ID to log in. Plus, all those personal photos on Facebook would belong to the user, the holder of the DID.

    Yet Facebook, in particular, may not align with Microsoft’s approach.

    Another anonymous source told CoinDesk that although Facebook has been invited to participate in Microsoft’s DID projects and community efforts, so far the social media company has declined and instead continued to follow its historic approach to user data.

    “They’re going in a different direction that’s not as decentralized,” the source said of Facebook.

    Corporate conflicts

    The Wall Street Journal and others have reported that Facebook is looking to build a stablecoin-based payments platform for the social network. Yet Allen said he hasn’t seen any effort from Facebook to support DID standards or community efforts such as W3C, which may create a rift with corporations like Microsoft that are making such standards a core pillar of their business model.

    Rouven Heck, head of DID at ConsenSys and active member of the W3C, told CoinDesk that Facebook is noticeably absent from community discussions across the tech industry about DIDs.

    And although Rhodes said he was not aware of any dealings with Facebook, there was clearly a misalignment between the two company’s goals for using blockchain technology.

    “Facebook is the complete antithesis of consumer privacy,” he said. “Their business model is based on the fact they can monetize data about you.”

    What’s more, U.S. Senate Banking Committee last week wrote a letter to Facebook that voiced concerns about how the social media company will handle financial data with its crypto project, which is codenamed Libra. Few details about Libra have been shared to date outside of press reports.

    In the past, Allen said that Facebook only implemented parts of protocols that enabled data sharing “in a proprietary way that only benefited” Facebook.

    With regards to what approach the social media giant will take to blockchain systems, a Facebook spokesperson told CoinDesk:

    “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”

    Ethical capitalism

    In contrast to the allegations that Facebook is taking a different direction with its project, both ConsenSys and Microsoft are opting to make open source initiatives core pillars of their respective business models.

    “If we can create certain standards it will help the system to build up faster, and that’s good for all of us,” Heck said. “The different products we have are all useful across the space and not built into some proprietary niche.”

    Rhodes agrees with this approach, saying that engaging with the open source ecosystem serves Microsoft’s business objectives. He said the “philosophy of consumer ownership and consumer centricity” are core principles for designing Microsoft’s software going forward.

    Allen said he hopes a sense of public responsibility will continue to be viewed as a competitive advantage – especially as Microsoft Azure goes head-to-head with Amazon Web Services for cloud market share.

    “You could have a service that is in the cloud hosted by Microsoft Azure, but is absolutely secure because everything in it is encrypted with your keys that you control and everything that run under your authority, even though it’s in the cloud,” Allen said.

    In Rhodes’ opinion, current experiments with blockchain technology are comparable to Microsoft releasing Windows 95 in decades past, which helped boost mainstream internet usage through a consumer-oriented operating system.

    “Networking stacks were very tied to logins to existing networks,” Rhodes said of the pre-Windows 95 internet. “Like that, I think [Ion] is pretty significant.”

  • 20:44
    Santander, LeasePlan Testing Nivaura’s Blockchain-Based Floating Rate Bond

    Capital markets startup Nivaura has developed what it’s calling “the first commercially viable floating rate bond using blockchain technology,” and the new instrument is now being tested by banking giant Santander and LeasePlan, the vehicle leasing company

    Announced to coincide with CoinDesk’s Consensus 2019 in New York, Nivaura said other clients working on its floating rate notes (FRNs) include the London Stock Exchange Group (LSEG) and Premfina, a growth-stage premium financing service provider in the insurance industry.

    Avtar Sehra, CEO of Nivaura, told CoinDesk:

    “Some of the key clients that we are working with on the novel aspects around FRNs and tokenized registers are LSEG, Santander and LeasePlan.”

    Nivaura, which recently closed a $20 million seed round led by LSEG, has participated in all five “sandbox” cohorts of the U.K. Financial Conduct Authority. The regulator’s program explores ways to issue digital assets in a compliant fashion and use public blockchains like bitcoin and ethereum as a settlement layer.

    Back in 2016, Nivaura executed a reinsurance instrument which managed a register of noteholders using an on-chain token allocation system (sometime before the popularity of this approach took hold in the ICO explosion), while also creating a “calculation and paying agent” smart contract on ethereum.

    The firm is now applying the same approach to FRNs, using a money market data feed to trigger a calculation. FRNs are calculated according to current market rates, such as the federal funds rate or the London Inter-bank Offered Rate (LIBOR), plus a quoted spread (a typical coupon would look like “3 months USD LIBOR +0.20%”).

    Sehra said the FRN project is a useful extension of the work his team has done to tokenize equity, and for that to then be transferable on a regulated exchange.

    Tokenized hybrids

    “We are extending the simple tokenized equity and bond models to include more interesting hybrid and structured instruments that would be more useful for our clients and partners,” Sehra said. “A natural extension of this is to ensure that the interest is not just simple fixed-rate coupons, but has the flexibility to be a floating value depending on some external reference rate.”

    There are really two parts to tokenized securities, Sehra explained. The first is the token register (or the smart contract) that creates the financial instrument on a blockchain like ethereum, and allows for the transfer of tokens from one party to another, in accordance with a KYC/AML whitelisting process.

    The second is the events manager. Different securities have different types of events – consider bonds and their coupons, redemptions and defaults, or equities and their voting and dividend rights. However, as instruments become more complex the number of events and information required to manage the events becomes more nuanced and complex, too.

    Managing and programming all the complex events into a smart contract is not commercially viable at this time and not well understood from a regulatory perspective for tokenized securities, said Sehra.

    “However, some of the tools to manage the key information flows in the events can be standardized and automated,” he said.

    In the case of FRNs, it involves managing the data feeds, making a calculation, generating payment amounts and then executing those payments through a smart contract on a blockchain.

    Sehra said:

    “Just like the token register model requires whitelisting and accountable end-points to ensure decentralized registers can be used for securities, event management on a blockchain will also require endpoint checks and sign off by trusted parties before capital markets participants will even contemplate using it.”

  • 19:08
    PRESS RELEASE Bitpanda digitizes physical gold and silver

    Vienna-based fintech Bitpanda launches gold and silver trading for its 1 million users. The new product Bitpanda Metals allows users to securely and conveniently invest in gold and silver and benefit from ultra-low fees. The assets are 100% physically backed, fully insured and stored in a high-security vault in Switzerland.

    Users can buy gold and silver to diversify their portfolio

    Gold and silver are asset-backed by physical gold and silver bars

    Transparent and low fees

    Duty-free, 100% insured and safely stored in Switzerland

    Swap gold and silver with any digital asset on Bitpanda

    Set up savings plans for regular invests

    Bitpanda, the Viennese fintech with around 1 million users and more than 100 employees is adding gold and silver as a new asset class to their trading platform. With Bitpanda Metals the company is introducing the user experience and convenience of buying digital assets to the world of precious metals trading.

    Bitpanda partnered with precious metals brokers pro aurum and philoro to securely store the physical underlying of the gold and silver tokens offered by Bitpanda. The physically-backed digitized gold and silver can be traded with the same ease as with other digital assets on the Bitpanda platform. Users can buy small amounts beginning from €1 using a wide variety of payment methods and pay in Euro, Swiss Franc, British Pound or US Dollar.

    Gold can be bought for no fees no matter the amount (after the launch promo for a low fee of just 0,5%) and stored for a transparent and industry-wide unique storage fee of just 0,0125% per week. Gold and silver holdings are 100% insured. Users can sell anytime they see fit, and they are also able to instantly swap any amount of their gold or silver holdings with Bitcoin and any other available digital asset available on Bitpanda.

    Bitpanda CEO Eric Demuth stated,

    “Gold and silver stood the test of time as an asset class, and we are now bringing it to the 21st century. With high transparency, very low fees and the same convenience as for other assets on our platform, we are disrupting the gold trading business. With Bitpanda Metals we allow small investors to buy without having to pay horrendous fees. This is a real game changer.”

     

    To celebrate the launch of Bitpanda Metals, Bitpanda charges no fees on buying gold until 15 June 2019, plus users receive 5 to €200 worth of digitized gold or silver when they invest at least €25 gold or silver on the Bitpanda platform.

  • 18:04
    BitOasis Clears Hurdle in Bid to Launch Regulated Crypto Asset Exchange

    Dubai-based crypto exchange BitOasis is one step closer to launching a regulated custodian and trading platform in United Arab Emirates after receiving an in-principle approval (IPA) from the nation’s financial regulator.

    The bitcoin startup announced Monday that the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) had granted it the IPA, clearing a regulatory hurdle for the company. It now has to satisfy specific requirements for the IPA in order to receive a license before it can begin offering services.

    Still, BitOasis contends that the IPA is still significant, and may help it become the first regulated exchange and custodian for crypto assets in the Middle East.

    The exchange, which described itself as “the largest crypto asset platform and exchange” in the region already, said it had been working with regulators since 2018, with a particular focus on the UAE, though it has interacted with regulators across the region.

