10hours ago, 10 Dec, Monday
UK Parliament Member Suggests Making Bitcoin a Payment Option for Local Taxation System
A conservative member (MP) of the United Kingdom’s (U.K.) Parliament has said that making payments to local authorities and utility providers with Bitcoin (BTC) should be possible. The MP’s statements were reported by local news outlet Express.co.uk on Dec. 10.
The article notes that Eddie Hughes, a member of the U.K. Parliament for the Walsall North constituency, described himself as a “crypto enthusiast with amateur knowledge.” He notes that blockchain gets a lot of attention and members of the parliament “have a duty to understand it.”
Hughes further explained that he recently met with the Royal National Lifeboat Institution, which accepts cryptocurrency donations, and that the encounter made him think:
“What’s to stop us [from] being able to pay council tax and other bills with Bitcoin?”
Praising Ohio’s new BTC tax payment option, Hughes said in relation to the U.K.’s crypto stance:
“You’re either ahead of the curve or you’re behind the curve, and our country is in an interesting position right now — we need to be seen as a progressive country.”
The recent crypto market crash has reportedly eased the pressure on U.K.'s Financial Conduct Authority to create “hasty” new crypto regulation. According to Reuters, the previously urgent need to create regulation had raised the risk of a heavy-handed approach that could potentially damage the industry.
Now that the crash has happened, officials have indicated that they will take more time to ensure a more balanced legal framework.
During a cryptocurrency-themed conference in London, Gillian Dorner, deputy director for financial services at Britain’s finance ministry, said that this is an opportunity “to take the time to look at that in a bit more depth and make sure we take a proportionate approach.”
ICOs Are ‘Effective Way’ to Raise Capital If Rules Are Followed: SEC Chairman
Jay Clayton, chairman of the U.S. Securities and Exchange Commission (SEC), has spoken of the advantages of initial coin offerings (ICOs) as a way to raise capital – with a significant caveat.
In a speech last week, focused on reviewing the SEC’s progress in 2018 and discussing the agenda for 2019, Clayton said “I believe that ICOs can be effective ways for entrepreneurs and others to raise capital.”
However, he added that securities rules must be adhered to where appropriate.
“The novel technological nature of an ICO does not change the fundamental point that, when a security is being offered, our securities laws must be followed,” he said.
The chairman further said that the SEC and its staff “have spent a significant amount of time” focusing on blockchain and cypto assets and that is a trend he expects to continue in the coming year.
“A number of concerns have been raised regarding the digital assets and ICO markets, including that, as they are currently operating, there is substantially less investor protection than in the traditional equities and fixed income markets, with correspondingly greater opportunities for fraud and manipulation.”
This is not the first time the SEC chief has addressed the issue of potential crypto market manipulation. Speaking at the recent CoinDesk Consensus: Invest conference, he said, “The prices retail investors are seeing are the prices they should rely on, and free from manipulation – not free from volatility, but free from manipulation.”
U.S. congressmen also introduced two bipartisan bills last week in order to prevent price manipulation in the crypto markets. The bills essentially ask the Commodity Futures Trading Commission (CFTC) and other financial watchdogs to come up with a roadmap for better crypto regulation so as to protect investors, as well as to boost the role of the U.S. as a fintech innovator.
In his speech, Clayton also spoke of the SEC’s recently launched Strategic Hub for Innovation and Financial Technology (FinHub), aimed at making it simpler for fintech startups, including those working with crypto assets, to navigate the legal implications of their products.
“As the FinHub and our other activities demonstrate, our door remains open to those who seek to innovate and raise capital in accordance with the law,” he said.
$3K Ahead? Bitcoin Price Bounce Is Again Losing Steam
Bitcoin (BTC) still has the potential to drop towards $3,000, despite a minor bounce from 15-month lows seen on Friday.
The leading cryptocurrency by market value picked up a bid at $3,210 three days ago – a level last seen in September 2017. The ensuing corrective bounce, however, seems to have run out of steam, as bitcoin is currently trading at $3,470 on Bitstamp – down 4 percent from yesterday’s high of $3,633.
It’s worth noting that prices are currently down more than 80 percent from the record high of $20,000 reached last December. Further, BTC has depreciated close to 47 percent in the last month, forming record oversold conditions.
Even so, BTC is struggling to post a notable price bounce, which indicates bearish sentiment is still strong.
As a result, the cryptocurrency is likely to remain on the defensive in the short-term, at least. Notably, the 3-day chart, which can offer a better picture of the broader market trend than the daily and intra-day charts, is indicating room for a drop below the psychological support of $3,000.
As seen above, the previous three-day candle closed below support at $3,463 (low of multiple three-day candles in September 2017), validating both the recent high-volume sell-off from $6,200 and the bearish lower-high pattern carved out along the downward sloping 5-candle moving average (MA) over the last few days.
Further, both the recent “death cross” crossover between the 50- and 200-candle MAs and the steeply descending 10-candle MA are indicating a bearish setup.
As a result, BTC has potential to test $2,972 (September 2017 low) in the near-term.
Over on the 4-hour chart, BTC is struggling to cut through the descending trendline hurdle (marked in yellow), currently at $3,540. A break above that level could yield a stronger corrective rally to $3,800 (falling trendline hurdle).
The RSI, however, has already dived out of the ascending trendline, signaling bearish conditions. BTC, therefore, may have a tough time clearing the immediate resistance at $3,540.
BTC risks falling to $2,972 (September 2017 low) in the near-term, according to the 3-day chart.
Prices could rise to $3,800 if resistance at $3,540 is cleared in the next few hours. The bearish outlook, however, would only be invalidated if the descending 10-candle MA on the 3-day chart, currently at $4,250, is scaled.
Cryptojacking Malware KingMiner Evades Detection to Mine Monero
A malware used to mine the Monero cryptocurrency is relying on constant improvements to avoid detection and increase the chances of success.
According to researchers at Israeli cybersecurity firm Check Point Software Technologies, the malware which is known as KingMiner will likely continue getting updated in the future in order to increase the probability of successful attacks. This will inevitably make detection even harder.
KingMiner, which mostly targets servers developed by Microsoft specifically Internet Information Services (IIS) and SQL Server, employs brute force tactics to guess the passwords of the users with a view of compromising the server during the initial phase of the attack.
Upon gaining access, a Windows Scriptlet file (with the file name extension .sct) is downloaded before being executed on the machine of the victim. In the execution stage, the machine’s CPU architecture is detected and if older versions of the attack files are found, the new infection deletes them. KingMiner then goes on to download a file with .zip extension – this is not a ZIP file though but an XML file. The point here is to bypass emulation attempts.
It is only after extraction that new registry keys are created by the malware payload and Monero-mining XMRig file executed. By design, the XMRig CPU miner is intended to use about 75% of the CPU capacity but can exceed this as a result of coding errors.
KingMiner has been able to avoid detection by employing relatively simple mechanisms such as obfuscation and executing the executable file only in order to leave no trace of activity. Additionally, KingMiner is taking extreme measures to prevent its activities from being monitored or its creators getting traced:
“It appears that the KingMiner threat actor uses a private mining pool to prevent any monitoring of their activities. The pool’s API is turned off, and the wallet in question is not used in any public mining pools. We have not yet determined which domains are used, as this is also private.”
Detection Rates Low, Attack Attempts Growing
But even as detection engines report reduced detection rates of KingMiner, a steady increase in the malware’s attack attempts have been noted, according to Check Point Software Technologies.
The report by the researchers at Check Point comes at a time when incidences of cryptojacking across the globe are reported to have increased. In September, CCN reported that cryptojacking had risen by 86% in the second quarter of this year as per McAfee Labs.
Cryptojacking Surged by 86% in the Second Quarter of 2018: McAfee Labs https://t.co/Fa97d1LagB
— CCN (@CryptoCoinsNews) September 26, 2018
At the time, McAfee Labs indicated that the targets of the cryptojacking malware were not just personal computers but were increasingly smartphones and other mobile devices with an internet connection, an indication that bad actors were casting their net as wide as possible in the face of falling cryptocurrency prices.
UK Financial Watchdog May Ban Crypto CFDs for Retail Customers
The Financial Conduct Authority is reacting to the recent bear market by looking to ban retail CFDs on cryptos next year.
An announcement published by the UK Financial Conduct Authority proposes changes to the model with which contracts for difference (CFDs) are currently sold to retail customers, including a requirement for firms to limit the leverage on contracts and eliminate monetary and non-monetary incentives with the intention of encouraging trading.
However, with regards to cryptocurrencies, the FCA wants an outright ban on retail-oriented CFDs, citing the UK Cryptoasset Taskforce’s reports for 2018.
“The FCA will consult separately in early 2019 on a potential ban on the sale of derivative products referencing cryptocurrencies, including CFDs, to retail customers,” the organization said in its announcement.
The UK Cryptoasset Taskforce reported on its analysis of the cryptocurrency market towards the end of last month, and warned investors about cryptocurrency derivatives.
“Although regulated, financial instruments that reference cryptoassets also produce some specific risks to consumers. Leveraged derivatives, such as CFDs and futures, can cause losses that go beyond the initial investment. The risk of trading losses can be exacerbated by product fees such as financing costs and spreads, as well as by a lack of transparency in the price formation of the underlying cryptoasset,” the taskforce wrote.
In its conclusion, it supported a “potential prohibition” of retail-oriented derivatives that included “CFDs, options, futures and transferable securities.”
A few months ago, the FCA took measures to restrict cryptocurrency CFDs sold to retailers, limiting leverage to 2:1 to compensate for the high volatility in these markets. This was the status quo until the beginning of last month, after which the organization announced its proposal to prohibit the product from being sold entirely.
The expediency of this proposal may have been provoked by the current bear market, which saw Bitcoin shedding much of its value in the last few weeks. Anyone who invested in a CFD hoping to make a profit may have experienced heavy losses.
UK Should Introduce Crypto Exchange Regulation, FATF Says
The Financial Action Task Force recommendation is part of a broader report about British anti-money laundering and combating the financing of terrorism systems.
The Financial Action Task Force (FATF) global standard-setting body, has called on the United Kingdom to implement cryptocurrency exchange regulation. The rules should tackle money laundering and terrorist financing issues as the existing British laws do not have enough safeguards, the body said on Friday.
The FATF warning is part of the organization’s mandatory analysis of its member states’ anti-money laundering (AML) and combating the financing of terrorism (CFT) systems. The UK report analyzed how the country’s legislative provisions and regulatory practices comply with FATF Recommendations. The analysis found that the UK follows the organization’s proposals on new technologies, among them crypto assets.
However, the authorities should consider introducing exchange oversight as virtual coin trading operators are outside of the country’s existing AML/CFT rules, FATF writes in the report. The relatively small British crypto market and the lack of major illegal activities are not reasons for the exclusion of trading operators from state supervision.
The organization issued seven recommendations to the UK, including:
“Progress plans to extend AML/CFT requirements and related supervision to virtual currency exchange providers.”
Currently, the UK is obliged to introduce some exchange supervision as part of its commitments to the European Union (EU). The fifth revision of the EU Anti-Money Laundering Directive (AMLD) implements mandatory due diligence procedures for crypto-to-fiat and vice versa markets. However, crypto-to-crypto operators are outside of the AMLD scope. At the moment, it is unclear how the planned UK exit from the bloc and the ongoing Brexit negotiations will affect EU rules implementation in the future.
The FATF UK recommendations follow the organization’s recent decision to offer crypto regulatory rules to its member states. In October, the organization amended its AML/CFT rules, called Recommendations, to include the term ‘virtual asset’ and ‘virtual asset service provider.’ By June next year, FATF is to publish guidance for international virtual coin regulations that should cover exchanges, wallet providers and initial coin offering-related firms. The countries that fail to meet the new provisions will be put in the to FATF blacklist, which restricts access to the global financial system.
The organization has 37 members, among them US, China, Russia, Australia, Japan, Hong Kong, Germany, France, Turkey, and Saudi Arabia.
Bithumb Artificially Kept Bitcoin Price Inflated for Two Months: Report
A recent report published by CryptoCompare suggests that Bithumb artificially propped up Bitcoin price by ramping up its trading volume. The volume of South Korean exchange isn’t organic.
Bitcoin’s price seems to be in a free fall. It has reached the lowest point since September 2017, and as new records of decline are being broken everyday new reasons behind its rapid decline are coming out from a steady pace. Yesterday there was a report suggesting that Chinese miners shorting Bitcoin contributed to the ongoing decline, and now a new theory is out suggesting another reason which has got something to do with Bithumb.
That’s right. According to a new report recently published by CryptoCompare it seems that Bithumb contributed indirectly to the recent fall of Bitcoin. That is because it seems to have artificially propped up the volume of BTC trade for several months, thus delaying the fall that could have come long time ago. The report says that despite its setbacks of a hack attack and an acquisition after that the South Korean exchange kept leading all other crypto exchanges in daily trade volume. Its users declined sharply, but still the volume continued to spike between October and November. During this period Bithumb averaged about $1.24 billion in daily turnover, which means a stunning 284% rise in turnover. Of course, it’s too good to be true.
Bithumb actually achieved this high volume with various promotions and trading contests it organized during the period. The volume was not entirely organic, as one would expect. There was a “Super Airdrop Festival”, a “Special Gift” contest and many other similar promotions run by the company. There’s a reason why CoinMarketCap and other crypto information sites still list Binance as the leading exchange by trade volume.
The report said:
“Bithumb saw a 284% increase in volumes from the previous average of 323 million USD for the Sept/Oct period. This increase in volumes follows after Singapore-based BK Global Consortium bought a controlling share in the exchange in recent months, and later implemented a series of airdrop competitions, raffles, rebates, aBitnd other programs designed to incentivize non-Korean users to sign up to the exchange and trade in exchange for rewards. They have also implemented a potential form of trans-fee mining for certain users, where trading beyond a specific volume is rewarded in the form of “Bithumb Cash” at a later date.”
Now, since higher trade volumes have a correlation with higher Bitcoin price, it can be assumed that the price of Bitcoin would’ve reached the current levels almost two months ago. To further support the theory, Bitcoin’s first dip below $6,000 happened right after one of the promotions being run by Bithumb ended.
Had Bithumb not been doing this stuff, there’s a chance that Bitcoin price would’ve found a bottom earlier. By now we could have been witnessing a recovery. However, that didn’t happen. Now we’ll have to wait a bit more for it.
South Korea’s National Assembly to Engage in First Crypto Debate: Possible Outcomes
On December 10, South Korea’s National Assembly along with several members of the Congress are set to hold the country’s first official debate around crypto involving high profile government officials.
Expected Talking Points of the Debate
The meeting, arranged by the local market’s largest cryptocurrency exchanges including Upbit, Bithumb, Korbit, Gopax, and Coinone, will have executives of digital asset trading platforms and over-the-counter (OTC) exchanges discuss the regulatory scope of the government on crypto with members of the Congress.
Point 1: Transparency and Efficiency of Crypto Exchanges
Last month, the government of South Korea and the Financial Services Commission (FSC) officially allowed banks to work with cryptocurrency exchanges and blockchain-related businesses by providing virtual bank accounts.
However, the operators of cryptocurrency exchanges have requested the government to follow up on the guideline it released in January that prohibits individuals from trading with unconfirmed bank accounts. Currently, despite the FSC’s green light, small digital asset exchanges are struggling to obtain stable banking services from large commercial banks.
Additionally, due to strict capital controls, many cryptocurrency investors on local platforms are unable to send large amounts abroad using their bank accounts, restricting the ability of cryptocurrency exchanges to expand their operations into overseas markets.
Point 2: Establishing the Importance of Crypto Exchanges
Additionally, due to strict capital controls, many cryptocurrency investors on local platforms are unable to send large amounts abroad using their bank accounts, restricting the ability of cryptocurrency exchanges to expand their operations into overseas markets.
Point 2: Establishing the Importance of Crypto Exchanges
Barclaycard partners with blockchain startup Evernym on self-sovereign identity
Barclaycard, a credit card and payment services provider and a division of Barclays, has announced its plans to explore the benefits of “self-sovereign identity” (SSI).
Self-sovereign identity is the concept to enable people, organizations, and things to securely and privately store and control their own identity data, allowing them to share verifiable proof of who they are, for life. It could replace usernames and passwords, and even form-filling, forever.
Evernym is the company behind Sovrin – a body focused on developing, building, and promoting SSI. Based on blockchain technology, the Sovrin Protocol creates a unique, digital identifier that can be used to verify proof of identity anywhere and at any time. According to the whitepaper, the Sovrin protocol is based entirely on open standards and open source—the Hyperledger Indy Project.
After a year of sandbox and alpha testing, the Sovrin Network was formally launched on July 31, 2017, with a genesis transaction between the first 10 participating organizations known as “stewards”. In November 2018, Evernym launched the Accelerator Program with 15 founding members, including ATB Financial, IAG, Irish Life, the International Federation of Red Cross, Spark New Zealand, Truu and three provincial and state governments.
Through the accelerator programme, BPS will focus on developing “a commercial proposition in a safe test environment and further explore the customer, business, legal and technical benefits of SSI.”
“We are excited to be involved with the Accelerator Program which is helping us develop our strategic response to SSI market opportunities. With access to Evernym’s insight, tools and expertise, we are really able to speed up our learning about Sovrin and self-sovereign identity. And most importantly, we can rapidly develop solutions that solve real customer and business problems,” Ed Black, Director of Innovation at Barclaycard Payment Solutions, said.
Stablecoin Issuer Promises Full Audits of Euro-Backed Crypto Token
Stasis, a Malta-based issuer of stablecoins, has hired accounting firm BDO Malta to conduct quarterly and annual audits of its financials, including the euro reserves backing the startup’s EURS token.