    The company said in a press statement:

    “The IPA serves as an important milestone and achievement for the company in its journey as it aims to become the first licensed and regulated crypto asset exchange and custodian in the Middle East, and among a group of few regulated exchanges in the space globally.”

    Ola Doudin, BitOasis’ co-founder and CEO, said in a statement that the exchange plans to relaunch its platform — this time as a regulated entity — over the next year. The startup also plans to add new crypto asset products and try to expand into new markets such as Saudi Arabia.

    “The company will also continue actively working with regulators to accelerate the adoption of crypto assets across the region,” BitOasis said.

    The exchange, which launched in 2015, was the first Middle Eastern crypto platform to raise venture funding, and offers localized services in the region as well as North Africa.

  • 17:46
    Joseph Lubin on Ethereum 2.0: ETH to Become 1,000 Times More Scalable Within 24 Months

    Ethereum (ETH) co-founder Joseph Lubin said that the Ethereum blockchain will become about 1,000 times more scalable in 18 to 24 months. Lubin made his remarks during an interview with Cointelegraph on May 11.

    Lubin specified that the development which will bring such a drastic scalability increase to the ecosystem will be Ethereum 2.0, also called Serenity. He explained that the development is divided into four phases and that eight groups are already developing clients for the new chain. Lubin also promised:

    “In a small number of months, we should have a fully operational testnet and possibly, by the end of this year we’ll have a fully operational phase 0 Ethereum 2.0.”

    Lubin explained that there are multiple ways in which the new chain could be connected with the old one, noting that ether tokens will be able to move from the old chain to the new one and that “there may be bidirectional mechanisms.”

    Lubin also addressed concerns over proof-of-stake (PoS), stating that it has been thoroughly researched to assure its viability before the teams started working on its implementation. He said that new features are being added to the chain to make it compatible with more use cases, citing private transactions as an example.

    As Cointelegraph reported earlier last week, the CEO of crypto analytics firm Messari had predicted that the Ethereum 2.0 transition will not take place until 2021.

    Preston Van Loon, co-founder of sharding development firm Prysmatic Labs, also announced last week that an Ethereum 2.0 testnet beacon blockchain is now live.

  • 16:34
    ICE Pushes for Bakkt Bitcoin Custody License — CFTC Approval Imminent?

    The Intercontinental Exchange (ICE) is reportedly taking steps to ensure approval from the United States Commodity Futures Trading Commission (CFTC) for its bitcoin futures contracts platform — Bakkt. ICE, the operator of the New York Stock Exchange (NYSE), recently acquired a cryptocurrency custodial service and are mulling plans to register Bakkt as a licensed trust in the state of New York.

    If successful, these latest moves would see Bakkt become a registered bitcoin (BTC) custody platform. Recent reports also indicate that the company is in partnership with Bank of New York (BNY) Mellon for the storage of cryptocurrency security keys.

    DACC acquisition and bitcoin custody plans

    As reported by Cointelegraph on Monday, April 29, 2018, Bakkt’s parent company, ICE, acquiredDigital Asset Custody Company (DACC) — a cryptocurrency custodial platform. Adam White, chief operating officer of Bakkt, said the acquisition was an important cog in the wheel of the company’s plans to launch its physically backed bitcoin futures contracts.

    DACC offers native support for 13 blockchains, as well as more than 100 assets. According to the announcement, the DACC CEO and other team members will be assimilated into the Bakkt operational structure.

    The DACC purchase is the second such acquisition by Bakkt. Back in January 2019, the ICE subsidiary acquired back office assets belonging to the Rosenthal Collins Group (RCG) — an independent futures commissions merchant.

    Announcing the DACC acquisition via Bakkt’s Medium account, White explained:

    “DACC shares our security-first mindset and brings extensive experience offering secure, scalable custody solutions to institutional clients. The team’s experience integrating multiple blockchains and operating cutting-edge consensus mechanisms is a valuable addition to our team and future product line.”

    By acquiring DACC, it appears Bakkt is pushing even further with its goal of becoming the foremost institutional-grade cryptocurrency platform far beyond offering physically backed bitcoin futures. The purchase sees the ICE subsidiary positioning itself for cryptocurrency custodial status.

    Many commentators in the industry have consistently identified the emergence of trusted cryptocurrency custodial platforms as an important requirement for a more broad-based institutional adoption of the asset class. Cryptocurrency companies like Coinbase and Goldman Sachs-backed Circle have launched custody platforms for digital assets.

    Bakkt’s DACC purchase is part of a grander ambition to become a certified cryptocurrency custodian. ICE is reportedly looking to have the company registered as a trust in the state of New York.

    If successful, Bakkt would have the legal authority to act as a qualified custodian for bitcoin and other digital assets. Such a move, the company hopes, would smoothen the CFTC approval process.

    As part of its plan to offer robust cryptocurrency custody solutions, Bakkt is partnering with BNY Mellon to establish private key storage in multiple geographic locations. Back in 2018, the global banking behemoth announced plans to begin offering cryptocurrency custodial services.

    Warehousing vs. physical custody

    However, the change from “warehousing” digital assets to physical custody brings up questions about whether Bakkt is employing a change in its strategy. In response, Loeffler speaking to Fortune, said:

    “There is no pivot. From the ground up what ICE has been building for two years is the safest version of a custody solution for digital assets.”

    Loeffler’s comments aside, the original Bakkt application filing shows the company offering physically settled bitcoin futures contract with the physical delivery carried out via “warehousing,” as opposed to physical storage of the underlying asset.

    On the technical side, Bakkt’s approach to bitcoin futures bodes well from a price discovery standpoint but runs into issues when it concerns regulations. With Bakkt offering bitcoin futures contracts settled not in cash like CBOE or CME but in the underlying asset, there seem to be issues with balancing the various regulatory hurdles that need to be surmounted.

    The typical regulatory paradigm for derivatives trading in the U.S. involves a two-pronged approach of federal and state laws. The CFTC oversees exchange entities, clearing houses and the commodity being traded, while state regulators are in charge of the institutions that have custody of the underlying asset or other financial instruments.

    Thus, within this bifurcated regulatory paradigm, Bakkt’s plan of warehousing bitcoin via its parent company’s clearing house runs into a few regulatory snaps, chief of which is the fact that ICE isn’t a bank. The usual state-regulated custodian as recognized by the 1936 Commodity Exchange Act is a registered trust or a bank.

    Section 5b, clauses vi and vii of the Commodity Exchange Act: Settlement Procedures states:

    “(vi) Regarding physical settlement, establish rules that clearly state each obligation of the derivatives clearing organizations with respect to physical deliveries; and (vii) ensure that each risk arising from an obligation described in clause (vi) is identified and managed.”

    Usually, when such a regulatory gray area emerges, an agreement could be reached to grant an exemption, allowing Bakkt to use ICE’s clearing house infrastructure for its bitcoin contract. However, there is a major hindrance that could theoretically stand in the way of such an arrangement.

    To understand this hindrance, it is important to briefly describe how clearing houses work. As third-party intermediaries, clearing houses stand in the gap between buyer and seller to ensure the completion of the derivatives transaction, while keeping both parties in line with their respective part in the deal.

    The various constituent firms of the clearing house divvy up the risk involved in the transaction in a process called “risk mutualization.” In this arrangement if “constituent A” of the “XYZ clearing house” were to hold bitcoin, the other member firms would be open to the mutualized risk of BTC price fluctuation.

    There is a plausible scenario in which constituent firms of the ICE clearing house might not be open to one of its members holding BTC as part of the settlement process for Bakkt’s bitcoin futures contracts. A significant swing in the price of bitcoin during the transaction process could see these members firms incur negative interest rates on their own “custodied" commodity futures.

    Getting over the CFTC approval finish line

    Originally earmarked for launch in December 2018, concerns over proper customer onboarding and warehousing for the bitcoin futures contracts caused the plans to be shifted to 2019. ICE released a press statement in November 2018 announcing the shifting of the launch date to January 2019.

    However, Bakkt failed to obtain the CFTC approval, which led to another postponement. According to reports, the major concern for the U.S. regulator was the company’s plan to settle bitcoin futures contracts via the ICE Clear US (ICUS) — a CFTC-regulated exchange and clearing house.

    Recently, the CFTC has increased its oversight on clearing houses as part of its efforts to protect investors in the derivatives market.

    On Wednesday, May 1, 2019, CFTC Chairman J. Christopher Giancarlo, testifying before the House Committee on Agriculture Subcommittee on Commodity Exchanges, Energy and Credit, said:

    “In addition, examinations of clearinghouses help the Commission identify issues that may affect a clearinghouse’s ability to control and monitor its risks. These are among the most important examinations that the Commission conducts, as clearinghouses have become critical single points of risk in the global financial system. Furthermore, the number of clearinghouses, the scope, and complexity of the examination issues and the importance of these examinations to overall financial stability are all increasing.”

    Given the novel nature of cryptocurrencies as an asset class, the CFTC likely feels that such plans fall into a gray area from a regulatory standpoint. Thus, the commission has been consistent in its insistence that Bakkt develop a more robust infrastructure for holding bitcoin and settling bitcoin futures contracts.