The engagement aims to dispel any doubts that EURS stablecoins are backed one-to-one by euros. Many cryptocurrency investors and traders will be wary of any such claim by a stablecoin issuer, due to nagging questions around the dominant issuer, Tether.
Tether’s USDT tokens lost their parity with the U.S. dollar in a dramatic fashion in October, due to widespread doubts that the company held one U.S. dollar in bank deposits for every token in circulation.
More than a year ago, Tether reiterated its promise of regular audits to prove it held sufficient fiat collateral, but so far it has still not delivered. Rather it severed ties with the auditing firm Friedman LLP in January and instead produced documents prepared by a law firm in June and its bank in November, which vouch for the existence of sufficient deposits.
Apparently alluding to the controversy surrounding Tether, Stasis CFO Vyacheslav Kim said in a statement last week:
“The recent conversation around stablecoins has hinged on two things: compliance and transparency. By providing verification by a top accounting firm, in addition to EURS’ existing regulatory compliance under Maltese law, we’ve established EURS as a standout option for European investors.”
In addition to the audits, BDO Malta – a member of the BDO International network of accounting firms, which operates out of more than 160 countries according to its website – will “provide weekly cash reserve verification” of the fiat collateral behind EURS, Stasis said. The first such report was published Thursday. It makes clear that the document does not constitute an audit.
Stablecoin issuance is an increasingly crowded and competitive corner of the cryptocurrency sector, and a number of providers are aiming to reassure a skeptical market by publicizing their relationships with prominent accounting firms.
Within the past month Circle, which provides the dollar-linked USDC, has published an attestation of its dollar collateral prepared by Grant Thornton LLP; Gemini, which issues the USD-pegged Gemini Dollar, has done the same with an attestation from BPM; and Paxos, issuer of the dollar-linked Paxos Standard, has published an attestation from Withum.
Audits > attestations
Yet Stasis stands out by promising full audits.
Michael Shaub, who teaches auditing and accounting ethics at Texas A&M University, told CoinDesk that “I would take much more heart” from a full audit of a stablecoin provider’s financials, as opposed to a verification or attestation.
Explaining the differences between verifications, attestations and audits, Shaub said that an audit “is applied broadly to the financial statements” – including income statements, cash flow statements and balance sheets – while an attestation (of the sort Circle, Gemini and Paxos publish) “is limited to some narrow representation,” for example, that the requisite bank deposits existed at a moment in time.
“The level of assurance is very similar,” he said, but an audit provides important context that goes beyond an isolated snapshot: “You can reach more of a conclusion of, is that money likely to be in the bank tomorrow? Was it in the bank yesterday?”
A verification, meanwhile, provides far less context, and does not necessarily have to be prepared by a qualified accountant. Tether, as noted above, published a verification prepared by its law firm.
In a verification, the firm in question and its accountant (or lawyer) decide on a procedure, and the accountant carries it out as agreed; that contrasts with the rigorous standards an attestation or audit requires.
For example, Shaub noted, a verification does not necessarily indicate that the bank deposits aren’t simply a one-time loan, or being shuffled around between accounts.
Hard to get?
Stasis’ promised audits – the first is expected in Q1 2019 – are all the more notable since some issuers, and not just Tether, have claimed that audits are currently unobtainable in the stablecoin market.
Cameron Winklevoss, Gemini’s co-founder and president, said on Twitter in October that “there is no financial report framework [with respect to] to audit conformity [with] a stablecoin. So you can’t perform an ‘audit.'”
Instead, he continued, issuers must “rely on a 3rd party to attest to whether an assertion (that there is a 1:1 peg) is accurate.”
Even so, according to a Stasis spokesperson, “BDO Malta will perform full audits once a quarter, plus verifications every week.”
When contacted by CoinDesk, Sam Spiridonov, the audit partner at BDO Malta who signed Stasis’ first weekly verification, said the “audit will cover all the financial statements of STSS (Malta) Limited, including the euro deposits.”
In the meantime, Tether continues to dominate the stablecoin market, despite the controversy surrounding it.
With a market capitalization of nearly $1.9 billion, USDT is the seventh-most valuable cryptocurrency overall. Stasis’ EURS, by contrast, ranks 82nd, with a market cap of just $35 million, according to CoinMarketCap.
Bitcoin Trading Skyrockets on BitMEX, BTC Wallets Hit New Record
The current number of blockchain wallet users has surpassed 30 million, up from 28 million since September, despite the market downturn.
The number of blockchain wallet users worldwide has been growing steadily ever since Bitcoin’s inception in 2009 with no signs of fatigue.
Meanwhile, Bitcoin reached another milestone on Reddit. The active Bitcoin subreddit community r/bitcoin has reached one million subscribers.
On Google Trends, Bitcoin searches worldwide within the past 30 days have maintained their edge over pop stars Ariana Grande and Beyoncé.
Source: Google Trends
On Hong Kong-based crypto exchange BitMEX, trading volumes have reached nearly $2 billion within the past 24 hours with their Bitcoin futures product, XBTUSD, comprising $1.88 billion of the total, according to data from CoinMarketCap.
BitMEX, which has the strongest global crypto derivatives market, also reports nearly $1 trillion in crypto trading volume over the past 365 days and over $90 billion in the past 30 days.
Dash CEO: No Budget Problems Here
Bear season is taking its toll, and crypto companies are already shutting up shop. But Dash Core Group won’t be one of them, according to CEO Ryan Taylor. In a recent blog post, Taylor addressed the “severe breakdown of market confidence,” while reassuring investors that development for the sixteenth-largest cryptocurrency will not be affected.
The market crash hasn’t been good for anyone, but it’s particularly bad for projects that pay their bills in crypto. Dash Core Group, which is funded from mining rewards, pays its employees in the DASH equivalent of their salaries, denominated in USD. That means if prices fall low enough, the entire monthly budget might not be enough to pay for Dash’s development.
The decline has already caused a hiring freeze and delays to employee salary increases and retention plans, as outlined in budget updates earlier this year. In the Q4 budget cycle, “run rate compensation expenses” are chief among the proposal requests that are voted on by the Masternodes.
Meanwhile, Dash Core Group compensation was estimated at 2,860 DASH for December, which CFO Glenn Austin said “will allow us to sustain our current run rate while still building up our buffer.” The Jan. 1, 2019 budget cycle compensation figure is 3,185 DASH for core members. But at approximately $70, the Dash price has been more than slashed in half since a month ago, placing more of a spotlight on the buffer.
Is The Bitcoin Cash Hash War To Blame?
Taylor says in the post that “we will eventually hit a market bottom” and hopes that “we already have.” He goes on to blame the hash war that unfolded between Bitcoin Cash and Bitcoin SV and the ensuing FUD tied to “blockchain security,” saying it “seems to have triggered a new wave of skepticism” and describing the damage as “market-wide” and “severe.”
Dash itself was forked from Litecoin by founder Evan Duffield in an attempt to introduce features like privacy to the code, a focus that has since expanded to speedier transactions and greater scalability.
Taylor addressed concerns voiced by the community surrounding Dash Core Group’s ability to sustain Dash, which he assured is better than the fate of other projects such as ETCDEV and Steem, both of which have suffered at the hand of this year’s bear market. Taylor said:
DCG is not at risk of shutting down anytime soon, or of any significant cuts in staffing levels in the near term.
He pointed to a cash buffer, which is -hopefully- deep enough to last through the coming winter. Although he did not state any numbers, the size of DCG’s cash buffer was estimated at $1.79M at the time of DCG’s most recent quarterly earnings call on November 12th.
Dash founder Duffield was reportedly never a big fan of ICOs, and the project has taken the road less traveled by not bolstering the staff during the boom times. That frugality has been a saving grace as DASH shaved more than 90% of its value from last year’s peak.
Taylor outlined Dash’s unique budgeting system which “limits the monthly run-rate” and “caps our long-term spending,” and also expressed a frustration amid a “disconnect between price and adoption trends. “
Dash Budget Marches On
The Dash network has a total monthly budget of 6,177 DASH, funded by a DAO-controlled treasury. With the DASH price currently hovering at $74.21, according to CryptoCompare, that gives the Dash project a monthly budget of $458,395. Dash Core CFO Glenn Austin said on the Dash forum:
We expect to request 60% of the available treasury funds for this budget cycle.
That means they will request no more than approximately $275,037. Based on the latest monthly budget cycle, 3,750 DASH has been requested via a variety of proposals. So far, 1,376 DASH has been allocated for passing proposals while 2,374 DASH reflects proposals that have yet to receive sufficient votes with a Dec. 29 deadline looming.
Dash supply is capped at 22 million, 8 million of which are reportedly in circulation. It’s a bit of a Catch-22, however, considering that it’s the project’s proposal system that, while keeping Dash afloat, has drawn criticism from those who believe that the Masternode governance system fuels centralization.
This isn’t the first time Taylor has had to go on the defensive. The CEO has already faced criticism for spending treasury funds too liberally, with at least one masternode owner calling to remove him from leadership.
It’s a stigma that the project might not be able to shake from those who are not drinking the Kool-Aid, but then again the Dash Core Team isn’t looking to convince the naysayers, anyway.
Chile’s Finance Minister Comments on How Cryptocurrency Regulation is Progressing
Filipe Larrain, Chile’s Minister of Finance, recently stated that several governmental entities are “making progress” on creating crypto regulation. He added that the finance ministry is collaborating with the country’s central bank and Financial Stability Board to develop a balanced framework in the industry.
The establishment of a regulatory framework is part of a governmental project to ensure that there are legal definitions so that the regulations mean something. He also stated,
“We are aware that it is important to move in this direction. But all countries in the world are facing similar problems, and there is no magic want to solve them. We are exploring the best solutions to see how regulate this brand new phenomenon.”
A few months ago, after the closure of crypto-business accounts in several banks, Larraine mentioned that the legal framework would be beneficial to normalize the situation. However, since his statements, no legislation has been proposed or passed. As for any judicial movement, the country’s supreme court issued a decision annulling a lower court’s decision that protected crypto exchange Orionx and to ensure that a bank reopened the exchange’s accounts. The court stated that cryptocurrencies do not have “physical manifestation and no intrinsic value.”
$170,000: Bitcoin Investor Fails to Backup Wallet, Loses Access to Funds
Kerem Albayrak , a resident of Istanbul, Turkey, claims he lost access to $170,000 in digital currency as he did not properly back up his recovery phrase to his cryptocurrency wallet.
In a Reddit post , Albayrak explained in detail what happened. He first noted that he bought an iMac for his new office and that he had created a new blockchain wallet so that he could transfer his funds from an offline wallet (which he said was “scaring” him because it seemed to have technical issues).
After setting up his new wallet, Albayrak said he went on a vacation and that when he came back, many people started telling him that his iMac was too big and took up a lot of space. So, the Turkish citizen took the computer back to the store from where he had bought it. When he asked if he could exchange it for a MacBook (recommended by his colleagues), the store represenative said they don’t do exchanges and he’d have to return the iMac first.
Improper Wallet Backup
The store employee also reportedly told him there were only 4 hours left for him to return it as the company’s 15-day return policy was about to expire. Albayrak said that he then rushed home to pack up his iMac and quickly returned it to the store, without properly checking and backing up the password and SEED to his wallet.
As explained by Albayrak:
My wallet was newly transferred onto a Blockchain wallet created on the iMac after I had an incident with an offline wallet and got scared. I used [an] auto generate password by Apple with no iCloud to backup the keychain. When creating [the password], I took a screenshot on the iMac of the recovery phrase which is also now gone.
Formatted Hard Drive
After returning the iMac and going home, the businessman realized at night he had just returned the computer without transferring the screenshot of his generated password to a device or email which he could still access. He then called Apple to see if someone could help him.
Albayrak also said he went to back to the store (where he had returned the iMac) 2 hours before it opened to hopefully catch the delivery van, which usually takes the products back to China where they are manufactured. However, after not being able to track down the delivery van, Albayrak entered the store and asked the manager if his computer was still there.
The manager said it was still at the store, but as part of standard return policy procedures, the iMac’s hard drive had been formatted, meaning that Albayrak’s recovery phrase and password were gone.
Importance Of Properly Backing Up Wallets
Expressing his frustration at what happened while also reminding people that it’s very important to properly backup their wallets, the Istanbul resident wrote:
It’s not a joke. You don’t realize sh*t happens until it happens don’t be that guy in my position. Please copy your backup codes and secure your wallet … it’s not a good feeling. It’s not even about losing 170K … it’s about losing a wallet with that much money in BTC. It’s there but you cannot use it. When I start seeing the price go up is when it’s going to piss me off.
Notably, Albayrak has offered a 40% reward to the person that can help him find a way or “gives [him] an idea” as to how he can go about “restoring [his] wallet.”
Australian Financial Review
Government departments the country over manage thousands of databases. A lot of it is our private information. Governments do not have an enviable track record at keeping information private, let alone up to date. Yes, governments are trying new ways to innovate. However, stories of breaches and errors are increasingly making the news here and abroad.
The lack of a central, trustworthy repository means that some databases are up-to-date while others are not, and that government processes can be left to become slow and tedious.
All across government, from Births, Deaths and Marriages to Vicroads, from the Department of Immigration to the Australian Tax Office, time is wasted trying to find information and reconcile incomplete data sets. These inefficient processes are expensive both for the state, and for the people and businesses that rely on such information being accurate and readily available.
To tackle the problem of widely dispersed, incomplete databases, the Australian government is rolling out Govpass. Over the next year, as many as eight high-volume government services will pilot the digital identity system. It will involve more than 500,000 Australians. Once fully rolled out, it will be safer and easier than ever before for Australians to prove who they are when dealing with the government.
A core component of the Govpass system will be blockchain technology. The advantages of blockchain in this situation are manifold. All arms of government will be able to do away with their own databases, and instead can access and update a single identity database shared by all. This will dramatically reduce the armies of public servants often required to oversee what can be more efficiently and competently managed by technology.
Blockchain’s application in government could soon be used by IP Australia to manage patent registries and improve the notoriously illiquid patent market. Similarly, blockchain has great potential for managing land registries, as is already done in India. The Department of Agriculture and Water Resources is investigating the possibility of using a blockchain platform for water trading in Australia’s $16 billion water market.
The common theme of all civic use cases of blockchain technology around the world is that they enable streamlining of government and the removal of red tape. Blockchain’s inherent trustworthiness and immutability eliminates the need for endless numbers of bureaucratic middlemen managing endless numbers of incomplete databases. The potential savings in public expenditure are enormous.
As Liberals, we are relentlessly determined to make government not only smaller but smarter. Where we see an opportunity to make government smaller, faster and more efficient, we must take it. Blockchain is an opportunity to do just that.
HTC’s Blockchain Phone Selects Brave as Default Browser
HTC, a Taiwan-based company which recently released a new blockchain-compatible mobile phone, has announced Brave as the device’s default internet browser.
Exodus, as the phone is called, is supposed to be the company’s second wind. HTC was founded in the late nineties as a laptop manufacturer, and was one of the first to produce touch-screen phones. However it was more or less pushed out of the market by the subsequent success of Google and Apple, and sold half of its workforce to the former in September 2017.
The Exodus was was released into the market in October. CEO Phil Chen said at the time that blockchain is a “new paradigm for smartphones”.
Charlie Lee, creator of Litecoin, announced that he would be working as an adviser to the development team in July. Naturally, at the same time the company revealed that the phone would be supporting Litecoin.
Brave also has its own cryptocurrency – the BAT, of which the firm sold $35 million worth within 30 seconds in May 2017. BAT stands for ‘basic attention token’ and it is central to Brave’s business idea – selling advertising to customers who are willing to put up with it.
The token was listed on the Coinbase exchange, Coinbase Pro, in July.
1day ago, 9 Dec, Sunday
Analyst: Crypto ICOs in Crisis, Running Out of Money With No Products
In the bull market of 2018, initial coin offering (ICO) projects in the crypto market raised tens of millions of dollars on average from investors in the public market to create decentralized applications (dApps) and systems.
Fast forward 12 months, most of the ICO projects that currently exist in the sector have either have no working products to show or an insufficient number of users to justify their valuation.
According to Martha Bennett, a principal analyst at Forrester Research, ICOs have struggled to find viable products with business models that failed to account for the occurrence of a potential bear market that could force projects to face a funding crunch.
ICOs have raised large sums of money in the past year with several ICOs raising up to $4 billion from the public market. Yet, based on the data provided by DappRadar, apart from IDEX and ForkDelta, none of the dApps in the market have more than 600 users.
Many of the top 100 cryptocurrency projects in the market, even those that have active developer communities and strong technologies like Augur, 0x, Decentraland, ICON, Wanchain, and Polymath, have found it to be difficult to secure an active user base and maintain a high level of user activity on decentralized systems.
The abovementioned projects have working products in place that are currently utilized by users in the Ethereum ecosystem for various use cases. For instance, Augur saw its daily volume spike up to nearly $3 million during the recent U.S. midterms.
But, the majority of ERC20 tokens and ICOs in the top 100 cryptocurrency rankings do not even have a working product to show that is actively used by users on a regular basis.
Considering the underwhelming performance of most dApps and ICO projects in the space, Forrester Research analyst Martha Bennett said that this year’s bear market has been a wake-up call for investors that funded multi-million dollar projects without working products and in many cases, a clear long-term vision, strategy, and solid business model.
“Sooner or later, this would have led to a contraction anyway. The crypto crash acted as both catalyst and wake-up call.”
Several large-scale companies like Coinbase and ConsenSys have also laid off a relatively small portion of their employees in the past two months,affected by the bear market and dropping prices of digital assets.
In October, Coinbase, one of the largest fiat-to-crypto exchanges in the global market, laid off 15 members of staff. This month, ConsenSys is said to have terminated the contracts of 13 percent of its employees, which is estimated to be around 130 individuals.