    While not directly referencing Bakkt or ICE, the CFTC chairman also commented about cryptocurrency-related companies applying for licenses to operate clearing houses. Speaking on the matter, the CFTC chair declared:

    “In addition to U.S. clearinghouses, the Commission has six registered clearinghouses located overseas and exempted four foreign clearinghouses. The Commission anticipates new applications for clearinghouse registration resulting from the explosion of interest in cryptocurrencies; an area in which protection of the cryptocurrencies will be one of the highest risks.”

    While stating the commission’s commitment to upholding robust regulatory standards, Chairman Giancarlo reiterated the CFTC’s aim of promoting innovation. The CFTC chairman, did, however, admit that regulators face numerous challenges in trying to adapt decades-old laws to novel digital asset classes.

    Cointelegraph reached out to both Bakkt and the CFTC for comments on the matter. Damon Leavell, the senior director of communications and marketing at ICE Americas, told Cointelegraph that the Bakkt team remains focused on building the business but declined to provide further comments. The CFTC has yet to provide any response to Cointelegraph’s request for comments.

    Despite the absence of official comments from both Bakkt and the CFTC, it appears the company’s initial custody plans have played a major part in the delays and postponements. Given the recent announcements and acquisitions, it appears Bakkt is trying to rectify these issues by pushing for self-certification as a cryptocurrency custodian.

    Bakkt will launch bitcoin futures product in July 2019

    In a blog post published on Monday (May 13, 2019), Loeffler announced that Bakkt is moving forward with the launch of the bitcoin futures contract in July 2019. According to Loeffler, following continued consultations between the company and the CFTC, Bakkt plans to begin user acceptance testing (UAT) for its offerings by the middle of the year.

    The announcement still confirmed Bakkt’s plans of pursuing self-custody approval while implementing settlements via ICUS. However, there was no mention of any green light from the CFTC to that effect.

    Bakkt did not give a definite date for when the UAT will begin, but an excerpt from the announcement reads:

    “We’ll provide more details in upcoming posts, but we expect to use UAT to ensure that customers have time to onboard and can test the trading and custody model we’ve built to their satisfaction.”

    The Bakkt CEO did, however, provide some clarity on the structure of Bakkt’s proposed bitcoin futures contracts. The company plans to offer both daily and monthly physically settled BTC futures contracts.

    On Monday, ICE submitted two separate filings with the CFTC that contained the listing and certification details for both derivative offerings. Loeffler also announced that Bakkt would be putting up $35 million of its own money as a hedge against any clearing house risk.

  • 09:11
    Ethereum’s Reddit Moderators Resign Amid Controversy

    Taylor Monahan, the CEO of crypto wallet startup MyCrypto, has been moderator for the ethereum subreddit channel since 2016.

    That year, the ethereum Reddit channel was just breaking over the 10,000 subscribers mark, according to SubRedditStats. Today, the same channel boasts over 400,000 subscribers and is ranked within the top 600 most popular channels on Reddit.

    However, what may have started as a relatively low-commitment and low-visibility responsibility became a flash point of controversy in the ethereum community (though tensions have died down in recent days).

    “Back then, there weren’t any guidelines or rules.” Monahan told CoinDesk. “We [the moderators] were all cut from the same cloth. We all had the same natural philosophy about what we should and shouldn’t do…We were pretty light-handed and mostly just removed scams and spams and stuff.”

    Those duties include: approving posts that were incorrectly removed by the automoderator, removing posts that break the subreddit’s stated rules, bringing posts that require subjective decision-making to the attention of the entire moderation team, and other responsibilities that, in sum, seek to halt the spread of spammy or scammy content.

    But the nature of the gig has changed, according to Monahan.

    “One of the biggest differences between the early days and now is that in the early days we really did look at this as an administrative task…The larger community doesn’t look at it like that and that’s where I think the disagreement and the anger and the yelling came from,” said Monahan to CoinDesk.

    The anger and the yelling Monahan refers to has been explicitly targeted at former ethereum core developer Afri Schoedon and director of the Web3Foundation Ryan Zurrer. As a result of community requests for their removal as moderators, both individuals in recent weeks have resigned from the role.

    Most recently, Nick Johnson – developer for ethereum domain service ENS – also resigned, quoting a lack of time to “meaningfully contribute” and “an unhealthy streak of paranoia, conspiracy mongering and insularity” on the subreddit.

    The remaining ten moderators of the ethereum subreddit have voiced varying degrees of concern about their role given that their responsibilities on the social media forum are now more heavily scrutinized by the public.

    “The more people are on the sub, the higher the chance is one of your actions does not resonate well and in the worst case resonates so badly that the result is a full blown shit storm,” ethereum Reddit moderator “Ligi” told CoinDesk.

    A way forward?

    Internet communities are rarely immune from controversy, and ethereum’s Reddit-centric users are no exception.

    And in cases where a situation intensifies and a moderator’s role is called into question, Monahan maintains that the best course of action is a self-resignation approach, as has been previously seen.

    “As a group of moderators, we don’t want to ever hold a vote to cast another moderator out. That’s just terrible.” Monahan told CoinDesk. “If there is a large amount of drama surrounding a certain mod or if there is a call for that mod to leave, instead of coming up with a mechanism where everyone votes, it would be on that moderator to remove themselves and step down.”

    For the most part, this is exactly how the most recent bout of controversy over subreddit moderation in the ethereum community has been diffused.

    Earlier this month a tweet by Ameen Soleimani, the CEO of adult entertainment blockchain platform Spankchain, accused Schoedon of working on a competitor platform to ethereum known as Dothereum.

    “I can’t actually prove that he wrote the code yet because it isn’t public, but I have heard from credible sources that he is contributing,” tweeted Soleimani. “There’s nothing wrong with anyone working on whatever they want…but we should also realize that ethereum defectors are highly incentivised to try and divide our community.”

    The situation was further enflamed by user “McDongger” who called for the removal of Schoedon as a result of his engagement with other blockchain projects. Zurrer faced similar resignation calls for his involvement in creating the blockchain interoperability platform that Dothereum is built on.

    In his resignation post, Zurrer put forward his belief that “the line between ‘working on ethereum’ and working on other things will blur as we move forward.”

    “However, in the interest of focusing the conversation around the technology, let’s have some other community members take a turn at mod-ing so that this isn’t a debate topic,” he went on to write.

    Additionally, Monahan has also offered up a 3,000 word document codifying  expectations moving forward for both users and moderators on the subreddit. As stated in the post, its aim is to “provide transparency into the role of /r/ethereum moderators and define what is expected of those moderators.”

    “One way to prevent conflict now or in the future is by making sure everyone is all on the same page and communicates and is transparent and the expectations are aligned,” Monahan told CoinDesk, adding:

    “If you can do that then I think most the issues with not just moderation but just in general can be resolved.”

  • 06:33
    Bitcoin [BTC] is a ‘speculative vehicle for gambling’, says broker Peter Schiff

    The recent meteoric sprint in Bitcoin’s valuation has ignited debate among analysts, with opinions pouring in from both crypto enthusiasts as well as critics. One such critic was the CEO of Euro Pacific Capital, Peter Schiff, who has always been critical of Bitcoin even during the coin’s bull run. The recent Bitcoin storm failed to impress the critic asthe  CEO claimed that the cryptocurrency was just a “speculative vehicle for gambling” in a recent Keiser Report’s talk session.

    The veteran stockbroker said that he did not believe that Bitcoin had anything in common with gold and claimed that Bitcoin was a “fool’s gold”, despite admitting that the cryptocurrency has few similar “monetary properties” to that of the gold. Schiff added,

     

    “I mean it pretends to be gold.”

    He further said that Bitcoin had no intrinsic value other than what people were willing to buy it for, because “they think they can sell to somebody else at a high price”. He went on to rant about Bitcoin being a Ponzi scheme.

    The CEO also criticized the new Greyscale’s #DropGold commercial, which called digital currencies like the Bitcoin a future.

    The financial commentator is of the opinion that unlike gold, Bitcoin does not have any utility. The only use case for the cryptocurrency is in theory as a speculative “trading vehicle” for gambling. He further claimed that BTC, as a medium of exchange, is crippled with the major drawbacks. According to Schiff, BTC is expensive and cumbersome.

1week ago, 12 May, Sunday
  • 23:51
    Codename ‘TRUEngine’: GE Aviation, Microsoft Reveal Aircraft Parts Blockchain

    GE Aviation, which supplies jet engines to about 60 percent of the global airline industry, has built a supply chain track-and-trace blockchain with the help of Microsoft Azure.  

    GE Aviation Digital Group aims to share the blockchain, a self-built derivative of ethereum, across an industry-wide consortium of partners. The ledger’s use case, which is about monitoring and collating data tied to the manufacture and life cycle of critical aircraft engine parts, could scarcely be more pertinent given the recent travails of Boeing.  