How to Move Forward
Lex Sokolin, the global director of fintech strategy at Autonomous Research, said that the entrance of new investors and capital could end up counterbalancing the sector in the months to come, and for commercial companies with strong profit margins like exchanges, that certainly could be the case.
“I’d be comfortable saying that the pricing pressure on digital assets in 2018 is likely to lead to 25-50-percent shutdowns and layoffs for current projects based on historical comparisons. However, the pace of new entrants and capital could counterbalance this contraction and still grow the sector overall.”
However, for ICOs, unless projects begin to start developing products that can actually be utilized by both cryptocurrency and casual users, it will be challenging to recover from the current state of the market.
New Report Updates Cryptocurrency Exchange Ratings
A quarterly ratings report has upgraded the score previously given to seven cryptocurrency exchanges, while downgrading four. It has also added seven new exchanges, rating them on such metrics as trading volume, security, and compliance. In related news, Crypto Exchange Ranks (CER) has begun tracking the hot and cold wallets of exchanges as part of a drive to champion greater transparency.
Okex Downgraded, Bithumb Upgraded
Cryptocurrency exchange ratings, much like cryptocurrency ratings, are highly subjective. Any attempt at rating and ranking the constituents of a particular set using specific benchmarks is bound to cause controversy. Nevertheless, quarterly ratings reports continue to grow in popularity and in number while shining the spotlight on various verticals within the cryptocurrency ecosystem. Tokeninsight’slatest report tracks the progress of crypto exchanges over the past three months, amid difficult market conditions.
Tokeninsights’ exchange rating criteria
Unique visitors have dropped across the board during the last quarter, with the sole exception of Bithumb, whose traffic and aggregated score has risen. Okex, by way of comparison, has seen its weighted score fall, exacerbated by the fact that it “has repeatedly unilaterally changed its trading rules during our rating period, including data rollbacks and modifying its contract delivery rules.” The report continued:
In the case of the BCH hard fork, Okex delivered the last transaction price of BCH contract ahead of schedule at 16:05 p.m. on November 14, 2018 (GMT+8), and issued an announcement only one hour in advance, causing unnecessary losses to a large number of investors.
Hitbtc, Kraken, and Kucoin all saw their ratings upgraded by Tokeninsight, while Poloniex and Gemini were among the exchanges given ratings for the first time.
Trans-Fee Mining Exchanges Score Poorly
Transaction fee mining exchanges, often linked with wash trading and fake volume, have scored poorly in Tokeninsight’s report. Hong Kong’s Fcoin exchange is one such casualty, its score lowered, with the report noting how “Transaction mining trends once brought a large amount of traffic to the platform, due to the notion that the vast majority of transactions of transaction fees or dividends were free, and transaction volume has dropped significantly in the past three months. In terms of compliance, Fcoin has lagged behind in development and has not obtained any license of relevant regulatory agencies.”
The CER dashboard, showing hot and cold wallet balances for Bittrex.
Exchange analytics service Crypto Exchange Ranks has been instrumental in uncovering fake volume on Asian platforms such as Fcoin, Coinbit, and GDAC. Its latest initiative involves launching a crowdsourced framework for crypto exchange transparency. CER is seeking the help of “transparency hackers” to help it identify and then track the hot and cold wallets of all leading cryptocurrency exchanges.
The CER dashboard is already populated with wallet balances for several major exchanges. Results can be filtered according to the size of the exchange wallet, and clicking on the wallet balance will reveal the distribution between hot and cold wallets, where such information is available. Eventually, CER hopes to add this data for every exchange, and in doing so to bring greater transparency to the sector through a combination of self-reporting and public diligence.
Japanese Police Statistics Show Significant Jump In Suspicious Crypto Transaction Reports
Numbers released by the Japanese National Police Agency (NPA) this week show a sharp uptick in the number of suspicious transaction reports from cryptocurrency exchanges in 2018. Police received 5,944 reports of suspicious transactions from January-October of this year, according to the data.
The number was 669 from April to December of 2017. New rules came into force last April that obligated exchanges in the country to report suspicious trades.
Reporting System Has Been Embraced
One NPA official said the suspicious trade reporting system “has been embraced by the industry through guidance from the Financial Services Agency.”
Police indicated suspicious activity noted in the received reports included the use of the same photo by different people trying to verify identity, the opening of multiple trading accounts from the same IP address, and the submission of out-of-use phone numbers for registration purchases.
Japanese daily newspaper The Mainichi reported law enforcement in the country have been using the reports in various crypto-related investigations.
In a recent report, the nation’s National Public Safety Commission wrote how crypto transactions are vulnerable to abuse since cryptocurrencies can be sent across borders quickly and in a relatively anonymous manner. The Commission also wrote it was hard for authorities to track criminal proceeds since crypto regulations are different across countries.
Continued Crackdowns On Crypto Evasion
The statistics about the suspicious transaction reports come about the same time Japan’s National Tax Agency announced new anti-money laundering regulations targeted towards crypto businesses.
CryptoGlobe reported that the stipulations give the Agency authority to ask for customer information from cryptocurrency gateway businesses for tax-related purposes. The NTA is reportedly rolling out a system to streamline the information gathering process that will be fully up and running by April 2020.
Just a few days earlier, reports came out the Japanese Financial Services Agency (FSA) would be rolling out new ICO regulatory frameworks due to a number of related scams. CryptoGlobe noted that the FSA will be submitting draft proposals in January’s parliamentary session in an effort to introduce new ICO regulations.
Crypto Exchange Gemini Lists Bitcoin Cash with NYDFS Approval
Crypto exchange Gemini has announced that it now supports trading and custody activities for Bitcoin Cash (BCH), effective this weekend, with full trading slated to begin on Monday.
With the announcement, the exchange platform founded by bitcoin billionaire twins Cameron and Tyler Winklevoss now supports five cryptocurrencies, namely Bitcoin (BTC), Ether (ETH), Litecoin (LTC), Zcash (ZEC), and Bitcoin Cash (BCH).
In the announcement, Gemini specified that its Bitcoin Cash support is limited to BCH ABC under the BCH ticker. As a result, all BCH withdrawals from Gemini will only be valid on the ABC blockchain, and any funds sent to the platform over the Bitcoin SV blockchain will be invalid and irrecoverable. According to Gemini, while it will not support SV in the meantime, it is evaluating the possibility of listing SV in the future, and it reserves the right to choose to enable support for it.
Further nailing its colours to the BCH ABC mast, Gemini further said that the changes introduced by Bitcoin Cash have laid a groundwork for “further transaction throughput enhancements,” which was a major point of disagreement that led to last month’s contentious fork.
An excerpt from the announcement reads:
“We have worked closely with the New York State Department of Financial Services (NYSDFS) to obtain approval to offer Bitcoin Cash trading and custody services for our customers, and we are excited to add this cryptocurrency to the Gemini platform — the world’s most regulated cryptocurrency exchange and custodian. We are proud to provide our customers with a safe, secure, and compliant method to buy, sell, and store cryptocurrency as we build the future of money.”
In September, CCN reported that sources close to the company indicated that it was considering applying for regulatory permission to open a crypto exchange in the UK. The following month, the company announced the hire of former International Securities Exchange COO Jeanine Hightower-Sellitto as its new Managing Director in charge of operations.
$80 Million ICO TenX Founder Linked to Pyramid Scheme: Report
TenX president Julian Hosp has reportedly been implicated in connection with Lyoness, an Austrian discount shopping service that has been declared an illegal pyramid scheme in Norway, Austria, and Switzerland.
After a summer of Chinese whispers on the internet alleging that he was involved in Lyoness before becoming the face of TenX, a video has emerged that appears to show Hosp presenting an online tutoring session used to enable viewers to recruit new participants in the pyramid scheme. The news was first reported by Breaker.
The emergence of the video, if authentic, is particularly damaging not only because of the reputational harm that TenX stands to suffer, but also because the contents of the video point to a damning lack of integrity and a willingness to promote dishonest and underhanded tactics in pursuit of profit. Among the pointers mentioned by Hosp in the video are exhortations for users to exploit relationships with friends and family because they “cannot evade” them, and to hide the real reason for requesting meetings with them. The video also includes tips for evading “annoying questions” about how Lyoness works.
Reputational Damage to TenX
It will be recalled that TenX raised over $80 million in its ICO last year on promises to “make cryptocurrencies spendable anytime anywhere” by connecting bitcoin to the real world with a Visa debit card and banking license. According to the TenX whitepaper, its platform native PAY token would entitle holders to dividend payments generated from use of its cards – a promise which has since been jettisoned. Since 2017, the platform’s basic promise has not been delivered on, with users still waiting for the promises bitcoin-linked debit cards more than a year later.
Questions are increasingly being asked about the willingness or capacity of TenX to fulfill its substantial promise, with some concluding that the company is in fact yet another iteration of an ICO exit scam.
1/ I think it’s time to revisit TenX today. PAY token is now 93% from its all time high. People that bought during the ICO are now down ~30%. TenX is a company that never keeps the promises that it makes. pic.twitter.com/88Wm91WTMA
— Larry Cermak (@lawmaster) November 17, 2018
According to reports, Hosp had previously been successful in censoring such material linking him with Lyoness (known as “Cashback World” in the United States), particularly before the TenX ICO. Twitter accounts that shared material discussing his involvement in Lyoness were quickly suspended from the website, and even a message board created to catalogue complaints about Lyoness has been commandeered by the company, redirecting to its U.S. website instead.
Excerpts of Hosp’s tips from the video go as follows:
“Never forget, it is not about telling the exact 100% truth…if you follow this [method], you can earn incomes in an extent that it’s not imaginable to you at this moment…you will never run out of contacts if you follow some guidelines.”
Apart from reputational damage however, this is unlikely to bother Hosp too much because multi-level marketing schemes are not a regulatory priority in the U.S. What will bother him a whole lot more however is the SEC’s current affinity for prosecuting ICOs that sold unregistered securities during the height of the ICO boom last year, one of whom is TenX.
CCN has reached out to TenX for comment and will update this article upon receiving a reply.
Next-Gen BUIDLers: The 8 Teams Working on Ethereum 2.0
“We don’t want to reinvent the wheel when building [ethereum] 2.0.”
Speaking to the complementary efforts of developers working on two separate upgrades to the ethereum blockchain – one dubbed ethereum 2.0 and the other dubbed ethereum 1x – Raul Jordan insists upgrades to be included in ethereum 1x on a shorter time horizon would have benefits to ongoing research for ethereum 2.0.
Jordan is the co-lead for one of eight different developer teams currently building software clients for ethereum 2.0.
(As background, clients are software implementations usually written in differing programming languages that users deploy to connect to and participate in the ethereum network.)
Maintaining that the “incremental enhancements” being proposed within ethereum 1x don’t affect the blockchain’s long-term roadmap, Jordan told CoinDesk:
“I think both groups are fairly orthogonal but we must at least be aware of what each is implementing.”
Presently, the technical guidelines also called specifications for both upgrades are still very much in the works.
Having been discussed in earnest among ethereum developers only in the last couple of weeks, ethereum 1x is intended to be an intermediary upgrade that focuses on enhancements to the current ethereum network.
Ethereum 2.0, on the other hand, features a more ambitious agenda that dates back to 2014 and consists of fundamental changes to the blockchain platform.
Known in its early days under project name “Serenity,” the current specifications for ethereum 2.0 can be summarized as a combination of three main components:
A switch to PoS from the current energy-intensive consensus protocol known as proof-of-work (PoW)
Implementation of a network-wide scaling solution called sharding
A revamping of the ethereum virtual machine (EVM) – the engine responsible for deploying decentralized applications (dapps) on the blockchain – to run on new programming code known as WebAssembly (WASM).
And while one of these components – namely ethereum’s implementation of WASM – has the potential of being tested in the earlier roadmap for ethereum 1x, the majority of the work to build out ethereum 2.0 is still ongoing as a separate project.
And that work is being carried out by eight different teams spread out across the globe.
1. ChainSafe Systems
Based in Toronto, ChainSafe Systems is a blockchain research and development startup offering consulting services to a number of different ethereum-based projects including Shyft, Bunz, Aion, and Polymath.
Motivated by a desire to “contribute to something bigger,” project lead at ChainSafe Mikerah Quintyne-Collins told CoinDesk:
“For me, developing ethereum 2.0 was my way to make a mark on the future of the internet.”
Privately funded and seeking additional support through the Ethereum Foundation grant program, Lodestar according to Collins is envisioned to “bring a whole host of web developers to the [ethereum] ecosystem.”
“All of these programming languages have their own communities. The whole community might not want to contribute but they’re big enough that parts of it will want to contribute and build on top of ethereum,” said Collins.
Even suspecting development work to help other blockchain platforms progress, Collins emphasized that in her view ethereum 2.0 is not about ensuring ethereum’s future as “the main blockchain,” saying:
“It’s not about who’s going to be the next big thing. It’s more about trying to make these systems work. Rushing it just so we can catch up with another supposed ethereum killer defeats the purpose of working on this.”
“Our goal is to bring enterprises to the mainnet. We want to do that by creating software that is easier for enterprises to adopt.”
That’s Faisal Khan, strategy and business development head for blockchain protocol engineering group, PegaSys.
Fully supported by Consensys – the self-proclaimed “venture production studio” of ethereum headed by ethereum co-founder Joseph Lubin – PegaSys is building out ethereum 2.0 specifications for an existing ethereum Java client called Pantheon.
Unveiled recently at a gathering of ethereum developers in Prague, Pantheon uses an open-source software license called Apache 2.0 to enable businesses building products on top of the ethereum platform to monetize their intellectual property.
Speaking to CoinDesk, Khan highlighted that extending support for ethereum 2.0 specifications meant close collaboration with Ethereum Foundation researchers and other client development teams.
“There’s a lot of touch points. There’s a weekly call. There’s a research forum, ETH Research. There’s a Gitter channel. The communication is pretty frequent. Obviously, there’s crypto Twitter. It’s pretty rich the conversation between any of the [ethereum] 2.0 teams and the Foundation,” said Khan.
Adding that, ethereum 2.0 would kick-start a new “cycle of network effects, dapp development and user growth” on the platform, Khan reiterated that the biggest need at present for the project was “more people involved.”
Launched last October, Harmony is ethereum’s original Java client formerly maintained by a group of independent developers called Ether Camp.
Now called simply the Harmony team, these group of developers were recently awarded $90,000through the Ethereum Foundation grants program to build out specifications for ethereum 2.0.
Subsidized by the Ethereum Foundation, Harmony is expected to continue running as an alternative Java client to the enterprise-focused Pantheon.
Separate to the Apache 2.0 software licence underpinning Pantheon, Harmony operates under a General Public License (GPL) designed to ensure any implementations of the code remain “free software and stay free software,” as described in the official GPL guide.
Likening the project to “building a new internet,” Harmony developer Mikhail Kalinin told CoinDesk:
“The biggest challenges are staying on top of all changes in the research area and following the progress of every part of the work. The scope of it is huge.”
4. Parity Technologies
Co-founded by former Ethereum Foundation chief of security officer Jutta Steiner, Parity Technologies is a blockchain infrastructure company responsible for maintaining the second most popular ethereum client on the platform today.
The name of the client called Parity Ethereum is self-proclaimed to be “the fastest and most advanced ethereum client.”
As detailed on the official Wiki page, Parity Ethereum is programmed in Rust and built for “mission-critical use,” meaning fast synchronization speeds and maximum operation uptimes.
Speaking to renewed efforts to build a ethereum 2.0 client within the organization, Head of Public Affairs for Parity Peter Mauric explained ethereum 2.0 was really the “production-ready” version of the ethereum blockchain.
He told CoinDesk:
“Broadly speaking, I believe that ethereum as it exists today is very much in beta … Ethereum 2.0 is going from this experimental project that Vitalik launched just a few years ago to a more production ready blockchain protocol.”
5. Prysmatic Labs
Building out the first implementation of ethereum 2.0 in programming language Go, Prysmatic Labs launched this January with the goal of helping the ethereum blockchain reach scalability.
Speaking about the endeavour, team lead at Prysmatic Labs Raul Jordan told CoinDesk:
“Ethereum 2.0 is a system that is scalable to the needs of a global computer…What this means is that it will be able to handle the load of real world necessities…Anything from something simple to a completely immense financial system built on top of it.”
Named Prysm, the ethereum 2.0 client will act as a counterpart to the blockchain’s current most popular client implementation also written in Go called Geth.
Not seeing client development as a competitive process, Jordan highlighted that multiple different client implementations is a great necessity on the ethereum blockchain.
“The reason is that when you’re working on a blockchain like this, you want as much decentralization of implementations. So for example if the ethereum blockchain is running on Prysm and there’s a bug in Prysm, everyone can just switch to [another client]. You have options,” said Jordan.
Still, likening the endeavour to building “a public good,” Jordan highlighted support for development work was largely by donation from both the Ethereum Foundation and other private donors.
Receiving roughly $1 million in support to date, Jordan told CoinDesk one of the biggest challenges of building out an ethereum 2.0 client was making sure work corresponded “closely with the research.”
“There are new ideas coming out every week, every day, and we’re basically building on a ever changing specifications… So I think one of the biggest challenges has really been multitasking between developing and also making sure that the research is good and we evaluate options moving forward.”
6. Sigma Prime
Founded in 2016, Sigma Prime is an information security and blockchain technology consulting company.
Recently awarded a $150,000 grant from the Ethereum Foundation, the company is building an ethereum 2.0 client called Lighthouse written in programming language Rust.
Being the second client implementation in Rust next to Parity, co-founder of Sigma Prime Paul Hauner told CoinDesk that he didn’t expect there to be “any fundamental differences” between the two products.
Emphasizing that a duplication of work was actually “really desired in a blockchain,” Hauner explained:
“Software has bugs. So, if everybody runs the same client and there’s a bug, everyone goes down. If there’s this diversity of clients, they’re most likely going to have different bugs. One client goes down that’s fine. The rest of the network still stays up.”
And speaking to the importance of the ethereum 2.0 upgrade in general, Hauner added that not only would users notice “a huge increase in transactions in per second” but also significant environmental gains under a proof-of-stake consensus protocol.
“Personally, I feel people are going to use it and it’s going to work. In terms of the actual technology, I don’t have any concerns about is it feasible. Is it bulletproof at this point in time? Absolutely not. It hasn’t been built,” said Hauner.
A messaging platform and mobile browser specifically designed to engage users on the ethereum blockchain, Status unveiled this August active development for an ethereum 2.0 client called Nimbus written in programming language Nim.
Funded in part by a $500,000 grant from the Ethereum Foundation, the goal of the project as highlighted on the official website is “to drive mass adoption of ethereum” by optimizing Nimbus for performance on “resource-restricted devices.”
As such, leveraging the lightweight capabilities of running Nim code, Nimbus is expected to be ethereum’s first mobile client connecting smartphones devices and other handheld electronics to the blockchain platform.
With eight core contributors to the project, Status highlighted in a blog post a few months ago that it is looking for additional developer support.
“We are entirely open source and encourage contribution from those who want to get involved,” wrote head of research development at Status Jacek Sieka.
In addition, speaking to CoinDesk, Sieka added that he foresaw development work for ethereum 2.0 being rolled out in multiple stages, with a suspected test network for one of the first components called the beacon chain coming some time in the next year.
“That being said research is ongoing and any timelines are usually in flux but from an end user perspective, a year, two years is a reasonable timeline to expect for [ethereum 2.0] to become generally useful,” said Sieka.
Last but not least, Trinity is a current ethereum client written in programming language Python.
Championed to be the new standard Python implementation for ethereum, Trinity features upgraded code to the now dormant PyEthApp originally authored by founder of ethereum Vitalik Buterin.
Having launched this year in a preliminary alpha phase, Trinity is comprised of six developers including Merriam all except one of whom are contracted to work by the Ethereum Foundation.
Expected to build support for ethereum 2.0 specifications as well, lead architect for Trinity Piper Merriam highlighted developing “at the boundary between research and implementation” was what he did best.
“I like the application of theory more than the theory. Protocol research is neat but implementing the protocols is more inline with what I’m good at,” said Merriam.
Adding that the work was really “only just getting started,” Merriam likened the process of ethereum 2.0 client development as putting together the pieces of “a puzzle.”
A puzzle requiring many hands, the collective work of all eight teams are expected to mutually reinforce each other and secure the future of the ethereum blockchain.
Merriam told CoinDesk:
“By having many implementations of any protocol … we can derive confidence that the written definition of the protocol is accurate [and] that the individual clients are correct.”
Bithumb Launches Voting Platform to Screen New Cryptocurrencies
Major South Korean cryptocurrency exchange Bithumb has beta launched a public voting system for screening new coins to be listed on its exchange. The platform, Pickthumb, aims to boost transparency and fairness in Bithumb’s listing process. Five coins are currently being evaluated with the current voting round ending in nine days.
Bithumb’s Voting Platform
One of South Korea’s largest cryptocurrency exchanges, Bithumb, announced on Thursday the beta launch of Pickthumb, its public voting platform for coins vying to list on the exchange. The aim of this new platform is to strengthen the “transparency and fairness” of Bithumb’s cryptocurrency evaluation and listing process, the exchange detailed. According to its website:
Pickthumb is a platform for screening excellent coins based on your fair evaluation … users can directly evaluate, validate and vote on cryptocurrency projects that will be listed on global cryptocurrency exchange Bithumb.
Bithumb explained that any registered users can participate, adding that members can actively give their opinions and “exert more influence” on coins to be listed on the exchange. Going forward, Bithumb says it “will try to promote a healthy cryptocurrency ecosystem that investors can believe in.”
Pickthumb’s website currently lists five crypto projects in its first round which has nine days left. Each round lasts two weeks. At the time of this writing, there have been 41,778 voters and a total of 94,983 votes.
The five projects are Rom, Amo Blockchain, Ttcprotocol, Olivecoinole, and Contentos.
Users can vote for or against projects in each round. Coins attracting a large number of downvotes can be disqualified from listing consideration. After each voting round has ended, Bithumb will conduct an internal review of the winning project. According to the announcement, members who vote for the winning project will receive an airdrop of the winning coin.
Penalties for Vote Manipulation
On Friday, Pickthumb published a notice about how it will handle vote manipulation. The notice reads:
Pickthumb is constantly monitoring the voting situation 24 hours a day for fair voting.
In the event of unfair voting, the cryptocurrency project identified with fraudulent activity shall be immediately excluded from the voting round, the notice details.
Furthermore, activities designed to manipulate votes can result in user accounts being permanently suspended. They include impersonating others to vote, buying votes, selling votes, and motivating or recommending others to vote in favor of a project.
Pickthumb’s website states:
Any act that requires money (or coins) for the benefit of a candidate listed for voting is a fraud.
Australian Company Issues Loans Backed by Cryptocurrencies
A Melbourne-based company is now offering crypto-backed loans. Helio operates under an Australian Credit License (ACL) issued by the Australian Securities and Investments Commission (ASIC). In the current bear market, cryptocurrency holders can borrow fiat money and keep their digital coins for better times.
Helio Lends Fiat Against Crypto as Collateral
Helio Lending accepts four major cryptocurrencies as collateral. The platform currently supports bitcoin core (BTC), ethereum (ETH), litecoin (LTC), and ripple (XRP). It offers loans for up to 48 months and with an APR of between 17 and 24 percent, depending on the value of the collateral.
Customers can choose between 30, 40 and 50 percent loan-to-value (LTV) ratio. For example, a 10,000 Australian-dollar loan with a 30 percent LTV would require the borrower to pledge 7.19 BTC as collateral. In this case, the APR would be 17 percent and the monthly payment 350 Australian dollars (around US $250).
Helio’s website has a calculator that can produce different loan configurations. The minimum amount that can be borrowed is set at 1,000 Australian dollars. The application process starts with providing a valid email address. To complete signup, applicants should follow the confirmation link sent by the platform.
Credit License Secured
According to Helio’s founder, John O’Shea, his company is the first licensed entity in Australia to offer crypto-backed loans. He believes there’s a massive market for digital assets in the country. Some estimates suggest that Australians perform cryptocurrency transactions worth around $2.8 million daily.
Speaking to Businessbuyinvest.com, O’Shea stated there are currently not enough service providers and companies willing or able to support the growing market and to loan against crypto assets. That’s why he sees an opportunity to “capitalize on something that is so highly sought after, yet so underserviced.” The entrepreneur explained:
We provide finance to both individuals and businesses through cryptocurrency asset-backed lending. This means that clients who hold bitcoin, ethereum, litecoin or ripple are able to use their assets as collateral for loan financing.
Unlike traditional lenders, Helio can rely on the digital assets transferred by its customers to a secured collateral wallet. In the event of a default, the company can sell the coins to cover the losses. At the same time, Helio’s customers can benefit from the protection provided by ACL and ASIC laws and regulations.
According to Australian media reports, Helio Lending has obtained its credit license by acquiring another company that held one, Cashflow Investment. The ACL license will allow Helio to offer its clients even more favorable terms in the future.
“This is my third crash in crypto-market, and I am not phased by it”- Ripple’s Asheesh Birla
In an interview with PCMag media, Asheesh Birla, Senior VP of Ripple’s Product Management discussed the cryptocurrency mechanism. We have seen that Ripple is constantly on its way to building on-demand decentralized products such as xRapid, xCurrent, xVia, RippleNet and more. During the discussion, Asheesh heads up explaining the difference between cryptocurrency and blockchain. He began talking about the cryptocurrency regulation, the goal of Ripple’s cross-border payments along with the future of decentralized apps.
Ripple’s Price Factor
Since the bear market battle between XRP and ETH has taken place several times these days, Asheesh Birla’s first talk began with the question regarding factors affecting the price of Ripple’s day-to-day operations. He said that they don’t think about the day-to-day price factor rather looking at the longer market term. As Ripple’s principal, he advises the other crypto project must think about the long-term than considering the market for day-day volatility.
He explains that;
This is my third crash now in the crypto-market, and I am not phased by it. The flip side is that sometimes you crash and take out all the folks who are not focused on solving real problems and real use cases. And, I think you are going to see some really interesting companies come out of this next downturn.
Blockchain Projects Are More likely Built on Google Sheet
He strongly believes in the volume and liquidity to make the digital app noticeable. During the talk about how blockchain companies separating the coins from technology, he explains that the key of blockchain is to provide a 10x better experience and if not ‘do not use blockchain’ he advised. Moreover, he argued that some of the projects that claimed to be on blockchain technology are not essentially working on it. Rather, projects like blockchain tourism appear as Google Sheets and ‘not a sophisticated decentralized blockchain database’ he said.
So that’s been the frustrating part. When prices are climbing, people are using it as marketing either to get funding or to get rid of [their coins].
On questioning blockchain beyond Google sheet and database and his view about the Ripple’s widely deployed blockchain App, he points the high fees charged by Citi Bank, JP Morgan and HSBC for cross-border transactions. He emphasized, Ripple’s underlying technology can work cross-border ‘without friction and without permission’ and criticized these banks, stating;
Today, if you want to money across borders, you are essentially trusting Citi Bank, JPMorgan, or HSBC. Those three banks control most of the cross-border flow. Either directly or indirectly, you are going to trust those three companies to move money on your behalf and they charge whatever fees they want. If they don’t care about the emerging market or the other firms then expense just goes up and up and up.
Bearish Market Makes Chatspin Abandon Plans to Accept Crypto Payments
Chatspin, a popular live video streaming multi-platform app, is abandoning its plans to accept cryptocurrencies as a form of payment due to the significant losses in the value of Bitcoin and other coins have suffered this year, the company announced in a press release on December 6, 2018.
Bearish Market Affects Companies Offering Crypto Payments
While companies focusing on blockchain technology have seen their businesses flourish during the second half of 2018, it seems that the bearish market has been able to slow down cryptocurrency adoption.
Companies that have been quick to jump on the crypto bandwagon, offering coins such as Bitcoin as a form of payment, were even quicker to abandon their plans as the uncertainty surrounding the asset is everything but good for business.
One of those companies is Chatspin, a popular live video streaming app that was among the first social media platforms to announce the support for cryptocurrencies.
The company is now abandoning its plans to accept any cryptocurrency as a form of payment on its platform. According to the company’s press release, the decision comes in the wake of significant losses in value Bitcoin and other digital coins have suffered throughout the fourth quarter of 2018.
With many analysts doubting that any of the major cryptocurrencies will be able to recover in short to medium future, the company decided to pull the plug on their original plan to introduce crypto payments to their users.
Live Chat App Pulls the Plug on Bitcoin
In its press release, Chatspin explained that the decision to implement cryptocurrency as a form of payment was taken due to an increase in popularity of the digital coin when making online payments earlier in 2018.
“Just a few months ago, the idea of accepting Bitcoin, Litecoin, and other cryptocurrencies as forms of payment seemed like a no-brainer,” Chatspin Press Manager, Shay Robin, said. “But, having closely followed the cryptocurrency markets, we can see no value to accepting these digital coins and feel the risk far outweighs the reward.”
And while the announcement might deter some crypto enthusiasts from using its video chat app, Chatspin has seen a steady increase in the number of users during the second half of 2018, mostly due to the introduction of new features.
Chatspin became the first platform to launch AR filters available on desktop, creating a more seamless experience for users on all devices. On December 4, the company also introduced a new location and gender filters which make the platform more secure and easier to use.
The update also saw the release of new premium filters, only available for users who subscribe to the video streaming community. The premium features originally targeted to users willing to pay in cryptocurrencies, will now be available only via credit and debit cards.
Coinbase Considering Adding Ripple (XRP)
During a year where many cryptocurrency investors are having their faith tested – Ripple (XRP) has stood out as a cryptocurrency project that has gained more traction than ever. Specifically, Ripplenet has recently formed a partnership with the multi-billion dollar Malaysian group CIMB. However, this isn’t the only partnership that Ripple – based in San Francisco – was able to forge this year.
Ripple also was able to announce partnerships with globally-known companies. For example, they also formed a partnership with Santander and American Express specifically for US-UK payments. A Top 10 U.S. bank, PNC, has also apparently seen the value in Ripple with regards to international payments. These moves have propelled XRP to becoming the second-largest cryptocurrency by market capitalization, moving Ethereum to third place.
There is an advantage with using XRP, and it isn’t surprising that many financial institutions are looking into partnering with Ripple. This is because XRP allows users to enact transactions in real-time, instead of through the traditional financial system, which often take days. It is easy to see how international companies would value real-time settlements regarding transactions, rather than waiting days for payments.
Ripple has even parodied the inefficiency of banks in an advertisement that many in the cryptocurrency community have praised for its humor and insight. In the commercial, a banker travels extensively, through all sorts of terrain, in order to directly deliver cash to another individual. The commercial also displayed the text: “Why is it possible to instantly send a message, but with payments, it’s sometimes faster to board a plane and fly it there yourself?” The advertisement is titled: “Faster Cross Border Payments Shouldn’t Require A Boarding Pass” and can be seen below:
The momentum doesn’t appear to be slowing for Ripple. Coinbase, one of the most well-known and influential companies in the cryptocurrency sector, and valued in the billions – is considering adding support for a “broad range of assets” – including Ripple.
It wouldn’t be a stretch to say that Ripple would be one of the first choices for Coinbase, considering that Coinbase has added coins with a lower market capitalization, and more controversial coins, as well, such as Zcash. Time will tell whether San Francisco-based Coinbase will finally add Ripple, but it certainly appears that it could happen fairly soon.
2days ago, 8 Dec, Saturday
BITCOIN Bitcoin [BTC] will outperform the S&P market in a decade, says Morgan Creek Digital Capital CEO
The bear’s attack on the cryptocurrency market has left a lot of companies and investors reeling, an event that also caused a lot of coins to break their price support. Although the current scenario has dissuaded new entrants, Mark Yusko, the Chief Executive Officer of Morgan Creek Digital Capital, has put his faith in the growth of Bitcoin [BTC] and the cryptocurrency market as a whole.
Speaking to CNBC, the finance bigwig stated that right now real interest rates and its benefits are close to zero. Yusko spoke about 14% of the established institutions and companies that cannot pay off their debs of the last five years and such “zombie companies” need to go away. The statement was his segway into how Bitcoin can be used to rid off the problems retained by the S&P market.
The CEO added that he believes Bitcoin can outperform S & P markets over the next decade. According to Yusko, investors who do not want to invest in traditional commodities should partake in Bitcoin. He even mentioned the Morgan Creek Crypto Challenge which includes a reward of a whopping $1 million. In his words:
“The Morgan Creek Digital Challenge is something that we have started to bring cryptocurrency into the fore, something like the Buffet Challenge.”
Warren Buffet had placed a bet of $1 million pitting the performance of S $ P companies against that of some hedge funds. Mark Yusko also talked about how over the next decade, the United States equity will have no return while Bitcoin will. In his words:
“The equity returns with Bitcoin will be high. Right now, we are in a ery early phase of a massive technological wave and it is hard to predict the highs. The price as a concept is very volatile and tech like EOS will make sure it goes high.”
He even suggested that volatility is real and investors who want asymmetric returns should take a couple of percentage from their current portfolio and put it into cryptocurrencies.
USI Tech Crypto MLM Ponzi Scheme Likely to Get Permanent Ban from Ontario after Hearing
At this stage, it appears to be a mere procedure. The Ontario Securities Commission is seeking to have USI-Tech permanently banned from its jurisdiction. This order was requested via a Statement of Allegations that was filed on December 4, 2018. The allegations are similar to those made in a cease and desist issued against USI-Tech by Ontario in February 2018.
The order was issued after liability finding held by the AMF, which regulated securities for Quebec. It was found that USI-Tech has engaged in the illegal distribution of unregistered dealings and securities contrary to various sections of the Quebec Securities Act. In March, USI-Tech was permanently kicked out of Quebec.
Similar Orders Being Sought
The Ontario Securities Commission is essentially looking for orders like the ones the AMF got. A hearing is already scheduled but the date of the hearing is yet to be made public. However, it is unlikely that any officials form USI-Tech will dare show up for the hearing. USI-Tech went under in January 2018; just a few weeks after Texan authorities issued it with a cease and desist.
The Ponzi Scheme Charade
The Ponzi scheme officially dropped any pretense of crypto mining last October. However, this was not before it emerged that the principals in USI-Tech were buying luxury apartments and cruising in Lamborghinis. Despite the cease and desist issued by authorities in the US and Canada, the authorities have not pursued any more charges against the officials.
The Close of the Crypto Ponzi scheme
In October 2018, the company finally announced the end of its suspicious investment scheme. For one, the packages looked too good to be true. It caught the attention of US authorities who demanded proof of the claims being made. When that happened, they panicked and shut down all operation in April 2017 in the US. However, they kept up the charade about crypto mining.
What was worrying was that people started to buy into the Ponzi mining scheme despite the company’s run-ins with the law. After too much pressure from investors, the company finally made this recent announcement.
Off the Shelf Ponzi Scheme
Mining crypto is usually cheaper than buying. This has led to a surge in mining popularity. Various enterprises based on mining have been set up. USI-Tech took advantage of this. They promised to mine crypto for investors. However, they did not have any equipment.
Instead, they took money from new investors to pay old investors. The company said in February that funds from the BTC2.0 packages would go towards paying those in the BTC1.0 packages. Besides that, the founders have been using funds to live luxurious lives. For instance, the founder Jicha was seen riding a yellow Lamborghini.