    David Havera, blockchain CTO of the GE Aviation Digital Group told CoinDesk:

    “Our vision is being able to trace parts as they are manufactured and the engine when it’s shipped. Then how that engine performs in the field, when to repair it and then re-enter it into the field.”

    While GE Aviation sells aircraft engines to commercial airlines and the military, GE Aviation Digital Group is a business unit within that which employs some 700 staff globally and sells software externally to the industry. As well as blockchain, the group turns out a range of 3D printing, IoT and data science solutions.

    Havara said his team had been working for more than two years with partners like MTU Maintenance to build the blockchain, a permissioned fork of ethereum.

    “What we are calling it, kind of internally, is TRUEngine,” said Havera.

    Having a blockchain will structure data that’s critical to this ecosystem in a single format and bring it to users’ fingertips; typically the process of data analysis can involve threading back through multiple vendors and ERP systems, noted Havera, adding:  

    “If you think about it, a quality event in the aircraft engine industry is catastrophic. And to research that takes months of manual time. Driving efficiencies, accountability and visibility into the process of making an engine will make us all safer.”

    Mike Walker, the senior director of applied innovation and digital transformation at Microsoft, likened the ledger to a “tapestry.”

    He said it has had the effect of “stitching together [GE Aviation’s] entire supply chain into one view – so you’ve got a full understanding of all the partners; you’ve got one ecosystem repository instead of hundreds, if not thousands.”

    Blockchain boneyard

    Aircraft engines are liquid assets: over a five-year period, some 60 percent of them change hands, Havera said, making documentation and certifications important.

    Part of the process involves customers like Delta or British Airways, for example, maintaining flight history records of how many cycles they have flown on each part, data which are then returned to GE Aviation so that the appropriate parts are replaced in a timely manner. This has led to a paper-based conundrum, said Havera.

    “We can’t sell those used parts back into the open market without the proper paperwork,” he said. “Which is really a crisis in the industry at the moment. At our warehouse facility in Texas, there are tens of millions worth of dollars of inventory orphaned, because over the last 20 years we didn’t have a digital solution to get that paperwork to sell those parts back into the market.”

    Walker of Microsoft added:

    “So what we have done brings cost optimization and significant safety improvement, but now we are exposing a new business model. We are creating a profit center for what I lovingly referred to as ‘the boneyard’ in Texas, where essentially they put all these parts where they don’t have the GE Aviation genuine paperwork – and you can do that for all the other boneyards out there, too.”

    Although he could not mention the names of the industry players who have been invited to join the TRUEngine consortium at this time, Havera said:   

    “We are targeting companies who have already bought our engines – so it could be Delta or Southwest or BA – and they have a maintenance contract with us. We have a kind of ‘razor and blades’ business model where we sell you the engine and then you will sign a maintenance agreement to be TRUEngine-certified and we will maintain that. So, we are rolling this out to our maintenance agreement base.”

    Walker defined the blockchain as “a production pilot” using live data and business processes with real customers. “So we have a controlled rollout, a trickle effect,” he said. “We will have three or four airlines and then another trickle out to reach five or six.”

    Havera said the pricing model for the service has not yet been formalized but added:

    “We are ready to sell this service. We are actively engaging with customers now and more airlines are asking about it every day.”

  • 23:44
    Bitmain: Jihan Wu rumored to have established FinTech platform Matrix with no inclusion of Bitcoin Cash

    Jihan Wu, the former CEO of Bitcoin [BTC] mining equipment manufacturer Bitmain and massive Bitcoin Cash [BCH] proponent has decided to call it quits with the crypto-camps, opting to make his way into the institutional fray. In a stark turn of events, Wu has reportedly established a FinTech start-up Matrix that will veer away from the retail space.

    BTCKING555, a popular figure within the online cryptocurrency community tweeted that they received a “pitch deck” from an “insider” for the aforementioned start-up. The tweet detailed that Matrix, its touted name, would cater specifically to institutions; this follows Wu’s ousting from Bitmain’s upper echelons, which occurred earlier this year.

     

    The tweet read:

    Source: Twitter

    The latter half of BTCKING555’s tweet references another one of the Twitter handle’s accusations against Bitmain. Back in March 2019, the handle stated that Wu “duped” the mining giant’s “Asian investors” amounting to “$12-$14 bn” on the basis of a “promise of IPO”.

    Furthermore, the thread continued stating:

     

    Source: Twitter

    BTCKING555 added that this warning was mentioned earlier in August 2018, with the handle pleading with investors not to pledge their funds with Bitmain. Citing unconfirmed sources, the handle also added that a “class action” was “in works in Hong Kong”.

    In light of Wu backing Bitcoin Cash and Roger Ver, the CEO of Bitcoin.com and ardent BCH proponent, BTCKING555 finds it curious that BCH was not mentioned in “the deck”.

    The handle added:

     

    Source: Twitter

    This follows the January exodus of Jihan Wu from the position of CEO of Bitmain following his siding with Bitcoin Cash, which proved to be fatal for the company. When the BCH hardfork ensued in November 2018, the poor performance led to Wu being demoted from director to supervisor with further speculation that Wu and Ketuan Zhan, another co-founder would be removed in December 2018.

    Jihan Wu’s Matrix news follows the failed prospects of the Bitmain IPO by the hands of the Hong Kong Stock Exchange (HKEx). Bitmain’s IPO with HKEx surpassed its six-month expiration date in late-March, based on the exchange’s listing rules citing lack of confirmed reports of a Committee hearing.

    BTCKING555 also added the below picture:

    Source: Twitter

2weeks ago, 9 May, Thursday
2weeks ago, 8 May, Wednesday
2weeks ago, 7 May, Tuesday
2weeks ago, 6 May, Monday
  • 22:46
    Single Address Behind More Than 50% of Bitcoin Cash Transactions: Report

    A single address has been responsible for more than half of the bitcoin cash (BCH) transactions in the past month, according to a tweet by @IamNomad on May 5.

    According to the Bitcoin Cash Block Explorer, the mystery account has made more than 587,000 transactions since it became operational on April 8 of this year.

    Many of the transactions are for fractional amounts of BCH and they are made with regularity, with three to four new transactions emerging per second.

    Overall, the address has received $22,763.06 (80.981 BCH) at press time and has sent $21,546 (76.654 BCH), leaving it with a balance of $1,216.36 (4.327 BCH).

    Over this period of the account’s creation to press time, the whole bitcoin cash blockchain has processed 1.17 million transactions — about half coming from the aforementioned wallet. The frequency of transactions could suggest that someone is attempting to drive up the number of transactions to make the network look a lot busier than it actually is, as one commentator responded.

    Another theory is that the miniscule transactions are being performed as a test, potentially for a game, with developers taking advantage of BCH’s low fees.

    Bitcoin cash was one of the top five performing cryptocurrencies of the past week,according to a Cointelegraph analysis.

    A hard fork of the altcoin is scheduled for May 15, with a scaling and privacy code change being enforced to improve its privacy and scalability.

    One BCH is worth $287 at press time.

  • 19:20
    Bitcoin Risks Pullback After Rejections at Key 2018 Price Hurdle

    View

    The June 2018 low of $5,780 is proving a tough nut to crack, as expected. BTC has failed to close above that level for three days in a row, indicating a price pullback may be needed to fuel a sustained move to $6,000.

    BTC looks to be creating a double-top bearish reversal pattern with neckline support at $5,510 on the 4-hour chart. A break lower could yield re-test of the 30-day MA, currently at $5,294.

    A strong bounce from the 30-day MA could fuel a sustained rise to $6,000. That looks likely as the long-duration charts are biased bullish.

    A UTC close below the 30-day MA would shift risk in favor of a deeper drop below $5,000.

    Bitcoin (BTC) could be in for a price pullback, having faced rejection at key price hurdle for three consecutive days.

    The cryptocurrency market leader jumped above the April 23 high of $5,627 on Friday, bolstering both the short- and long-term technical setups.

    However, despite the odds stacked in favor of a quick rally toward $6,000, the cryptocurrency failed to find acceptance above the June 2018 bottom of $5,780 over the weekend, according to Bitstamp data.

    For instance, BTC clocked highs of $5,796 and $5,846 on Friday and Saturday, respectively, but closed below $5,780 on both days. Similar price action unfolded on Sunday, with BTC hitting a high of $5,782 before ending the day at $5,709.

    It is worth noting that $5,780 was expected to offer stiff resistance. The level is important because BTC’s sell-off from May 2018 highs near $10,000 run out of steam at $5,780 on June 24. Subsequently, a bounce from that level was followed by an over 40 percent price rise to $8,500 by July 24.

    Bitcoin’s recent failures to cross that threshold suggest a pullback and a bounce from the historically strong support level may be needed to recharge the engines for a sustained rise to $6,000.

    The case for a price pullback would further strengthen if President Trump’s re-escalation of US-China trade tensions and the resulting slide in equities ends up sending gold higher. This is because the inverse relationship between BTC and gold has recently been its strongest in over 12 months.