When the Ponzi scheme began to collapse, they did not give up. Instead, they doubled down and claimed the high mining costs were why their scheme was failing. It is worth noting that other similar scams have blamed mining costs too.
BITCOIN Bitcoin [BTC] and Ethereum [ETH] will be widely used in upcoming technologies, says Coinbase’s Brian Armstrong
The current cryptocurrency market scenario has left a lot of investors and users skeptical about the rise of digital assets, especially after the fall of Bitcoin [BTC] below the $4000 mark. On the other hand, the bear market has left Brian Armstrong, the Chief Executive Officer of Coinbase, unfazed with the official releasing a circular on the adoption of cryptocurrencies in the Virtual Reality [VR] scenario.
He went on to say that companies also have the option of using existing cryptocurrencies like the popular Bitcoin or Ethereum. According to the Coinbase CEO, another step that organizations could take is to issue their own tokens on established platforms like Ethereum. In the circular given out by Brian Armstrong, he also added:
“It allows participants in these worlds (especially content creators) to earn “real money”. This means more people will spend time in the game. Perhaps they will even earn a living in the virtual world that pays their rent in the real world. If this happens, you could see people spend 8 to 12 hours per day.”
Armstrong’s company has been slowly adding developments and updates onto its platform, with the feature of free PayPal withdrawals being a standout example. Coinbase had announced that the update will allow users to withdraw USD, EUR, and GBP free of charge to their PayPal account. The news was completely out of the blue as Coinbase had not announced the addition on any of their social media handles or official publications.
Why You Shouldn’t Fear the Blockchain Regulators
Kevin Werbach is a Professor of Legal Studies & Business Ethics at the Wharton School at the University of Pennsylvania, and the author of “The Blockchain and the New Architecture of Trust,” from which this article is adapted.
In 2015, New York became one of the first jurisdictions in the world to adopt a regulatory regime for cryptocurrencies. The Department of Financial Services began requiring virtual currency businesses to obtain a “BitLicense” in order to operate or serve customers in the state.
“We want to promote and support companies that use new, emerging technologies to build better financial companies,” said then-New York Superintendent of Financial Services Ben Lawsky, when announcing the rules. He continued:
“Regulators are not always going to get the balance precisely right…. But we need to begin somewhere.”
Perhaps. Yet Lawsky picked the wrong somewhere. And he moved to fast to formalize rules governing what was still, in 2015, a small-scale and fluid cryptocurrency community.
Bitcoin entrepreneurs and technologists argued that the threat of overbroad regulation, and the costs of compliance, would chill startup activity. More than 4,000 comments were filed on the draft rule, most of them critical.
And when the regulations went into effect, a substantial number of Bitcoin-related startups left New York, including the exchanges Kraken, Shapeshift, Bitfinex, and Poloniex. “The ‘Great Bitcoin Exodus’ has totally changed New York’s Bitcoin ecosystem,” declared the New York Business Journal.
Three years after the Great Bitcoin Exodus, the crypto-native exchanges have not rejoined the New York startup scene. But other firms have.
R3, the financial industry distributed ledger consortium with over $100 million in funding, is headquartered in New York. As one might expect, so are a number of finance-focused blockchain startups such as Digital Asset Holdings, Symbiont, and Axoni. Pillars of Wall Street such as Goldman Sachs, JPMorgan, and the parent company of the New York Stock Exchange are getting into the action.
And the activity is not limited to financial services. Consensys, a venture development studio building around Ethereum technology, grew from 100 to over 400 employees during 2017 alone in its Brooklyn headquarters, and is working on dozens of innovative projects around the world (though it recently announced significant layoffs). Blockstack, a high-profile startup hoping to build “a new internet for decentralized apps” on blockchain foundations, is located in New York as well. The New York bitcoin and ethereum meetup groups each have over five thousand members.
The BitLicense, for all its flaws, did not kill off cryptocurrency activity in New York. Neither did it create the model for regulatory innovation its creators intended. Subsequent jurisdictions developing cryptocurrency regulatory frameworks explicitly distinguished their policies from the overly restrictive elements of the BitLicense.
The regulator’s dilemma
Stepping back, in fast-moving areas, regulators inevitably face a dilemma.
If they move too soon, and subject new technologies to old rules without good cause, they risk killing off innovation or pushing it to other jurisdictions. If they wait too long, the public will be harmed, and the costs of imposing requirements on now-substantial industries will become even greater.
Where regulators see clear evidence of the harms they were established to prevent, they will need to act. Unclear requirements like the BitLicense create uncertainty, but so does the absence of any definitive regulatory statement. Smart regulators can encourage innovation even as they protect against abuses.
When in 1994 the Federal Communications Commission received a petition to ban “the provision of…telecommunications service via the ‘internet’ by non-tariffed, uncertified entities,” it faced a challenge similar to New York confronting Bitcoin in 2013. The voice over internet protocol (VOIP) startups springing up to provide services were not subject to the pricing, universal service contribution, consumer protection, emergency services, and other requirements that traditional phone companies faced.
The FCC managed to steer a course between chilling innovation and abandoning its mission, gradually bringing VOIP services within a set of obligations as they matured. Today, a majority of Americans who have landline phones in their homes use VOIP technology, without even knowing it. At the same time, real-time voice and video messaging on services such as Skype, Facetime, and WhatsApp has been a hotbed of innovation and adoption, with offerings that look very different than traditional phone service.
If regulators can follow the FCC model, they will support the realization of the full potential of cryptocurrencies.
Disruptive startups are not necessarily on the side of deregulation. For example, when Microsoft used its monopoly power in the late 1990s to threaten web-based services, the U.S. government intervened through antitrust enforcement to restrain it.
The internet might look very different today if there were no independent market for Web browsers, or if Microsoft had implemented its plan to charge a small fee on all e-commerce transactions, leveraging its hammerlock control over the desktop.
Moreover, the knowledge that governments were operating to police abusive practices helped promote trust in the new and unfamiliar word of virtual transactions, whether in form of PayPal transfers, Amazon sales, or Netflix subscriptions. In time, internet advocates began to call for government intervention to enforce network neutrality rules, which prevented broadband access providers from discriminating against unaffiliated services, and privacy protections.
Sign of maturity
To be sure, there are important questions about where to draw lines around surveillance and permissible uses of technology.
Criminals and terrorists will try to exploit the blockchain, just as they exploit other technologies whenever possible. Governments will over-react, and propose rules with collateral damage to legitimate operations.
The point is that these are not new challenges. Calls for regulation do not represent the end of cryptocurrency innovation; they signal the blockchain’s ongoing maturation.
Contrary to what he/she/they or anyone else might think, Satoshi Nakamoto did not create a trustless technology. Cryptocurrencies and other blockchain-based systems eliminate certain costly trust relationships, but they do so to make the transactions themselves even more trustworthy. Hundreds of billions of dollars in cryptocurrency market capitalization based on nothing but the collective belief of independent network participants might be the greatest self-generation of trust in history.
The law, and its siblings regulation and governance, are often viewed as a heavy-handed enforcement mechanism. The goal of that enforcement, however, is not to punish. It is to open up freedom of action by setting the rules of the game.
A referee gives a red card for a hand ball in a soccer match not to stop an innovative form of play, but to protect the integrity of the game. Fraud, theft, criminal activity, unjustified regulatory arbitrage, governance failures, corruption, and manipulation are the major impediments to growing blockchain and cryptocurrency markets.
If you want to change the world, and do so sustainably, law and regulation are your friends.
Israel's tax authority targeting those avoiding crypto-related taxes
Israel’s tax collection authority is taking aim at cryptocurrency traders and investors who have unreported earnings from their crypto investments, Calcalist reports.
The tax authority has reportedly sent notice letters to those whose activity raises suspicion of unreported earnings, like individuals who frequently travel without having the requisite funds on paper, or those who own more than three properties, said an official familiar with the matter.
Over the last two weeks, the tax authority has also unilaterally opened tax accounts for hundreds of Israelis who have been identified as having failed to report earnings on their cryptocurrency trading.
Cryptocurrencies are classified as a financial asset as opposed to a currency in Israel. As such, crypto trading is subject to a capital gains tax of 25% - 30%.
Chepicap reported in July that Israeli crypto exchange Bits of Gold agreed to cooperate with the country’s tax authority to provide information regarding large deposits.
Mike Novogratz Crypto Trading Desk Lost $175 Million In Nine Months
In a recent report published by Galaxy Digital Holdings, the firm states that it incurred huge losses in nine months and this was before the last crash. The report cites “lack of overall trading volume in cryptocurrencies,” as one of the main reasons for the poor performance.
The Recent Crash Means Q4 May Be Worse
The report shows that things got bad in the third quarter. The free fall the crypto market experienced in the past few days means quarter four promises to add more losses to the company.
In the third quarter, net realized, and unrealized losses on crypto assets at the firm’s trading operation totaled to $76.65 million. That figure brought the losses for the first three quarters of the year to $175.68 million.
According to the company, the hit in Q3 was chiefly caused by losing bets on Bitcoin, Ether, and XRP.
The firm recorded a net realized loss of $38 million for digital assets in Q3. The quarter alone accounts for more than a third of its nine-month loss. It also had total operating expenses of almost $30 million in the same period.
The report shows that by the end of Q3 the firm held cryptocurrencies with a ‘fair value’ of $123 million. Also, the total assets held by the firm stood at $418.5 million at the end of Q3, up from $54.7 million at the end of 2017.
The company said it employs several trading strategies including cross-exchange arbitrage and also ‘market neutral’ trading strategies across digital assets and crypto exchanges.
Mike Novogratz founded galaxy Digital Holdings. He is a former Goldman Sachs partner and hedge fund manager who was one of the first high profile Wall Streeters to jump on the crypto bandwagon as the price of virtual currencies soared in recent years.
Recently speaking to FT, he said that this year has been tough for his company. Adding that it “sucks to build a business in a bear market.”
However, he is hopeful things will change come the next year. He predicted that financial institutions would move from investing in crypto funds to investing in virtual currencies themselves by the first quarter of 2019.
“You’ll see that flip next year. That’s when prices start moving again.”
Australia: Power Ledger’s Blockchain Energy Platform Goes Live in Fremantle
Australia’s coastal city of Fremantle has kicked off a trial that will allow some residents to trade solar power on a blockchain-based platform provided by renewable energy-focused crypto startup Power Ledger.
According to the Minister for Finance, Energy and Aboriginal Affairs in the government of Western Australia, Ben Wyatt, around 40 households in Fremantle will participate in the trial that will end next year in June.
Efficient Balancing of Supply and Demand
During the trial, households will enjoy the flexibility of determining the price at which they are willing to purchase and sell solar power for and then conduct the transactions on a blockchain-enabled platform.
“The trial represents an innovative solution to virtual energy trading that may have implications for energy utilities working to balance energy supply and demand all over the world,” Wyatt said in a statement. “These households are believed to be the first in the world to be taking part in an active, billed, peer-to-peer trading trial that allows them to effectively buy and sell solar energy generated by their rooftop system across the grid.”
The trial is part of the RENeW Nexus Project that has brought together various entities including Power Ledger. The RENeW Nexus project was initiated with a view of exploring how future cities can use blockchain technology and big data to integrate distributed energy as well as water systems infrastructure.
Power Ledger in the United States
This comes less than a month since Power Ledger made a foray in the biggest wholesale electricity marketin the United States by inking a deal with energy supplier American PowerNet. The deal allowed Power Ledger to deploy its blockchain-based peer-to-peer renewable energy trading platform at the electricity provider’s headquarters in the state of Pennsylvania.
Aussie Crypto Startup Power Ledger Brings P2P Energy Trading to Largest US Market https://t.co/OiVpHq5eON
— CCN (@CryptoCoinsNews) November 18, 2018
As CCN reported at the time, the initiative enabled the solar power generated on the rooftops and carports at the headquarters of American PowerNet to be distributed to the surrounding businesses using Power Ledger’s xGrid platform.
“Rather than just dump our excess solar power on to the grid, we’re thrilled we can now provide clean, sustainable power to our neighbors,” CCN quoted American PowerNet’s president, Scott Helm, as having said.
A month prior, Power Ledger had won the 2018 edition of Extreme Tech Challenge (XTC), a competition organized by the billionaire founder of Virgin Group, Sir Richard Branson, to equip techpreneurs with the necessary tools required for their success. The startup, which raised approximately AUD$34 million in an initial coin offering last year in October, received financial endorsements totaling millions of dollars after winning the XTC 2018.
Why South Korea Will Play a Major Role in Cryptocurrency Adoption
As a high-tech hub known for its consumer electronics, tech giants, esports, and global innovation, perhaps it’s not surprising that a report by Cindicator revealed that South Korea will play a major role in cryptocurrency adoption. By reviewing existing data on exchange volumes, recent economic history, regulation, and trends, the tokenized fintech asset management company came to some interesting conclusions.
Based on existing evidence, the country of 50 million inhabitants and one of the world’s top 15 economies is poised to play a major role in embracing cryptocurrencies. This is due to a combination of factors such as exchange infrastructure, a high level of tech adoption, and the country’s regulatory and tax framework.
A Crypto-Friendly Population
When listing the top crypto-friendly countries in the world, rarely does South Korea make the cut. Malta, Singapore, Switzerland, and Estonia are usually more top-of-mind. However, South Koreans with their insatiable appetite for high-tech take the cake in terms of the population’s attitude.
South Koreans, in fact, account for approximately 30 percent of total cryptocurrency trading worldwide, with some 30 percent of all salaried workers owning and trading crypto assets of some kind. Certainly, the country’s recent economic history and growth is a factor, but for a fairly small country, it has a highly developed cryptocurrency exchange scene.
The South Korean Exchange Infrastructure
South Korea has a very developed cryptocurrency exchange scene with Bithumb, the biggest Korean exchange, ranking in the top spot over the last 30 days in terms of trading volume in USD, (data from November 22). There is also Upbit, Coinone, and Korbit. Most of the market is cornered by Bithumb and Upbit (86 percent).
According to the report, there have been plenty of cases in which just the announcement of an altcoin getting listed on either of these exchanges saw its value rise by ridiculous proportions. When tron (TRX) was listed on Bithumb in April 2018, its price went from $0.03 to $0.05 in as little as three hours.
The Cindicator report states:
“There is no doubt that Korean exchanges are a key element in trying to analyze the crypto phenomenon in the Asian.”
Leading Crypto Projects for Mass Adoption
Coinone is working on a blockchain project to make money transfers easier around the globe, while Bithumb also recently announced a payment service in partnership with Qoo10. This company is widely known as the “Asian Amazon.”
There are also plenty of other businesses that are taking blockchain tech to the mainstream, including accelerator projects like Deblock.
Regulation is Coming Around
South Korea was particularly plagued by Ponzi schemes and other sophisticated crypto scams. This, coupled with a large trading volume that caught the attention of regulators, lead them to take an initially strict stance on cryptocurrency. In fact, from September 2017 through March 2018, both ICOs and the anonymous trading of crypto were banned.
These restrictions saw plenty of subsidiaries and projects heading offshore to Singapore to launch ICOs, although the cost of doing this was prohibitive to startups.
Regulation in the country is starting to thaw, however, and appears to have been an initial reaction to address the rampant problems in the ecosystem, such as scam ICOs, and hacks.
The Korean government recently announced 1 trillion won (USD $880 million) to spend on blockchain development in 2019 as part of a 5 trillion won package to stimulate the economy through innovation.
This is a telling indicator that South Korea is changing its stance and creating a more favorable climate for blockchain technology and the legitimization of cryptocurrency.
South Korea has a very high taxation rate. However, since 2013, bitcoin and other cryptocurrencies are exempt from capital gains tax. This is significant for traders and investors since they can keep 100 percent of their profits. It also makes navigating crypto taxation much more simple. While there are rumors that this tax haven on crypto may be about to change, no official line has been taken.
Head of Analytics at Cindicator Simon Keusen commented that their research indicates that South Korean influence in the global blockchain industry will continue to increase:
“The country is very open to new technology. The enthusiasm for crypto assets is palpable. Latest legislative initiatives show that the government understands the potential of blockchain technology.”
He concluded that:
“South Korea will play an important role in driving the adoption of cryptocurrencies globally.”
RIPPLE Ripple CEO responds to NYSE Chairman’s comment on digital assets
In a recent tweet, Brad Garlinghouse, the CEO of the leading blockchain Fintech firm, Ripple, responded to the statement made by the New York Stock Exchange [NYSE] chairman. Jeff Sprecher, in an interview with CNBC stated that cryptocurrencies are here to stay. Regarding this, Garlinghouse stated that as volatility in the market is not equivalent to the end of stocks, similarly, digital assets will not reach their end either. In his words:
“Exciting to see more people in traditional finance world take the long view on digital assets. Just like stock market volatility ≠ the end of stocks, digital assets aren’t going away”
Despite the crash in the cryptocurrency market, the CEO of the parent company of NYSE, Intercontinental Exchange [ICE], stated that there is a place for digital assets in the regulated markets.
Intercontinental Exchange is also behind a Bitcoin futures trading platform called Bakkt. According to crypto-investor and the CEO of Galaxy Digital, Mike Novogratz, the viewpoint of regulators like Securities and Exchange Commission can be changed when big players such as ICE begin including services associated with cryptocurrencies.
Dr.T, a popular member of the XRP community and a Twitterati on Garlinghouse’s tweet replied:
“People who think digital assets without a counter-party like XRP is just a fad that will disappear are going to as wrong as people who thought electricity was a fad. Bitcoin is like Direct Current (DC) and XRP is AC. You know the history: AC replaced DC.”