    So far, however, gold has barely benefited from the flight to safety. The safe haven asset is currently trading at $1,283 per ounce, representing a mere 0.17 percent gain on the day. That’s opposed to futures on the Dow Jones Industrial Average, which is down close to 500 points at press time.

    As of writing, BTC is changing hands at $$5,617 on Bitstamp – a 1.48 percent drop on a 24-hour basis.

    Daily chart

    BTC is currently reporting losses below the former resistance-turned-support of $5,627 (April 23 high), having failed to close (UTC) above the June 2018 bottom of $5,780 for the third straight day on Sunday.

    The relative strength index (RSI), which had invalidated a bearish divergence with a move above the falling trendline on Friday, has ended up creating another bearish lower high as opposed to higher high on price.

    As a result, a pullback to the historically strong 30-day moving average (MA) support, currently at $5,294, cannot be ruled out.

    4-hour chart

    BTC seems to be creating a double-top pattern with a neckline at $5,510 on the 4-hour chart. A break below that level would create room for a drop to levels below $5,200 (target as per the measured move method).

    A drop below $5,510 may happen in the next 24 hours or so, as the repeated failure to find acceptance above $5,870 has been accompanied by the bearish divergence on the RSI.

    Weekly chart

    Bitcoin closed last week above the 50-week moving average (MA), further strengthening the evidence for a long-term bullish reversal.

    The weekly chart RSI is also biased bullish, having convincingly scaled the resistance band of 53.00–55.00 last month.

    The 5- and 10-week MAs are trending north, also indicating a bullish setup. Notably, both MAs are located at $5,386, so that level could work as strong support this week.

    With the long-term chart looking bullish, a pullback to the 30-day MA or lower could be short-lived. A strong bounce from that average would likely yield a rally to $6,000.

    That said, the prospects of a deeper slide below $5,000 would improve if prices see back-to-back daily closes below the 30-day MA.

  • 18:40
    Peru Could Use Blockchain Technology And Fight Against Corruption via Stamping Partnership

    Peru could start using blockchain technology in order to fight against corruption at the government level. This comes a few weeks after the former president of the country, Alan García, committed suicide. Latin American countries have been affected by several corruption scandals over the past years.

    Blockchain Technology To Fight Against Corruption

    Although developed countries are not looking at blockchain technology to reduce corruption in their countries, Latin Americans are starting to implement different distributed ledger technology (DLT) systems to reduce corruption.

    According to Decrypt, the government of Pery announced that it has partnered with the blockchain startup Stamping.io and the Inter American Development Bank so as to build a fully transparent, contract-procurement system. This would allow processes to be completely stored and processed through an immutable ledger.

    The main goal is to create a verification system that would allow reducing corruption by creating a more transparent and traceable system.

    Steve Ghiassi, the CEO of Legal and the president of the Australian Legal Technology Association commented about it:

    “A key part to reducing corruption is to create more transparency and traceability. It could reduce some level of internal fraud and tampering, as internal audits could be conducted more accurately with a full, visible trail.”

    The startup has already developed a blockchain-based platform that will be registering information about purchases from Peru Compras, a government agency that regulates purchases in its territory. Moreover, the information is going to be registered on the LAC-Chain, a permission blockchain.

    During a conversation with Decrypt, the co-founder of Stamping.io, José Zárate Sousa, explained that Decrypt is already showing signs of very fast growth. There are some days in which it registered more than 500 and 1,000 orders. Thus, LAC-Chain could become one of the largest and most active blockchain networks in the region.

    There are other positive effects besides reducing corruption. It will be possible to increase efficiency and reduce the costs of the administrative process as a whole. Processing times are expected to be reduced by 80 percent.

    The firm is also trying to reach new markets in the region, including Chile, Ecuador, and Colombia. Thus, this technology is expanding all over the region and it could help these countries to improve their processes, efficiency and more.

    Meanwhile, in Argentina, blockchain technology has been embraced in the Province of Córdoba so as to increase governmental efficiency and reduce bureaucracy.

  • 18:35
    PepsiCo Blockchain Trial Brings 28% Boost in Supply Chain Efficiency

    Food and beverage giant PepsiCo has conducted a blockchain trial that brought a 28 percent boost in supply chain efficiency.

    Dubbed “Project Proton,” the trial set out to examine if blockchain could address “industry challenges” in programmatic advertising.

    PepsiCo’s project partner and media agency Mindshare announced the news Monday, saying that it assisted in the trial, which carried out a programmatic end-to-end supply chain reconciliation using Zilliqa’s blockchain platform. The effort compared a control budget with one for the test to gauge the effectiveness of the technology.

    Zilliqa’s smart contracts were further used to automate the programmatic supply chain, Mindshare said, explaining:

    “These smart contracts reconcile impressions that are delivered from multiple data sources with payments facilitated using an internal Native Alliance Token (NAT) all in near real time, resulting in major efficiency gains and complete transparency for the brand owners.”

    The results indicated efficiency increases “in terms of costs for viewable impressions, in running the campaign through smart contracts, versus one without,” according to Mindshare.

    Other partners in the project included online advertising company Rubicon, programmatic marketing technology firm MediaMath and media firm Integral Ad Science.

    The trial was conducted in March in the Asia Pacific region. The partners now plan to run a second phase with the addition of payments to publishers and more performance metrics.

    Farida Shakhshir, PepsiCo’s director of consumer engagement for the Asia, Middle East and North Africa regions, said:

    “The results are encouraging, and we plan to run a few more campaigns under different conditions to verify more hypotheses and measure overall impact.”

  • 17:19
    Ripple’s xCurrent 4.0 goes live; user upgrade currently in progress, says CTO David Schwartz

    David Schwartz, CTO of Ripple, confirmed on Twitter that Ripple’s xCurrent 4.0 was live and that user upgrade was in progress.

    Ripple’s xCurrent, one of the company’s enterprise software solutions, enables banks to settle cross-border payments with end-to-end tracking. With the help of xCurrent, banks are able to communicate with each other to confirm payments and transaction details.

     

    David Schwartz confirmed the news after being asked on social media about the status of xCurrent 4.0. He tweeted,

    Source: Twitter

    David Schwartz added that the upgrade process was going to be a complicated one.

    He further stated that the upgraded version on xCurrent would allow users to experience an easier integration process, which was not previously possible on the platform. Customers will be able to access xRapid support, easier peer-to-peer commute, and Multi-hop, among other major new features.

     

    David Schwartz was further asked about the upgrade and whether the process would be a simplified upgrade protocol.

    He responded that the upgrade would not be entirely straightforward as the architecture of xCurrent 4.0 was different, requiring important changes in the customer middleware.

    The announcement was well received by Twitterati, with the XRP community rejoicing following the current update.

    Twitter user, @XRPress stated,

    “It’s aliivvvveee! Congrats on 4.0 – the ecosystem is maturing before our very eyes!”

    Ripple’s long-term objective has been to create a seamless payments system across the globe, so that cross-border payments are no longer a hassle.

  • 17:14
    Regulators Ready to Approve Ethereum Futures, CFTC Insider Says

    The Takeaway

    The CFTC is willing to let an ether futures contract go to market after soliciting market feedback last year

    A futures contract might bring in fresh institutional funding to the crypto space

    This, in turn, might reassure retail traders looking at the cryptocurrency

    Futures might also cement the CFTC’s jurisdiction over ether, which at present is limited to enforcement actions

    The U.S. Commodity Futures Trading Commission (CFTC) is willing to approve an ether futures contract – provided it ticks all the right boxes, a senior official has told CoinDesk.

    The CFTC, which oversees derivatives markets in the U.S., has already allowed bitcoin futures markets to launch, with both CME Group and Cboe Global Exchange offering cash-settled contracts at the end of 2017. Now, the regulator is willing to oversee a similar product for ether, currently the world’s second-largest cryptocurrency by market cap, said the official.

    “I think we can get comfortable with an ether derivative being under our jurisdiction,” said the person, who did not want to be identified because the regulator does not typically publicize decisions to adopt new products.

    “We don’t do bold pronouncements, what we do is we look at applications before us,” the official said, explaining:

    “A derivatives exchange comes to us and says ‘we want to launch this particular product.’ … If they came to us with a particular derivative that met our requirements, I think that there’s a good chance that it would be [allowed to be] self-certified by us.”

    However, the CFTC would only respond to a specific application put before the regulator, rather than volunteer an opinion, the individual said.

    If proposed and approved, a regulated futures product would open up the ether market to broad institutional investment.

    “Many funds have mandates that do not allow them to buy the digital currency underlying,” said John Todaro, director of digital currency research at financial software provider Tradeblock. Further, a cash-settled futures contract, paid out in fiat rather than the underlying crypto, would allow hedge funds and the like “to gain exposure to ether without worrying about custody (which has been a bottleneck to institutional investment),” he said.

    In the long run, Todaro added, a CFTC-supervised futures market “could usher in confidence among regulators such as the SEC [Securities and Exchange Commission] which could pave the way for an ETF,” an exchange-traded fund bringing additional liquidity to ether.

    An increase in institutional investment would, in turn, bolster retail investors’ confidence in ether, Todaro said.