Here, another Twitter user called Satoshimasen responded:
“Except that dc applies to automotive, telecoms, integrated circuits and low voltage applications in every corner of the world. <cough>”
Ox Protocol Launches ‘Instant’ Crypto Purchasing System for Websites
Ox (ZRX), an open-source protocol that promotes low-friction and peer-to-peer exchange of ERC-20 tokens on the Ethereum blockchain, has recently launched Ox Instant. This is a new service that enables users to add a crypto-purchasing and exchange system to a website or application. As the platform reported,
The technology will aggregate liquidity from Ox, ERC-720 and ERC-20 by discovering and listing the bet exchange rate, while also enabling those who visit the website and app visitors to pay through Ethereum Wallet, including Trezor, MetaMask, and Ledger. Upon the completion of a transaction, Ox Instant receives an affiliate fee.
“Developers and creators can utilize Instant to build product experiences that couldn’t have existed before. Ox Instant is already being hosted by a diverse set of projects including non-fungible token marketplaces, non-custodial crypto wallets, dapps, and even crypto price fees.”
A few platforms have adopted Ox Instant, such as Coinbase and CoinGecko. The latest has multiple coin pages, including DAI, MKR. BAT, AST, ZRX, and REP. As for Ox Instant, it also works with non-fungible tokens, which allows better distribution of in-game items by blockchain developers. This promotes internal game economics.
SEC Fines Crypto Fund $50K and Issues Cease-and-Desist
The U.S. Securities and Exchange Commission has ordered fund manager CoinAlpha Advisors LLC to pay a $50,000 fine following what it deemed to be an unregistered securities sale.
According to the order published Friday, CoinAlpha formed a fund in October 2017 with the goal of investing in digital assets. It reached out to possible investors, raising a bit more than $600,000 during the process.
While CoinAlpha did file a “Notice of Exempt Offering of Securities,” the company was not eligible for an exemption and did not otherwise register with the SEC. As such, it effectively solicited securities investors in breach of the law, the order says.
Further, the agency said that the company did not run adequate know-your-customer procedures to ensure that all of its investors were accredited, though it did hire a third-party to check accreditation status after the SEC first contacted it.
The order notes that CoinAlpha reimbursed all fees to its investors after being contacted by the SEC, saying:
“A total of 22 investors invested a total of $608,491 in the Fund. In October 2018, after being contacted by the Commission staff concerning the issues herein, CoinAlpha unwound the Fund, pursuant to the authority granted in the Fund’s Limited Partnership Agreement.”
Notably, the order highlights that CoinAlpha cooperated with the SEC, and the regulator in turn is only imposing sanctions that it negotiated with the company.
These sanctions include barring CoinAlpha from violating the Securities Act in the future and a $50,000 penalty paid to the SEC, on top of the reimbursements. According to the filing, CoinAlpha didn’t admit to or deny the allegations put forward by the agency.
The SEC’s response echoes similarly light repercussions for other entities in the space, including startups Airfox and Paragon and EtherDelta founder Zachary Coburn.
While each of those firms or individuals was found to have violated securities laws, the SEC in each case explained that they had cooperated with its investigation, and imposed relatively low penalties for each.
CoinAlpha did not respond to a request for comment by press time.
Ripple-Driven XRP Tip Bot Can Now be Operated Through Apple’s Siri Virtual Assistant Service
XRP TipBot Can Now be Operated Through Siri
#XRPTipBot by Siri [v2.2] for iOS
— Ӿ₹₱To_Ø my mind on my XRP & my XRP on my mind (@xRpTo_O) December 4, 2018
XRP Tip Bot (/u/xrptipbot) is a bot that enables users on Reddit, Twitter, and Discord to send Ripple XRP to each other through Reddit comments/tweets. To start tipping XRP, you have to deposit XRP to your XRPTipBot-account first. Once you have XRP in your tipping account you can start tipping. When the XRP Tip Bot is mentioned, it will check the balance of the user sending the tip. If the user sending the tip has enough XRP in his/her Tip Bot Balance, the typed amount is subtracted from his/her account, and added to the user replied to.
The recent update on Twitter said:
Update !!#XRPTipBot by Siri [v2.2.2] for iOS
— Ӿ₹₱To_Ø my mind on my XRP & my XRP on my mind (@xRpTo_O) December 6, 2018
Through this, Siri will greet the user with the time of the day, Confirm and Cancel Tip, Set a specific amount, Added Emoji, random answer variation for Siri, show XRP amount/balance in USD/EUR/GBP/JPY/KRW and changed Widget color/icon. Even there were some bug fixes as some users had complained earlier. One can even send tips without having a tip bot set up already.
The information stored in the XRP Tip Bot database is nothing more than (a combination of) information that is already publicly available. However, serious precautions are implemented to ensure the security of the XRP Tip Bot platform and its database. To prevent loss of funds in case of a security breach, this website is not realtime connected to the part of the application connected to the XRP ledger.
Block 7,080,000: Ethereum Devs Propose Activation Point for Next Hard Fork
Members of ethereum’s open-source development team have reached agreement on an activation time for Constantinople, a proposed code change designed to give users the option to update the blockchain with additional features.
Speaking at a bi-weekly core developer meeting Friday, the developers assembled agreed on block 7,080,000 on the ethereum blockchain as an activation point at which users would be able to elect to upgrade to the new code. Put simply, should users choose to accept the change by upgrading their software, the update would go live when the block is mined.
According to estimates by release manager for the Parity Ethereum client, Afri Schoedon, this means Constantinople is expected to go live between January 14 and 18. The block number is expected to be introduced onto the platform in the next batch of software updates.
Martin Holst Swende, security lead at the Ethereum Foundation and the go-ethereum client, said that the go-ethereum software release will also include an emergency switch to delay the upgrade in the event of any unexpected issues.
Originally targeted for November, Constantinople would bring a host of design changes aimed at streamlining the platform’s code. Additionally, it seeks to delay the so-called “difficulty bomb” – a code fix designed to prompt frequent upgrades – for 18 months, while reducing the ether mining reward from 3 ETH to 2 ETH per block.
Speaking on the call, developers also discussed ProgPoW, a proposed change to ethereum’s underlying proof-of-work algorithm that would block the use of specialized mining hardware, known as ASICs, from the network. While progress in the ProgPoW implementation is going smoothly, developers urged that a decision has yet to be reached regarding its inclusion in any proposed software upgrades.
“We are getting the options out there and then make a decision later on,” Swende said.
Developers also discussed ethereum 1x, another upgrade that is currently targeted for proposal in 2019. Several working groups gave accounts of their progress, but they stressed development is in early stages.
“ProgPoW has not been decided as something we are definitely putting in or doing. Same with any of the working groups we discussed today,” said Hudson Jameson, communications officer for the Ethereum Foundation.
Jameson also said that following discussions on social media, meetings concerning the roadmap for the ethereum 1x upgrade will now be conducted publicly. This is distinct from the previous meeting, which was unrecorded and had notes released after the fact under Chatham house rules.
“We are just going to have open meetings for now,” Jameson said.
Brazilian Crypto Exchange Mistakenly Sends User $35 Million on $127 Withdrawal
Brazilian crypto exchange Bitcambio has reportedly sent one of its users a whopping RS $137 million – equivalent to about $35 million – after the user attempted to withdraw 500 reals, worth roughly $127.
According to local news outlet Portal do Bitcoin, the cryptocurrency exchange started calling the user, Kaique Nunes, about the withdrawal shortly after. Speaking to the news outlet Nunes stated:
“Early last month, I issued some normal withdrawal orders. After a while, Bitcambio called to let me know that they issued all this value and that they needed me to recognize a document in a notary’s office. I thought it was a coup.”
Per the report Nunes initially believed a hacker managed to get a hold of his personal information and was now trying to get his signature, or that he was facing a rogue employee trying to scam users.
Believing it was a scam, Nunes initially ignored the crypto exchange, but the exchange insisted the transaction had been canceled, but that “to complete the process it was necessary [for Nunes] to go to the notary, to recognize a signature and a document that they sent by email “.
Looking to learn more about the case Nunes told a Facebook group related to cryptocurrency discussions in Brazil about the ordeal. One of Bitcambio’s suppliers, Rodrigo Souza, is reportedly an administrator in said group, and replying to Nunes recognized the exchange’s error.
Addressing the user on his personal page, he commented that Bitcambio operates within the law, but that mistakes do happen and they aren’t afraid to draw attention to them. Speaking to the local news outlet, he revealed a bug was behind the large error and that given the size of the transaction, it wasn’t possible to cancel it without a letter of agreement.
Now, both parties are seemingly working towards fixing the problem. Notably, Souza noted Nunes’ time would be rewarded, stating “Kaique will be reimbursed for all the costs he has to go to the notary’s office.”
The ordeal comes at a time in which bitcoin exchanges in Brazil are struggling. As CCN covered the country’s Department of Federal Revenue (RFB) has been looking to snoop on exchanges. In October, exchange Bitcoin Max managed to win a standoff against a bank that was forced to reopen its account to avoid fines.
The bear market has taken its toll. This year Brazil’s largest crypto exchange, Mercado Bitcoin, fired “at least” 20 employees amid restructuring efforts. Huobi, which launched this year in the country, dismissed 6 of its 10 employees.
3days ago, 7 Dec, Friday
VanEck: We’re ‘Cautiously Optimistic’ on Bitcoin ETF Approval
Gabur Gurbacs, Director of Digital Assets Strategy at VanEck has expressed optimism over the SEC’s impending decision on the long-mooted Bitcoin exchange-traded fund (ETF) proposal by VanEck and SolidX.
Speaking to host Brad Smith during an appearance on Cheddar, Gurbacs stated that while the market clearly wants a bitcoin ETF, the only update available is that VanEck believes it has provided enough compelling reason for the SEC to approve the long-awaited fund, and it believes it has a good chance of receiving the regulator’s blessing.
“Increased Transparency and Better Structure”
Explaining the reason behind the company’s optimism, he said:
“The last day the ETF can be approved is end of February. We think we have met all required market structure, obstacles and requirements on pricing custody evaluation safekeeping. So, we are consciously optimistic but there is a lot more work to be done sort of to get the market ready. And some good announcements recently on over-the-counter markets being transparent.”
The conversation, which was posted on Brad Smith’s Twitter account earned mixed responses from an audience which was split between sharing Gurbac’s optimism and expressing reservations about the growth of the over-the-counter market’s transparency and surveillance capabilities.
Expanding later on his statement regarding increased maturation of crypto markets, Gurbacs tweeted:
@MVISIndices partners with OTC trading titans @CumberlandSays @circlepay and @GenesisTrading to bring to market the first established #OTC #Bitcoin #Index. Ticker: #MVBTCO. Giant leap in #Bitcoin and #digitalassets market structure development! More info: https://t.co/LfMRTG1ndR pic.twitter.com/Ax7ktWk9iT
— Gabor Gurbacs (@gaborgurbacs) November 20, 2018
It will be recalled that in addition to the proposal by VanEck, nine similar proposals for bitcoin ETFs have been submitted to the SEC, which promptly turned all of them down. The reasons given in all these cases generally revolved around concerns about the possibility of manipulation and the absence of a robust market surveillance system in crypto markets.
In a bid to address these concerns, VanEck has made a series of adjustments to their proposal. In November, Gurbacs stated that a Bitcoin ETF would not only attract billions of dollars in new investments, but the pending proposals could effectively give the SEC a key measure of regulatory leverage over the crypto market.
While an exact time frame for an SEC decision on VanEck’s application remains hard to predict, many stakeholders in the crypto space are keeping a very close eye on developments because it is expected that unlike a number of other ETF applications, it is the one with the greatest possibility of success. The SEC has postponed a decision on the application twice already, with another postponement expectedly coming last night which pushes the decision to the end of February 2019.
Switzerland's 'Crypto Valley' Zug Ranked 'Fastest-Growing' Tech Hub in Europe
The Swiss city of Zug, home to crypto and blockchain development hub “Crypto Valley,” has been ranked the fastest-growing tech community in Europe. Swiss startup news channel StartupTicker reported this on Dec. 6.
According to the latest annual “State of European Tech” report from London-headquartered global technology investment firm Atomico, Zug came out top in a comparison of year-on-year growth of attendees to tech-related “meetup” events per European city, with a 177 percent increase as compared with last year:
Comparison of YoY growth of attendees to tech-related meetup events per city. Source: startupticker.ch
As Startupticker further reports, Switzerland overall had a weaker performance as compared with other European tech destinations. The United Kingdom sealed the top spot as preferred destination for non-European “international movers” into the country’s tech ecosystem, followed by Germany and France — with Switzerland in tenth place — behind countries such as the Netherlands, Ireland, Sweden and Belgium.
Neither did Switzerland make it onto the list of U.S. software engineers seeking employment in Europe.
Nonetheless, the Atomico report identified robust Swiss corporate investment in technology, with Zürcher Kantonalbank ranked second “most active” European corporate investor, behind only France’s BNP Paribas.
As reported earlier this week, the country’s national postal service Swiss Post and state-owned telecoms provider Swisscom have just announced a partnership on a “100 percent Swiss” blockchain infrastructure. Its key premise is to provide a service that retains all data within Switzerland, and that can meet the security requirements of banks, in a bid to drive the Swiss economy to “quickly obtain a leading position” in developing use cases for the technology.
Switzerland has a positive reputation among innovators, sealing the top spot of most “blockchain-friendly” European Union country this spring. Most recently, the Swiss Minister of Finance, Ueli Maurer, has nonetheless indicated that in lieu of establishing a blockchain- or crypto-specific legal framework, the country instead plans to tweak existing laws to accomodate the new technology and its financial applications.
2weeks ago, 29 Nov, Thursday
Coinbase, DCG Join $4.5 Million Seed Round for Crypto Evaluation Startup
Flipside Crypto wants investors to think beyond market capitalization, and Coinbase apparently agrees.
Revealed exclusively to CoinDesk, the exchange’s Coinbase Ventures arm and Digital Currency Group co-led the analytics startup’s extended seed round that closed on November 21, alongside True Ventures and Castle Island Ventures. Although the size of Coinbase’s investment was not disclosed and the company declined to comment on the move, all told Flipside has raised $4.5 million.
“Coinbase has substantial interest in what data can do to help their customers be most effective at understanding and take part in this space,” Flipside Crypto CEO Dave Balter told CoinDesk. “We look forward to working with them on that.”
Boston-based Flipside tracks network activity and developer contributions to GitHub projects, among other factors, to determine how various assets are evolving and being used. Founded in 2017, the startup analyzes 1,000 crypto assets and scores them, factoring in global market caps and trading patterns as just 5 percent of each asset’s overall “fcast” score.
The firm uses multiple algorithms to map out trading patterns and says it can distinguish exchange activity from other types of transactions, like payments or moving crypto to a personal wallet. Similar to CoinDesk’s Crypto Economics Explorer, the idea is to give a more well-rounded view of crypto valuations rather than fickle trading prices.
“It starts with understanding the difference between speculation and actual usage,” Flipside board member Adam D’Augelli, a partner at True Ventures, told CoinDesk.
So far, over 100 investors have used these metrics from the startup’s closed beta while Flipside partnered with institutions like the investment bank Canaccord Genuity to create detailed evaluation reports. Plus, according to Balter, several more institutions plan to partner with the startup when the platform launches publicly in early 2019.
Balter went on to say that only the top 100 cryptocurrencies have any real traction at this point. However, he believes measuring blockchain activity and developer contributions can offer a holistic perspective of how an asset is maturing.
“Price is an ineffective tool for understanding the value of these assets,” Balter said. “What you really need to pay attention to is, are customers using this product? How is that changing? And are developers actually building?”
Early signal on XRP
This combination of analytics can help predict market signals, according to Flipside. For example, XRP’s fcast score spiked in September, partly reflecting GitHub activity, as the fintech company Ripple was quietly rolling out a new initiative making it easier for banks to use the cryptocurrency.
“As they [Ripple] begin developing for that partnership to get announced, they are doing code work. They’ve got customers testing the product. They are doing all the things that a typical business would do before making an announcement,” Balter said, adding:
“It’s highly indicative of good, healthy company behaviors. If they are focusing on the business, you will see the fcast [score] move. If they are just focused pumping the price, that fcast isn’t going to change.”
For D’Augelli, whose fund also invested in cryptocurrency projects like the Chia Network, TruStory, and ZeppelinOS, insights that must be collected in the moment or quickly evaporate or get buried in the slush could prove invaluable to cryptocurrency creators.
“If you’re a crypto project today you don’t have a way to benchmark yourself against others, to reach out to your end customers, to understand if people are engaging in the right way,” D’Augelli said. “Those same tools that are useful for investors to understand the fundamental value of projects also help projects build better customer experiences and understand how they are doing.”
Starting early next year, people who want more detailed reports and live updates from Flipside will be able to pay for subscriptions to ranging from $25–$300 a month, depending on what types of data insights they need.
The startup’s mailing list already includes roughly 1,000 prospective subscribers, including venture capitalists, retail investors, and developer teams.
As Flipside’s backer Coinbase looks to aggressively add new assets in 2019, such metrics could prove useful for the exchange unicorn as well.
Speaking to the current market conditions, Balter concluded:
“The projects that [will] win, that move through this winter of despair into growth, like Amazon from the dotcom bubble, are the ones that are actually showing that customer movement.”
Hardware Wallet Ledger Nano S Announces Support for Monero
The French company, which along with Trezor and KeepKey is one of the oldest hardware wallet manufacturers in the industry, said the Nano S was already compatible with Monero’s latest GUI 0.13 release.
“We are thrilled to welcome another top-ten cryptocurrency to the Ledger platform with Monero,” CEO Eric Larchevêque commented, adding:
“With this addition, Ledger devices now cover 90% of the entire crypto market capitalization.”
Like its competitors, Ledger continues to focus on supporting as many of the popular cryptocurrencies as possible, as security of holdings becomes an ever more pressing issue for investors.