    CME and Cboe’s bitcoin futures, when they first launched, saw an immediate positive response, with enough traders trying to purchase Cboe’s contracts that the firm’s website crashed. The introduction of these futures contracts may also have contributed to bitcoin’s price skyrocketing to its all-time high of nearly $20,000.

    To be sure, some have argued that futures may also have hurt bitcoin’s price, though Todaro said that it is more likely that bitcoin’s price had already reached its peak and the approval of futures just happened to coincide with that time.

    Learning process

    The CFTC first indicated it was looking at ethereum in December when the regulator published a “Request for Input” (RFI) asking a number of questions about the world’s second-largest cryptocurrency by market cap, the market around it and the underlying technology.

    These questions ranged from asking about proof-of-stake (the consensus mechanism that ethereum is expected to eventually adopt to replace bitcoin-style mining) to how ether deposits may be audited.

    The agency explicitly asked what impact the introduction of derivatives contracts might have on the cryptocurrency.

    George Pullen, a senior economist with the CFTC Division of Market Oversight, told CoinDesk at the end of March that the RFI sought industry and market input on the risks, mechanics and use cases for ether.

    In particular, the CFTC was looking to contrast ether with bitcoin, he said, explaining:

    “After our initial public white papers, primers, on virtual currencies, bitcoin, and smart contracts it was clear that a one-size fits all approach to crypto was not appropriate and we needed to know more.”

    The CFTC’s RFI will help the regulator to understand “the range of issues that might exist” around the ether space, as well as develop better relationships with the crypto community at large, he added.

    “It’s critically important for us to engage in outreach to understand the variety in technologies, markets, and the differences in the community; if we’re just listening to our own voices inside the building, the loudest voices in business, or just the voices in D.C. we could miss out on the bigger picture,” Pullen explained at the time.

    A total of 35 comments were submitted to the CFTC’s RFI by trade associations like the Chamber of Digital Commerce, think tank Coin Center, startups Blockchains LLC and Circle, exchanges like Coinbaseand self-proclaimed bitcoin creator Craig Wrightamong others.

    The CFTC, or at least its Chairman, J. Christopher Giancarlo, is already pretty popular within the community, which has dubbed him “Crypto Dad” after he called for light-touch regulation around the space.

    Power grab?

    In addition to giving investors access to a new derivatives product, approving an ether futures contract may cement the CFTC’s regulatory authority over the underlying spot market.

    Notably, ErisX, a digital assets and futures trading platform (which wants to offer bitcoin, bitcoin cash, litecoin and ethereum futures when its derivatives clearing organization license is approved), believes that regulating a futures contract on ethereum would grant the CFTC some additional oversight on the ethereum spot market.

    Thomas Chippas, the exchange’s CEO, wrote in his response to the RFI that a futures contract that “includes a settlement price set by a physically settled cash market” in the U.S. may improve the CFTC’s “ability to properly oversee or monitor the cash market for fraud and manipulation.” ErisX declined to comment for this article.

    The CFTC likely already has some jurisdiction over the ether cash market, several lawyers CoinDesk spoke to said. However, this authority is limited.

    Anne Termine, who leads the futures and derivatives practice group at Covington & Burling LLP and was previously a chief trial attorney with the CFTC’s Division of Enforcement, told CoinDesk that the regulator has already clearly said cryptocurrencies are commodities.

    “As such, the CFTC has limited regulatory oversight over cryptocurrency spot markets, namely the ability to take enforcement action whenever there is fraud or manipulation in these spot markets,” Termine said.

    Amy Davine Kim, chief policy officer with the Chamber of Digital Commerce, a D.C.-based blockchain advocacy group, noted that the regulator has “after-the-fact” enforcement jurisdiction over crypto spot markets in terms of fraud or manipulation, but no jurisdiction over exchanges simply conducting spot transactions.

    Moreover, anything that is not a security is usually broadly defined as a commodity, she said.

    The question of whether ether is a security has not been officially resolved, but officials at the SEC seem to believe it isn’t. William Hinman, the agency’s director of corporation finance, said at a conference in 2018 that he does not see ether as a security.

    His comments were seemingly affirmed by SEC Chairman Jay Clayton in March, who wrote that he agreed with Hinman’s analysis of when a crypto asset might not be a security, though he did not specifically name ethereum.

    Introducing a “futures contract would implicate the CFTC’s jurisdiction beyond anti-fraud and manipulation provisions,” Termine explained. The contract would have to trade on a CFTC-regulated futures exchange, meaning it would be subject to the regulator’s direct oversight.

    Termine concluded:

    “The implications for the broader community would be enhanced CFTC oversight over [ether] but potentially a legitimization of the cryptocurrency.”

  • 10:26
    TWITTER AND GOOGLE TRENDS INTEREST PRECEDES CRYPTOCURRENCY PRICE, STUDY FINDS

    The volume of tweets and Google Search Volume Index (SVI) were found to be leading price indicators for Bitcoin and Ethereum, according to a research paper published by the Southern Methodist University.

    THE IMPORTANCE OF SENTIMENT

    In the paper, researchers gathered data on Twitter mentioning Bitcoin and Ethereum; the same was done using Google trends. Building on the ideas of previous research, the hypothesis was that the number of tweets and their sentiment (positive and negative) can influence prices. In the study, it was uncovered that the number of tweets and Google searches changes first before prices do.

    The role of sentiment in technical or market analysis is to uncover people’s attitudes towards an entire market or individual index (in this case Bitcoin and Ethereum). The theory of sentiment analysis is a branch of technical analysis that states that price discounts everything, and that price trends are ultimately a reflection of crowd psychology.

    Therefore, in theory, if you could measure how positive or negative the people’s shared views are towards a particular stock or cryptocurrency, you could estimate its price trajectory.

    Although in this particular study, tweet volume, and not sentiment, was found to be a leading factor in the price of cryptocurrencies. The lack of sentiment being the leading factor was theorized due to the amount of “noise” there is on Twitter about the currencies compared to actual conversation.

    For instance, the researchers found that there 21 million bots on Twitter posting mostly factual information about prices, advertisements, spam etc. Not humans having real discussions about how they feel about either Bitcoin or Ethereum.

    The other issue that researchers found with Twitter was that sentiment was mostly positive in nature — even when the prices of Bitcoin and Ethereum were falling.

    People who tweet about cryptocurrencies even when their prices drop have an interest in them beyond investment opportunity making the tweets biased towards positive.

    Despite their findings, the researchers did not completely rule out sentiment analysis using different modeling techniques.

    METHODOLOGY

    In the study, researchers used to open source VADER (Valence Aware Dictionary and Sentiment Reasoner) for analyzing tweet data. Tweet data was taken dating back to 2014 using the site bitinfocharts.com. Google trends data (SVI) was taken as far back as 2004 scaled in the terms proportion to all searches on all topics for the terms Bitcoin and Ethereum.

    RESULTS

    For the Google trends data, the report found that the price was highly correlated with searches for the keyword Bitcoin and Ethereum, and that these search spikes occurred before the actual increase in prices were observed.

     

    Another strong correlation between Twitter and Bitcoin’s price was found, except this time with more compelling results.

    Finally, using machine learning, the results from the Google trends and tweet data was also put into a linear model to verify the positive correlations. The data was split between a training model and testing in an 80% and 20% split.

     

    SOCIAL MEDIA HELPS MONITOR INVESTOR ‘CHATTER’

    The VADER data could provide some valuable data for investors in gauging market sentiment.

    Previously, Bitcoinist has covered the importance of social media chatter on Twitter before with tools such as the ‘Twitter Hype Index.’ But this is the first time that Twitter and SVI data has shown to lead, and not follow, the prices of the most popular cryptocurrencies.

  • 08:12
    Bitcoin Nation: 22 Million US Crypto Traders Dwarf Global Rivals

    By CCN: The overwhelming majority of crypto traders come from the United States, according to surprising new research from DataLight.

    The firm analyzed traders using the top 100 Bitcoin exchanges and found that over 22 million users hail from America. The next in line is Japan with 6 million, followed by South Korean’s 5 million users.

    US DOMINATES CRYPTO TRADING INDUSTRY

    Collectively, it takes almost six other countries to reach the same number of traders as the US.

    Notably, Korean exchanges like Bithumb report massive volume, but this volume is likelyalmost entirely fake. Several exchanges also engage in “transaction mining,” where users are rewarded for conducting trades, which means pumped-up volume.

    DataLight’s report notes some interesting findings, including the impressive number of Turkish Bitcoin traders.

    “Turkey for example, has in the last year seen wild fluctuations in the value of the Turkish Lira, as turbulent political conditions rock the country. Interestingly, on one day in August 2018, a 10% drop in the value of the Lira was accompanied by a marked spike in volumes on bitcoin exchange LocalBitcoins.”

    CCN, incidentally, recently reported on problems that people are having with Turkish exchange Sistemkoin.