Earlier this month, Trezor issued a warning that counterfeiters had stepped up efforts to release fake versions of its own devices for sale on the internet.
In October, Larchevêque revealed Ledger had sold over 1.3 million Nano S units.
Monero is currently ranked 12th among cryptocurrencies by market capitalization. The coin is trading around $60.88, down just under 1 percent on the day to press time.
Blockchain Oil Trading Platform Backed by Shell and BP Is Now Live
A blockchain platform built by Vakt Global, a consortium venture set up by major firms including Shell and BP, has launched to bring new efficiencies to energy commodities trading.
According to a tweet from the company Thursday, the platform is now ready to facilitate the trade in crude oil between commodity firms, claiming to be the “first enterprise grade” blockchain solution within the oil and gas market.
“Our 5 investors within the BFOET market have now gone live on the VAKT platform!,” the tweet reads. The BFOET market includes five North Sea crude oil fields – Brent, Forties, Oseberg, Ekofisk and Troll. The company plans to expand to other markets next year.
The blockchain platform is aimed to help trading companies replace paper-based documentation with smart contracts. By automating parts of the process, the move is expected to help companies cut costs, reduce errors and make post-trade processes more efficient.
The “first line of code was only written in May this year”, VAKT Global said in a LinkedIn post on Thursday, adding that, together with its partners Deloitte and IT firm ThoughtWorks, it managed to deliver this project “on time and to budget.”
The consortium was formed a year ago this month. Shell and BP aside, other members include Norwegian energy firm Statoil, trading houses such as Gunvor, Koch Supply & Trading and Mercuria, and banks including ABN Amro, ING and Societe Generale.
In time, the venture aims to “lead the migration of all forms of energy transaction data to the blockchain, improving data quality, further strengthening security and increasing the speed of settlements industry-wide, while reducing the cost for industry participants,” Vakt said in a launch announcement.
UAE Launches Blockchain Initiative to Process 50% of Govt. Transactions by 2021
The government of the United Arab Emirates has unveiled two national initiatives focusing on strengthening the position of the country globally in emerging technologies such as blockchain and artificial intelligence.
One of the programs that were launched during the second UAE Government Annual Meetings which took place in the capital Abu Dhabi was the AI and Blockchain Guide initiative, as initially reported by the Emirates News Agency. With this program, the goal is to offer a standardized definition of blockchain technology and artificial intelligence at the federal level.
The AI and Blockchain Guide, which will be offered to all the smart local entities across the seven emirates, will also focus on familiarizing the relevant authorities with the two technologies. This is important because the adoption of the two technologies will involve individuals drawn from across many sectors, some of who may not be technologically adept:
“The UAE is keen to adopt AI and Blockchain technologies in all the economic, health, educational and other vital sectors. It seeks to boost cooperation and forge partnerships between the various government, federal and local entities, international companies and startups in a bid to find effective and innovative solutions and make a positive impact,” UAE’s Minister of State for Artificial Intelligence, Omar bin Sultan Al Olama, said.
Government Transactions on the Blockchain
According to the Emirates News Agency, the UAE aims to ensure that by 2021 half of its government’s transactions are conducted on a blockchain platform. The UAE has also set an ambitious goal of becoming the global leader with regards to AI adoption by 2031.
The other initiative that was launched is the National Programme for AI and Blockchain Capacity Building. The goal of the program which will be carried out in partnership with the higher education ministry is to provide scholarships and operate educational programs in the areas of blockchain technology and artificial intelligence. This will include rolling out educational programs that run for short periods of time for Emiratis in various professional levels.
The National Programme for AI and Blockchain Capacity Building will also identify the sectors and sub-sectors that will face job losses as a result of the adoption of blockchain technology and artificial intelligence and work towards reducing the number of workers in these fields. Additionally, the initiative will seek to retrain the affected workers allowing them to find alternative employment opportunities.
Private Sector Involvement
Besides the government, the private sector has also made contributions to the development and adoption of blockchain technology in the UAE. Early last year, leading healthcare firm NMC Healthcare partnered with UAE Telecom to store patient records on the blockchain within the Emirates.
— CCN (@CryptoCoinsNews) January 7, 2017
Blockchain initiatives in the UAE have, however, not been restricted to the national level as the various emirates have also unveiled their respective projects. This includes Dubai which has partnered with IBM on a blockchain-based trade finance pilot among other initiatives.
Market Value of Blockchain in Retail to Soar 29-Fold by 2023
The market value of blockchain in global retail is forecast to see a 29-fold increase in value over the next five years, according to an analysis of factors behind the growth, published on PRWeb Nov. 28.
The analysis on emerging blockchain applications driving the predicted increase – from $80 million today to over $2.3 billion by 2023 – was conducted by fintech executive Monica Eaton-Cardone.
The figure of $2.3 billion by 2023 – at a compound annual growth rate of 96.4 percent – has been taken from a market research report from MarketsandMarkets, first published in June.
Eaton-Cardone is the co-founder and Chief Information Officer (CIO) of Global Risk Technologies – a technology firm that focuses on mitigating risk in the global payments industry – and Chief Operating Officer (COO) of Chargebacks911, a chargeback remediation company.
In her analysis, Eaton-Cardone takes a detailed look at applications that are likely to accelerate business adoption of blockchain and other forms of distributed ledger technologies (DLT) across the retail sector.
She looks at five major retail applications: supply chain management, inventory management, authenticity verification, auto-renewal and subscription services, and customer data and loyalty programs. For supply chain management, for example, her analysis cites a major Walmart and IBMpartnership on a blockchain food traceability initiative, which can be used to identify the origin of produce within just 2.2 seconds – as opposed to over a week using legacy systems.
For blockchain to be adopted industry-wide at global scale, Eaton-Cardone notes that several key issues remain to be tackled – such as data privacy and engagement with existing and emerging legal and regulatory frameworks. Nonetheless, industry giants such as Walmart, Carrefour, De Beers, and Amazon are all showing encouraging signs of engagement, she notes.
As reported yesterday, Amazon has just announced the debut of two new blockchain-based products, Amazon Quantum Ledger Database (QLDB) and Amazon Managed Blockchain.
A Cointelegraph analysis this fall outlined blockchain adoption rates and forecasts across major industries, including retail, manufacturing, finance, energy, and insurance.
AMZN! $4K BITCOIN STILL HISTORICALLY OUTPERFORMING AMAZON STOCK
Bitcoin price held above $4000 November 29 as talk turns to the cryptocurrency’s continuing appeal over major stocks such as Amazon in recent years.
BTC STILL BEATS AMAZON EVEN AT $4K
After a dip to lows around $3500, something not seen in over a year, Bitcoin managed to reclaim and hold onto the $4000 mark Wednesday, hitting local highs of $4339 before correcting closer to $4190.
Analysts had warned through last week that the mass sell-off could easily continue into the mid-term, Bitcoinist reporting on Civic CEO Vinny Lingham telling mainstream media this week that a sub-$5000 Bitcoin price could last “at least” three months.
As BTC/USD $4250.33 +0.2% appears to close in on $4500, meanwhile, other proponents are highlighting the cryptocurrency’s strength as an investment despite the volatility.
In data uploaded to Twitter, one commentator noted Bitcoin has outperformed Amazon stock (AMZN) for five out of the past seven years.
Adding what he described as a “crazy” prediction, he added Bitcoin should ultimately beat Amazon’s $880 billion market cap within the next decade.
Bitcoin currently has a market cap of $73 billion, itself up $7 billion in just two days.
‘SHORT-LIVED OPPORTUNITY’ FOR $2K
Beyond the cryptocurrency scene, tech and FAANG stocks including Amazon began recovering this week, fuelling a positive relationship, which has seen Bitcoin react in kind to recent upheaval.
In comments which could be mistaken for a Bitcoin price forecast, Credit Suisse strategist Jonathan Golub suggested a return to form for those stocks was inbound but it “is not the bull market you knew before.”
“In the near term I think tech is going to bounce very hard,” he told CNBC’s ‘Fast Money.’
In separate Bitcoin-specific comments to the network Wednesday meanwhile, BlackTower Capital partner Michael Bucella warned that BTC/USD may not have completed its “distress cycle” and could shed another 50 percent of its price in a “one more leg lower.”
“But I think that opportunity will be very short lived, and I think the level we’re at right now is a great long-term entry point if you’re accumulating,” he summarized.
Colorado regulators look beyond coin offerings for other cryptocurrency fraud
A special task force to investigate cryptocurrency shenanigans will continue after Gerald Rome leaves his post Friday as commissioner for the Colorado Division of Securities.
The task force, created over the summer, has four staff members investigating potentially fraudulent activity involving cryptocurrency offerings. It has since expanded its scope to include other crypto investments.
“Once you devote staff time to it, you start learning a lot,” said Rome, whose office has sinceMay ordered 18 cryptocurrency offerings to cease and desist, with two more expected. “We’re expanding our approach a little bit. We’ve identified some hedge funds in Colorado that are investing in cryptocurrencies.”
Rome’s replacement, Chris Myklebust, the state’s former Bank and Financial Services Commissioner, starts Monday. Myklebust said there still is work to be done to protect consumers against suspicious investments in the guise of initial coin offerings, or ICOs.
Chris Myklebust. (Handout)
“Commissioner Rome and I have had the opportunity to review and discuss the ICO Task Force and its mission at length, and I’m confident that, for the time being, the work being done is important and necessary,” Myklebust said. “That being said, the cryptocurrency space is constantly evolving and changing, and as such, I intend to keep the division’s approach to it flexible and to do the work of protecting Colorado investors where it’s needed most.”
Cryptocurrency is still a largely unregulated technology, although the U.S. Securities and Exchange Commission has issued several enforcement actions against companies that violate federal securities laws.
The lack of clarity over whether a coin is a security or a utility, like a video-game token, frustrates many in the local blockchain community. As in any new industry, there are bad guys, but there are also a lot of good startups trying to figure out the right approach, said John Paller, co-founder of ETHDenver, an event for the Ethereum blockchain community.
“No one is stopping us from going to the corner store and investing in the Powerball when it’s at $400 million. I can drop thousands of dollars. Why can I do that but not invest in the startup I’m choosing to support,” Paller said. “It’s finding the balance. Regulators should take very seriously this innovation that is nigh upon us.”
Yev Muchnik, a corporate and securities attorney at Launch Legal in Denver, said she has worked with members of the Department of Regulatory Agencies. She understands a regulator’s job but called the system “somewhat archaic.”
“While fulfilling their much-needed role of protectionism within the confines of the law, there is a snowball of technological innovation challenging how we raise capital, authenticate information and transact, which naturally doesn’t fit so squarely into our round hole of regulations,” Muchnik said in an email.
Her advice to incoming Myklebust? Find the balance that doesn’t stifle growth or spur an exodus of entrepreneurs out of Colorado or the United States.
Do this, she said, by “taking (the) pulse of the Colorado market by exploring ideas and business ventures and sitting down with entrepreneurs to understand how they are using blockchain technology to make significant advances in our day-to-day lives.”
In an interview Tuesday, Rome said he created the task force after legislation was introduced by the blockchain community earlier this year to clarify what makes a token a security or a utility. His staff wasn’t consulted about changing securities law, and he opposed it. The proposed law fell short by one vote.
The task force initially targeted coin investments open to Coloradans, although they didn’t specifically target Coloradans, he said. Some ICOs won’t sell to consumers in the U.S. because of concerns from federal regulators. For the most part, the task force only looked at offerings online and did not interact with promoters until the cease-and-desist letter was sent.
“You’d look at their white paper online and see they were promising a 2 percent profit daily, and we know that isn’t happening,” Rome said. “With the help of the internet, we found some of these sites were lifting images from other companies, indicating they were fraudulent.” Some even spoofed the HoweyCoins website, a fake site set up by the SEC, Rome said.
Rome said his agency began paying attention to the cryptocurrency industry after bitcoin, the most popular coin, rose to a spectacular high value of $20,000 in December. Bitcoin’s value has since dropped 80 percent, trading Tuesday at around $3,800, according to cryptocurrency exchange site Coinbase.
“To have the excitement with how high it went, along with true believers, is just a recipe for people to lose significant amounts of money if they are not careful,” Rome said. “Part of what we did was to send out warnings to investors. We’re out in the space, and we’re finding almost all of it is fraudulent, so be careful. And I think Chris (Myklebust) agrees with this: Our mission is investor protection. We’re not out just to get the bad guys.”
The task force’s investigations have expanded into hedge funds that are investing in questionable crypto-related companies. If the funds are not disclosing the risks to investors, then they too are sidestepping the law.
But Rome, who is retiring, won’t be part of any changes to Colorado laws regarding securities. He leaves that to Myklebust, who will continue to work with the Colorado Blockchain Council, a group created by Gov. John Hickenlooper to figure out how to regulate the blockchain community while allowing it to thrive.
“Chris knows we’ve made it a priority with our office,” Rome said. “The blockchain council has subgroups, and we’ve assigned staff to … the securities law subgroup. That would deal with the issue of utility tokens, which was a big issue for the legislature. Doing it through the council like this is evolving it in the right way because you have a more balanced approach. That product will likely end up in a bill at the statehouse.”
Unbound Tech offers Blockchain Developers Solutions with Bank-grade Security
Unbound Tech has unveiled a range of libraries aimed at improving security of blockchain projects
The libraries rely on private key splitting as one of the protection layers from hacker attacks
According to a recent announcement by Unbound Tech, formerly known as Dyadic Security, the firm is the first to offer open-source bank-grade security solution to blockchain community. The solution in question is the company’s newest blockchain-crypto-mpc library that is able to protect cryptographic keys by utilizing the MPC-based solution also used by Fortune 500. It is available for download on GitHub and is free.
Unbound offers three types of libraries:
The blockchain-crypto-mpc library – targeted at crypto asset wallet developers
Pro Library – targeted at technology platform providers, integrators and commercial wallets
CASP – targeted at exchanges, banks and institutional custodians of crypto assets
As practice has shown, most existing solutions designed for protecting cryptographic keys and other secret information incorporated in blockchain products are not safe enough. The solution of Unbound, on the other hand, grants developers a blockchain-crypto-mpc library designated for creating applications, such as wallets, that guarantees the powerful protction of cryptographic signing keys and seed secrets.
Splitting the Keys for Security
The library is based on SMPC (short for Secure Multi-Party Computation). The main improvement compared to previous systems is Unbound’s in-house technology that allows all of the operations to be made with the private keys separated into several parts. At no point of any operation do the keys or seeds exist in their original, complete form, which makes the system practically invulnerable to hackers’ attacks.
The only way for hacker attack to be successful is to breach all the machines at the same times, which is nearly impossible. Unless that happens, the keys can’t be used for signing a transaction or compromised in any way. Because No key material or secret is ever in the memory, the developers of wallets can guarantee the highest level of key protection built into their offerings. What’s more, it is needless to rely on options like ledger-specific mechanisms such as multi-signature, hardware security modules (HSMs), which can be expensive, or appliance-as-a-service.
Why are developers going to benefit?
Unbound’s solution offers a range of benefits for developers. Company’s Blockchain Crypto MPC is a low-level API that can be compiled into virtually any platform. Wallet developers gain security that’s fully built into the application through blockchain-crypto-mpc; also, the solution does not rely on expensive external hardware. Furthermore, they are not limited to ledger-specific mechanisms, for example, multi-signature – all while gaining the advantage of sharing private key control between different agents without the need for several keys offered by MPC.
French CNIL Talks GDPR and Blockchain Compatibility
Uncertainty regarding the compatibility of blockchain technology and the European Union’s General Data Protection Regulation (GDPR) has often been highlighted as a potential obstacle to the development and widespread implementation of blockchain systems involving personal data.
To address tensions between blockchain technology and the GDPR, Commission Nationale de l’Informatique et des Libertés (CNIL), the French data protection regulator, published an initial report analyzing certain fundamental questions regarding the interaction between blockchain technology and the GDPR’s requirements (the “Report”). The Report was the first guidance issued by a European data protection regulator on this topic.
CNIL’s Approach to Identifying Blockchain Data Controllers and Data Processors
The Report highlights the challenges of identifying data controllers and data processors in the blockchain context – an important distinction that determines which set of regulatory obligations applies.
In discussing the likely classification of the various types of persons and entities involved in a blockchain, the CNIL primarily distinguished between (i) participants (i.e., those who transact on the blockchain) that have the ability to determine what data will be entered into a blockchain or have permission to write on it or cause data to be written to it, and (ii) miners or other validators (i.e., those who do not transact and instead validate transactions submitted by participants). The CNIL also provided an analysis as to how to classify smart contract developers and natural persons who enter personal data in a blockchain, distinguishing, with respect to the latter, between those engaging in personal or household activities and those engaging in professional or commercial activities.
Participants: According to the CNIL, because the participants on a blockchain determine the purposes and means of processing of the personal data (e.g., data formatting, use of blockchain technology for such processing, etc.), they should be deemed data controllers. If a group of participants establishes a blockchain for a common purpose, the CNIL recommends designating a data controller by either creating a company for the purpose of being the controller or contractually designating one of the participants as the controller (in which case the other participants may be considered processors). In the absence of such an arrangement, all participants could be deemed joint controllers under the GDPR.
Miners/Validators: Since validators only validate data to be recorded on a blockchain, the CNIL believes that they are likely not data controllers. Validators can, however, be deemed data processors if they process personal data on behalf of a controller – for example, by executing the instructions of the controller when they verify a transaction submitted by the controller. Article 28 of the GDPR imposes an obligation in such a case to have a written contract in place, which the CNIL acknowledged as potentially posing a number of practical issues, especially in blockchain networks in which participants and validators do not have formal agreements with each other.