    Turkey sports a population of nearly 80 million people, 2.4 million of whom trade. This is about 3% of their citizens, compared with 7% of the US population trading cryptos. Meanwhile, nearly 6% of all people in the UK trade cryptocurrency. These figures are quite high, but the report also doesn’t account for the frequency of trading. The data would be much more interesting if it were colored in light of how heavily each country trades.

    ‘CRYPTO NATION’ HITS 68 MILLION CITIZENS AND JUST KEEPS GROWING

    The United States remains a regulatory nightmare for crypto traders, however, with several agencies claiming jurisdiction over the trade. Recently, FinCEN, a party rarely heard from in crypto anymore (we hear more from the SEC these days), fined a Bitcoin trader. Law enforcement agencies, the SEC, and CFTC – among others – also take part in regulating cryptocurrencies.

    The situation is so confusing that the Token Taxonomy Act has been re-introduced with an eye toward simplifying the whole asset class. Under the proposed law, in-kind exchanges up to $600 would not be considered taxable income, and the SEC would lose jurisdiction over crypto tokens.

    America’s largest exchange is Coinbase, which boasts more than 10 million of the 22 million overall users.

    Several data points would be helpful to better analyze this research. As stated before, the frequency of trading would be useful. Additionally, we’d love to know the amount of trading, as well as how long these reported users have been trading. For example, how many new users were added during the 2017 bull run, and how many have since left?

    According to DataLight, there are a total of around 68 million crypto traders across the world. This is more people than live in the United Kingdom.

    Binance CEO Changpeng Zhao believes the number of crypto users in the future will outpace the number of Internet users today.

    In a few years, there will be more users in #crypto than there are users for internet today.

    — CZ Binance (@cz_binance) April 30, 2019

     

    As the movement grows, one wonders what sort of political power such a population might wield down the line. As for today, it seems a few representatives and some outlandish presidential candidates are the best we can muster. But how long will it be until politicians are forced to court the crypto vote?

  • 07:14
    Crypto VCs: As Bitcoin (BTC) Eventually Nears $100,000, Altcoins Will “Die Off”

    While there have been a number of calls for an altseason and the death of Bitcoin, BTC has begun to outperform its crypto peers yet again, posting gains when altcoins suffer. As of the time of writing this, Bitcoin dominance sits at a hefty 55.8%, up from lows of around ~35% at the peak of 2018’s bubble.

    One venture capital group, Heisenberg Capital, led by anti-establishment proponents and (very) early cryptocurrency adopters Max Keiser and Stacy Herbert, says that Bitcoin’s hegemony may continue to grow.

    In a recent tweet, the venture capitalists, who have purportedly allocated capital to Kraken, ShapeShift, Abra, Bitfinex, among other prominent industry upstarts, remarked that the market has begun to reject everything, save for BTC. This has seemingly been the case. As explained earlier, the so-called “crypto winter” of 2018 has allowed Bitcoin to claw back market share from altcoins, most of which were dramatically overvalued and overhyped during early-2018.

    We see the market rejecting everything, except BTC. 

    This has been our dominant investing thesis since 2011. 

    We’re doubling down on Bitcoin Maximalism with new capital.

    As BTC climbs toward our 2011 target of $100,000, we believe everything except BTC will die-off.

    — Heisenberg Capital (@HeisenbergCap) May 5, 2019

    Heisenberg corroborates this, even hinting that it thinks altcoins still have few viable use cases or a lack of a solid value proposition when it wrote: “As BTC climbs toward our 2011 target of $100,000, we believe everything except BTC will die-off.”

    History would agree with this analysis.

    A majority of 2013’s top 20 crypto assets have all but faded out of existence, with newer projects like Ethereum, Monero, and EOS ousting Namecoin, Peercoin, and Feathercoin, which all used to be the crème de la crop back in their hay day. Not only have these little-known projects faded from public memory, but some have totally abandoned, with their token values dropping off the face of the Earth. While many new blockchain projects have more staying power than their predecessors, many commentators, like Blockstream’s Samson Mow, are sure that history will rhyme… eventually.

    What Will Drive Bitcoin Past $100,000

    This begs the question — what will drive Bitcoin past $100,000? Well, according to Keiser, it will have much to do with Bitcoin’s underlying characteristics. In an interview conducted with Bitcoinist’s Allen Scott late last year, the investor noted that the Bitcoin protocol itself is “genius,” alluding to the controversial opinion that the nature of the world’s first blockchain supersedes price. Saifedean Ammous, for instance, has incessantly called BTC, the world’s “hardest money,” alluding to its nature as a decentralized, borderless, censorship-resistant, and scarce asset that easily ousts government-issued cash in a variety of facets.

    Interestingly, the interviewer went on to draw attention to the fact that a majority of industry participants see BTC as a “risk-on asset,” debasing the sentiment that BTC is essentially the world’s second coming of gold but in a digital form. Yet, Keiser added that this is, in fact, false.

    Keiser explained that BTC, like gold and traditional fiat, is a “risk-off” asset. And as such, he exclaimed that once the market at large acknowledges this fact, which has flown under the radar, the world’s first cryptocurrency could surpass its all-time high as capital flight occurs to BTC. He further explains:“Bitcoin is the monetary black hole that will gobble up all fiat and rise to more than $100,000 doing it. But humans themselves may never see that day.”

  • 03:58
    Bitcoin’s Lightning Comes to Apple Smartwatches With New App

    You can now receive bitcoin’s experimental lightning payments with a few taps of an Apple smartwatch.

    Launched Sunday by Bluewallet, one of the more popular lightning network wallets, their new app for Apple Watches allows users to receive bitcoin over its new, risky (but nonetheless promising) payment technology: lightning. Transactors can use the smartwatch app to generate a QR code — a square-shaped barcode — that someone else can then scan with their smartphone to send over a payment.

    Bluewallet tweeted a sneak peek of the app weeks ago. But as of today, it’s officially downloadable from the iTunes store.

    Product and UX engineer Nuno Coelho framed the app as an experiment, telling CoinDesk:

    “It’s a small experiment we’re doing to put wallets on the watch. The first releases will be simple, allowing you to receive lightning payments.”

    Why might someone want to receive lightning transactions via a smart watch? you might ask. Smart watches aren’t as popular as smartphones, but many use them for the convenience of tracking health and viewing phone notifications without actually pulling out the phone.

    Bluewallet, to that end, is testing to see if users might like to use them for bitcoin payments as well.

    “Sometimes the convenience of just [receiving bitcoin] with two taps from your wrist can be a relevant user experience, specially on the go or if you need to be fast,” Coehlo said, adding it might be useful if you’re buying bitcoin from someone, but “don’t feel comfortable” taking out your phone, you could just use the watch instead.

    But Coehlo stresses that this is an experiment, since lightning technology itself is still very experimental, and they’re not sure how many users will actually want to use the app.

    “If feedback is good, we’ll spend more time on the project,” he told CoinDesk. “It’s a very early stage industry so we’re trying to figure out how to build this stuff properly.”

    Bluewallet, helmed by a team of three developers, is also working on other features to expand the wallet. “We would also like to move from being a third-party service, minimizing trust. That’s our most important goal at the moment,” Coehlo said.

  • 03:23
    ‘YOU CAN’T BUY BITCOIN’ – IS HOW BANKS PROMOTE BITCOIN, SAYS ECONOMIST

    Economist Saifedean Ammous was recently interviewed on Stephan Livera’s Podcast. Ammous explained the best way government can defeat Bitcoin and why banning it actually helps the opposite.

    As per the original podcast, Ammous was asked to comment on his most recent research on the potential strategies that could be employed by governments to shut down Bitcoin.

    Ammous stated that a government banning Bitcoin could actually be beneficial for the currency, stating:

    If your bank tells you, ‘You can’t buy bitcoin with your bank account.’ That’s really just an advertisement for Bitcoin.

    GOVERNMENT ‘BAN’ GOOD FOR BITCOIN

    Ammous gave two reasons for why such a ban could help, and not terminate Bitcoin’s existence. The first reason the economist gave was the fact came down to the risk and reward factor of using the coin in the first place. If the coin were illegal to use, that would mean there would be a very high risk of using it, thus justifying the coin’s value.

    The second reason Ammous gave was that such a restriction on buying bitcoin would be a significant step by the government in restricting people’s freedoms. In both cases, the demand for Bitcoin and other pseudonymous currencies would increase due to public backlash and underground markets, thus leading to a ‘Streisand effect.’

    COULD GOVERNMENTS KILL BITCOIN?

    Following these arguments given by Ammous, Livera asked what then, were some viable strategies that governments could use to compete with Bitcoin?

    Ammous suggested that governments could compete with Bitcoin’s technology, thereby making it obsolete in terms of practical usefulness. Besides offering individuals more monetary privacy and freedoms, his other suggestion was to “return to a classical gold standard.”

    Ammous was apparently adamant on his gold standard approach as he stated in the interview:

    If you had that kind of monetary system, and if you had it worldwide, I think that would seriously undermine the demand for bitcoin

    Bitcoinist recently reported that “Bitcoin has superior physical properties and market utility” to gold. This also includes the Winklevoss twins who believe Bitcoin will surpass the $7 trillion gold market.

    Being unconfiscatable and cheaper to store value, being just some of the reasons why.

    #DROPGOLD

    Meanwhile, a new campaign, started by Grayscale Investments,  is embracing this by proclaiming gold an obsolete store of value. The firm has launched a social media campaign using the hashtag #DropGold as its moniker.

    Today we unveiled our #DropGold TV commercial. We think it's a #MustWatch

    sound ON! pic.twitter.com/SEGAmMItsE

    — Grayscale (@GrayscaleInvest) May 1, 2019

     

    Specifically, Greyscale Investments compares Bitcoin favorably to gold in terms of its “verifiability, durability, portability, divisibility, fungibility, recognizability, and scarcity.”

  • 02:44
    Sports World Eyes Crypto and Bitcoin Scandal Embroiling Ex-NFL Owner As Bitfinex Gets Axed From BTC Price on CoinMarketCap

    Leading cryptocurrency data tracker CoinMarketCap has excluded Bitfinex from the aggregated price of Bitcoin (BTC). Bitfinex, one of the world’s leading crypto exchanges, is the subject of a host of accusations made by the New York Attorney General’s office. The growing scandal implicates businessman Reginald Fowler, a one-time minority stakeholder in the NFL’s Minnesota Vikings.

    While Bitfinex is still listed on CoinMarketCap, its BTC price shows an asterisk, denoting exclusion. Bitcoin is trading for $6,050 on Bitfinex compared to CMC’s aggregate price of $5,768, at time of writing.

    Bitfinex Bitcoin (BTC) Price Exclusion

    Source: CoinMarketCap

    detailed report from the NYAG’s office alleges that iFinex Inc., which operates both Bitfinex and Tether, has engaged in a series of fraudulent activities, resulting in a multi-million-dollar cover-up involving customers’ funds. Bitfinex, headquartered in Hong Kong and registered in the British Virgin Islands, is a leading cryptocurrency exchange, and Tether (USDT) is the world’s leading stablecoin, used by crypto traders to escape market volatility.

    In the immediate aftermath of the AG’s legal filing on April 25, which accuses the exchange of covering up $850 million in losses, traders pulled $175 million in Bitcoin, XRP and Ethereum out of the embattled exchange, with data trackers monitoring movements by large crypto investors, also known as whales. Whale watchers tracked $243 million in withdrawals from Bitfinex by May 1.

    News of the cover-up triggered an increase in the “Tether risk premium,”  which increased the price of Bitcoin on Bitfinex where there’s a high trading volume of the BTC/USDT pair.

    By eliminating the controversial exchange’s higher Bitcoin price, CoinMarketCap reduces the skew, reflecting a more conservative figure for the world’s number one cryptocurrency.

    While the revelations about alleged crimes involving Bitfinex have not dampened the crypto market rally, with Bitcoin rising to $5,768 at time of writing, an increase of 11% since the release of the AG’s legal filing, the fall-out from the scandal continues.

    Bitcoin Price

    Source: CoinMarketCap

    Federal prosecutors announced on April 30 that a grand jury has indicted Arizona businessman Reginald Fowler.

    According to the legal filing, Fowler is accused of operating an unlicensed money transmitting business with ties to Bitfinex, presumably in conjunction with the third-party company Crypto Capital, alleged to be in possession of the exchange’s $850 million.

    “Defendant has been charged with bank fraud, conspiracy to commit bank fraud, operation of an unlicensed money transmitting business, and conspiracy to operate an unlicensed money transmitting business. These crimes all relate to Defendant’s alleged involvement in a scheme to operate a shadow bank on behalf of cryptocurrency exchanges in which hundreds of millions of dollars passed through accounts controlled by Defendant in jurisdictions around the world.”

    According to the indictment, email search warrants unearthed a document entitled ‘Master US Workbook.’

    “This workbook indicates that the scheme had received over $740 million in 2018 alone. It lists approximately sixty different bank accounts, held at both domestic and international banks, with a combined account balance of over $345 million as of January 2019. Notably, this workbook indicates that approximately $50 million is held in domestic accounts, with the rest located abroad.”

    Sports Illustrated reports that Fowler, in a separate business dealing, was involved in funding for the now-defunct Alliance of American Football (AAF), founded in February as a feeder league for the NFL. The businessman had pledged roughly $25 million to the AAF as the league’s primary investor. But the funds were inexplicably held up around Christmas.

    According to Sports Illustrated, Tom Dundon, majority owner and chief executive officer of the Carolina Hurricanes, was named chairman of the AAF with Fowler in the wings as a lead investor.

    “The email from Ebersol to the entire Alliance went out on Feb. 22, 2019, at 5:34 p.m. ET.

    This week, all of your hard work was validated and our company secured the necessary funding to accelerate growth into our next phase as a business. Tom Dundon, [now] our largest institutional investor and the control owner, will serve as chairman of the Alliance Board of Directors. . . . He is excited and fired up about what we’ve created, and ready to propel the league forward for many years to come….”

    “Around the same time that Fowler was theoretically engaging in discussions about funding the new football league, authorities allege he was also operating ‘shadow banking services’ on behalf of a crypto currency exchange company that misrepresented money transfers and skirted international ‘anti-money laundering verification services’.”

    NBC Sports, reporting on Fowler’s unrelated cryptocurrency operation, asks how Fowler got approved as the main investor for the AAF initiative.

    “How did he get approved? Was he just the only guy who was willing to do it? And if this is the best you have, don’t you just say at that point, ‘Maybe we’re not going to go forward with this?'”Fowler was arrested on Tuesday. Under investigation by the FBI since last year, he was accused of “disregarding” the bureau’s efforts and was considered a flight risk. His Israeli co-conspirator, Ravid Yosef, remains at large.

  • 00:47
    Digital Currency Exchange Bits of Gold Enters European Market

    Israel-based digital currency exchange Bits of Gold has just announced plans to enter the European market. The company will also launch a service allowing other international applications and exchanges to buy and sell Bitcoin and Ethereum while relying on the Bits of Gold system to manage compliance, banking, and liquidity infrastructures.

    Israeli Bitcoin broker explores new opportunities

    Bits of Gold, one of Israel’s largest Bitcoin brokers, currently supports 50,000 Israeli customers, and has reported a turnover of nearly $140 million during the last two years, representing about 180,000 successful transactions.

    CEO Youval Rouach explained the move by saying, “In the last six years we have learned with the community how to build this bridge between traditional money and crypto. It is precisely the time to take this knowledge and use it in Europe as well.”

    Digital currency exchange adds new services

    Rouach noted that the company had updated its website and financial systems to cope with all of the challenges involved in the expansion. “The move has two arms – one focused on the buyers themselves, and the other aimed at different service providers that will enable their customers to buy and sell digital coins through our service.”

    Bits of Gold handled nearly $350 million in trades

    Bits of Gold released data related to its business activity over the last few years to back the decision to expand into Europe. The exchange’s clients have bought and sold more than 64,000 Bitcoins, with a value of nearly $350 million, which Rouach credits to the company’s “unique ability that accompanies the customer and supports him from the moment of payment until the moment of receipt of the coins and vice versa.”

    Company also courting institutional investors

    In addition to its expansion into the international market, Bits of Gold has been competing to gain more institutional investors. In February, the exchange joined with the Israeli company Silver Castle, which was the first cryptocurrency investment firm dedicated to institutional and accredited investors. Silver Castle customers can use Bits of Gold to convert fiat currency into Bitcoin, which can then be placed into investment funds.

  • 00:31
    Ripple Adds SBI President To Its Board of Directors

    Blockchain payments startup Ripple has added new director to its board, Yoshitaka Kitao, who is currently president, representative director and CEO of Japanese financial giant SBI Holdings.

    Ripple announced the news last week, saying that Kitao will be replacing the CEO of SBI Ripple Asia Takashi Okita.

    Kitao has over 40 years of work experience in global financial markets. He established SBI Holdings in 1999 and has previously worked with Softbank Corporation and Nomura Securities, according to the announcement.

    Ripple co-founder and executive chairman of the firm’s board of directors, Chris Larsen, said:

    “Approximately half of our customers are located in Asia-Pac today, and we’re rapidly expanding our global footprint across the region. Mr. Kitao comes at a perfect time for Ripple as we look to deepen our customer base in Asia and beyond.”

    The relationship between Ripple and SBI is not new. Back in 2016, the two firms formed a joint venture called SBI Ripple Asia. The joint venture received a license to launch its blockchain-based payments app for consumers last September, and a month later the app MoneyTap went live.

    SBI Ripple Asia also formed a consortium last year to research the use of blockchain technology in securities products, aiming to improve efficiency for customers and reduce operational costs for firms.

    In other news, Saudi British Bank (SABB) announced Thursday that is has launched “instant” cross-border money transfer services via Ripple to improve customer experience. SBI, on the other hand, recently established a new subsidiary to manufacture cryptocurrency mining chips and systems.