Natural persons who enter personal data in a blockchain for personal and household activities, as opposed to as part of professional or commercial activities: In the CNIL’s view, a natural person who sells or purchases cryptocurrency, for example, for his or her own account is not a data controller, whereas a natural person that conducts such transactions as part of professional or commercial activities (e.g., on behalf of other natural persons) may be considered a data controller.
Smart contract developers: The CNIL explains that smart contract developers could, depending on the circumstances, be considered either controllers or processors (or neither), as is the case for other types of software developers. For example, a developer that processes data on behalf of the blockchain participant could be considered a processor, whereas a developer that participates in determining the purposes and means of processing could be considered a controller. The point at which a smart contract developer falls into either (or neither) of those categories is not yet clear.
Permissioned and Public Blockchains
In the Report, the CNIL recognizes that the GDPR was designed to respond to a world of centralized data management, whereas a key feature of blockchain technology is its decentralized model. The CNIL notes that public blockchains pose a greater challenge for GDPR compliance than permissioned (also referred to as “private”) blockchains. With respect to public blockchains, the CNIL encourages the development of solutions that would facilitate putting requisite contractual agreements in place between the participants and validators if the validators meet the criteria to be considered as data processors.
Minimizing Data Protection Risks in the Context of Blockchain Technology
Privacy by design: Article 25 of the GDPR requires data controllers to establish appropriate technical and organizational measures to implement data protection principles and safeguard individual rights (a concept often referred to as “privacy by design”). In the CNIL’s view, given the GDPR’s requirement of privacy by design, blockchain technology may not be a suitable technology where a transfer of personal data outside of the EU is involved. With respect to public blockchains, the data transfer mechanisms commonly used to enable such data transfers to comply with the GDPR (model contracts and binding corporate rules) may be difficult to implement because controllers may not be able to exercise control over the validators’ locations or effectively enter into the necessary written agreements with them all. Where a transfer of personal data outside the EU is involved, permissioned blockchains are preferable to public blockchains because the controller can exercise more control over how personal data is treated, and the commonly used data transfer mechanisms are more compatible with permissioned blockchains, in which participants are approved, known and more likely to have formal business relationships outside of the blockchain.
Limited Retention Periods: Under the GDPR, personal data cannot be kept indefinitely. A retention period must be determined based on the purpose for which the data is being processed. The CNIL holds the view that the limited retention period required under the GDPR is, on its face, a clear incompatibility between the typical blockchain structure and the GDPR. It notes as an example that certain data must be kept for the lifetime of a typical blockchain – namely, the participants’ identifiers or public keys – since the architecture of a blockchain usually requires identifiers to remain in the blockchain.
Encryption: The CNIL generally advised that unencrypted personal data should be stored off-chain and that any personal data stored on a blockchain should be encrypted. The CNIL did acknowledge that there may be some circumstances in which personal data that is subject to lesser cryptographic protection (or even personal data that is unencrypted) may be stored on a blockchain in compliance with the GDPR. It noted, however, that this would only be acceptable where the purpose of processing warrants such storage (perhaps for data controllers that have a legal obligation to make certain information public and accessible, the CNIL suggested) and a data impact assessment shows that the associated risks are minimal for the applicable data subjects.
Data Subject Rights Under the GDPR
The CNIL acknowledged that certain data subject rights under the GDPR (the right to be informed, the right of access and the right to data portability) can be satisfied in the context of blockchain technology. However, it noted that other data subject rights under the GDPR, including the right to object, the right to rectification and the right of erasure, conflict with fundamental attributes of a classic blockchain. With respect to those rights, the CNIL suggested that, although an imperfect solution, implementing technical measures to achieve results that are practically the same as those intended by such rights may be a path to deemed compliance with those rights. For example:
Regarding the right of erasure, the CNIL stated that using technical solutions that render the data “almost inaccessible” (e.g., by removing the private key from the hash function, which would make verifying which information was hashed in the first place impossible) could be one way to achieve compliance, even though the data technically still resides on the blockchain.
Regarding the right to rectification, the CNIL noted that the rectified data could be entered into a new block in a subsequent transaction that would supersede the previous one. The superseded transaction would remain in the blockchain, however, and to address this issue the CNIL suggested that the data containing the error could then be treated with the same technical solutions as the ones recommended by the CNIL to render data “almost inaccessible” in the context of the right of erasure.
Automated Decision-Making and Smart Contracts
The CNIL also analyzed the interaction between blockchain technology and the data subject’s right not to be subject to a decision based solely on automated processing that produces legal effects concerning him or her or similarly significantly affects him or her (referred to as “automated individual decision-making”).
The GDPR provides that automated individual decision-making is only permitted in limited instances, including when the data subject has provided explicit consent or if it is necessary to perform a contract with the data subject. The CNIL acknowledges that, in the case of smart contracts, automated individual decision-making may be necessary for the performance of a contract and therefore may be permitted under the GDPR.
In the context of smart contracts, the CNIL suggested that controllers should provide for the possibility of human intervention to allow automated decisions to be challenged by data subjects, even if the contract has already been executed.
The CNIL recognized that the Report is a preliminary analysis, acknowledged that a number of questions remain unanswered, and invited the blockchain sector and other EU data protection regulators to find creative solutions for reconciling blockchain technology with the strict requirements of the GDPR. The CNIL also expressed an interest in working with other regulators on specific blockchain regulations, such as, for example, with the French financial markets regulator, Autorité des Marchés Financiers (AMF). In October of 2018, the Assemblée Nationale (the French equivalent of the House of Representatives) adopted a proposed regulation regarding crypto assets and initial coin offerings (ICOs) that, if approved by the French Senate, would result in the involvement of the AMF in certain ICO transactions, making it likely that the CNIL and the AMF will collaborate and opine on the specific data privacy issues raised by ICOs.
SophiaTX blockchain chosen to accelerate development of Malaysia’s automotive industry
The team of SophiaTX, a blockchain for business, has announced they have been selected to push forward blockchain initiatives for the Malaysian automotive and mobility sector with the signing of a Memorandum of Agreement between Crypto Valley Malaysia and Malaysian Automotive Institute.
On November 27, 2018, a Memorandum of Agreement was signed between Malaysia Automotive Institute (MAI) – an agency under the Ministry of International Trade and Industry (MITI) – and Crypto Valley Malaysia (CVM) – a hybrid exponential technologies research and innovation center. The main purpose of this collaboration is furthering blockchain technologies and initiatives aimed at pushing forward the national Industry4WRD policy.
Utilizing the SophiaTX Blockchain, integrated with enterprise systems such as SAP, the two sides are focused on improving supply chain efficiency and transforming the after-sales and service sectors through reputation economy 2.0.
“Through the deployment of SophiaTX blockchain, we aim to deliver greater efficiencies, enable higher collaboration along the value chain and reimagine new business models, especially when it comes to ownership and use of shared assets,” said Co-founder of CVM, Effendy Zulkifly.
The SophiaTX Blockchain will be principally used to address common automotive challenges, such as the opaque end-to-end supply chain visibility, providing insights into current and planned demand along with tracking critical items, inventory, delivery times, improper management of order changes, and limitations of supply at any desired level of the product hierarchy.
Using the blockchain, information shared in such complex multi-tier supply chain ecosystems will be streamlined, and maximum accuracy and availability of information for all included parties will be secured. Committed to embracing integrated blockchain innovations, SophiaTX seeks to enable the industrialization of the businesses, leading to significant productivity increases.
Speaking on the occasion, here’s what Dato’ Madani Sahari, CEO of Malaysia Automotive Institute (MAI), had to say:
“As the industry begins to recognize the immense potential of blockchain and how it can redefine the automotive industry, it is essential for governments and businesses alike to adapt as technology evolves through strategic partnerships to make transportation more efficient, affordable, accessible, safer, and greener. This is what we would like to advance together with CVM and we’re pleased to be part of this collaboration.”
“With years of global and local experience and commitment, we continue to make progress on our transformation journey through collaboration with our extensive network of partners and industry experts across the integrated value chain. Focused on competing in the industry 4.0 era, we are now seeing the results and are ready to take our blockchain to the national automotive and mobility space to drive greater transparency of information, improve timely logistics, validate authenticity of spare parts, and reduce erroneous orders.”
Fintech firm Revolut gets green light to expand to Japan and Singapore
The London-based financial technology firm said Thursday that it had acquired a remittance license from the Monetary Authority of Singapore and full authorization from Japan's Financial Services Agency.
Revolut offers users a prepaid debit card and a current account, as well as premium features like cryptocurrency trading and free unlimited foreign exchange.
It said Thursday that it intends to launch its platform in the Asia-Pacific (APAC) region in the first quarter of 2019, and is looking to select Singapore to host its APAC headquarters.
"We have confidence that Revolut will continue to be a driving force as we expand globally, developing a range of exciting new services for increasingly connected consumers in APAC," Revolut Chief Executive Nikolay Storonsky said in a statement Thursday.
"It's a huge market and we're already seeing an incredible amount of people demanding our product."
More than 50,000 people in the APAC region have signed up to a waiting list to create an account with Revolut, the firm said.
Revolut added that it is working with Singapore's central bank to advise on legislation being tabled in the country's parliament and aimed at streamlining payments regulation under one single piece of legislation.
Revolut has experienced significant growth since it was founded three years ago. It now has a total of 3.2 million customers registered with the app — up 60 percent from the 2 million user count it announced in June — and has processed 245 million transactions with a total transaction volume of more than $32 billion to date.
Investors have poured a total of $336 million into Revolut, with its most recent $250 million funding round giving it a valuation of $1.7 billion. Notable backers of the firm include early Facebookinvestor DST Global and Dropbox backer Index Ventures.
A recent report by The Times of London said that Revolut is in talks with Japanese tech investment giant SoftBank to raise a fresh round of funding, and that it could rake in as much as $500 million. Revolut declined to comment on that report when contacted by CNBC at the time.
US GOV’T SANCTIONS FIRST BITCOIN ADDRESSES
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has taken action against two Iranian ransomware “facilitators.” The actions include publishing the perp’s cryptocurrency wallet addresses, and warning the cryptocurrency and financial communities that anyone transacting with the accused could be subject to secondary sanctions.
INVOLVEMENT IN THE SAMSAM RANSOMWARE ATTACKS
The OFAC stated that the two “Iran-based individuals,” are Ali Khorashadizadeh and Mohammad Ghorbaniyan. According to a U.S Treasury press release today they helped exchange Bitcoin ransom payments, obtained by “Iranian malicious cyber actors” involved in the SamSam ransomware scheme, into Iranian rial.
Khorashadizadeh and Ghorbaniyan are designated for:
Having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the SamSam ransomware attacks.
OFAC has identified and published the two wallet addresses associated with the “facilitators.” The cryptocurrency wallet addresses processed around 6,000-7,000 Bitcoin (BTC) $4304.79 +0.34%transactions across 40 cryptocurrency exchanges. Even at today’s Bitcoin price, this would equate to a value of over $25 million.
The U.S Department of Justice has also indicted two actors for infecting over 200 networks with SamSam ransomware in the U.S, UK, and Canada since 2015. One hospital in Indiana lost all its IT networks during storms, leading them to pay the ransom to protect patients.
The news quickly sparked a conversation on social media.
1/ BREAKING: For the first time in history, the US has sanctioned a bitcoin address. https://t.co/5iFmXAaF8l
— Marco Santori (@msantoriESQ) November 28, 2018
1/ Today, the US Department of the Treasury, through the Office of Foreign Assets Control (OFAC) took the historic step of adding two Bitcoin addresses to its list of sanctioned parties. In this thread, I'll break down what that means.
— Marco Santori (@msantoriESQ) November 28, 2018
FIRST PUBLISHING OF WALLET ADDRESSES
OFAC says that although it usually shares “identifiers” with designated people:
Today’s action marks the first time OFAC is publicly attributing digital currency addresses to designated individuals.
The operators recognizing or finding the published wallet addresses are required to comply with OFAC obligations regardless of whether transactions are conducted in fiat or digital currency:
Like traditional identifiers, these digital currency addresses should assist those in the compliance and digital currency communities in identifying transactions and funds that must be blocked and investigating any connections to these addresses.
Any property or financial “interests” of the individuals are now subject to OFAC sanctions and “U.S. persons generally are prohibited from dealing with them.”
The Treasury and OFAC actions today are part of a wider round of sanctions and “U.S economic pressure” targeting Iran “designed to blunt the broad spectrum of the Iranian regime’s malign activities and compel the regime to change its behavior.”
Treasury Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker warns:
Treasury will aggressively pursue Iran and other rogue regimes attempting to exploit digital currencies and weaknesses in cyber and AML/CFT safeguards to further their nefarious objectives.
Japanese Video Platform Pays Users Crypto to Watch Ads
A Japanese video platform service called c0ban.tv has started its expansion into English-speaking markets, the startup team has reported to Cointelegraph. The platform has its own cryptocurrency and has been developed by the LastRoots corporation, famous for its popular cryptocurrency exchange.
Buying lunch with crypto
The c0ban.tv platform publishes short video ads, already with over 50,000 active users and 5 million transactions per month, according to the startup team.
The concept of c0ban is based on combining blockchain and video advertisement. The core idea of c0ban is that a user can get paid with c0ban coins (RYO) for watching advertisement videos posted on c0ban’s web application.
This c0ban mechanism is similar to websites that offer reward points to their users. In order to get rewards, a user needs to sign in to the c0ban.tv web application and watch the videos that appear on the screen.
There are three huge problems for the video advertising market that the industry faces right now: Users tend to skip video ads, they do not watch them in full and the current ads are not cost effective. According to the c0ban team, their application and platform can solve these problems by paying users to watch videos.
According to c0ban fans blog, there are stores in Japan that accept RYO. Users can, for instance, watch a few videos, get paid with c0ban cryptos and buy lunch with those coins. Although the number of such stores is still quite small, LastRoots is actively working to expand, a company’s representative told Cointelegraph.
Middle age samurai coin
“C0ban is named after a Middle Ages Samurai coin, named Koban. C0ban is the first challenge for us to spread the technology to the world. We will be pleased if we could provide a trigger to people to feel the revolutionary world of decentralized consensus,” reads the c0ban website.
According to the website, c0ban is a proof-of-work (PoW) cryptocurrency that is designed to make it easy for everyone to enter the blockchain world. The genesis block was mined on Dec. 15, 2016 and so far over 26,000,000 RYO have been issued. The target number is 88,000,000 RYO.
С0ban.tv held one of the first ICOs in Japan in July 2016 and succeeded in raising about $6 million. Its app was released in February 2017, with the cryptocurrency listed on a Japanese exchange in March 2017. Today, the c0ban trade volume has reached 100 million trades.
On Nov. 30, c0ban will be listed on the Latoken exchange and will be able to be traded for Bitcoin and Ethereum. The c0ban cryptocurrency has been on the market since Dec. 15, 2016, when it was officially launched. The c0ban startup team has decided to move forward and expand worldwide, making its way to a broader audience.
Fidelity Investments’ Crypto Venture Capital Fund Activates Again, Significant Innovation Coming
Fidelity Investments, one of the largest investment companies in the world in custody and execution of assets, has revived its crypto venture fund. As the company is responsible for holding and managing over $2.5 trillion USD in funds, this is huge news.
While the company was able to raise some eyebrows when it announced that it would launch Fidelity Digital Assets, a custody and execution platform aimed at digital assets, this new fund is almost as surprising as that.
Originally, the company was able to launch what was known as an “exploratory fund” for crypto and digital assets. The fund was originally created in 2017 and, while it served its purpose at the time, some key people at the company left and the fund died.
Now, The Block Crypto has talked to inside sources and they affirm that the once dead VC fund for cryptos is now back up again with a new fund manager. While the source is unknown, the original media outlet that reported on the story affirmed that this is happening.
The Old Crypto Fund
The original fund, as we’ve said, was started last year. At the time, it was managed by Nic Carter and Matt Walsh. They used the capital from Fidelity to invest in crypto assets that looked profitable at the time.
Why was the fund shut down? Because both Carter and Walsh left the company to start a new one called Castle Island Ventures. This company is a VC fund focused on Bitcoin.
While this meant that the fund was basically dead at the time as the two experts who spearheaded the idea left the company, it looks like now Fidelity is interested in the market again. The new fund will be overseen by Sachin Patodia, an executive that already worked in the company for 11 years. The new version of the fund will be allegedly bigger and considerably more ambitious than its older version.
Fidelity, Crypto and An Ambitious Plan
It’s clear that Fidelity is eyeing cryptos now. The efforts of the company to understand this market began way before the last bull run, in 2014. The firm has also examined how mining worked in 2015 and made an important partnership with Coinbase last year, in which it allowed for its clients to view their crypto holding on the crypto exchange.
Now, it is clear that the company has deemed cryptos interesting enough to invest more aggressively in them. While the plan is not yet clear, it is certainly ambitious, that much you can be sure of.
With the bear market now in place, the company will have its chance to buy the assets at a low price and less them high later when the inevitable bull run happens once more.
ICO Market is Dead: Crypto Investor Barry Silbert
The ICO market is dead, but that won’t hamper the inevitable growth of the cryptocurrency market, says Barry Silbert, the founder of crypto investment fund Digital Currency Group.
Silbert said the frenzy for initial coin offerings in 2017 fueled the meteoric spike in bitcoin prices, but now the ICO market has been decimated, resulting in the mass sell-off we’re seeing now.
“The ICO market is dead — over,” Silbert told CNBC on November 27 (video below). “You now have the lack of demand from ICOs. And you have all the sponsors of the ICOs who raised a bunch of bitcoin [and ether] that are now starting to sell that.”
Silbert: Tech Sector Slump Is Pressuring Crypto
Silbert said it’s not surprising that the cryptocurrency market is suffering right now because so is the tech sector.
He explained that two sectors move in tandem because there are pools of overlap between investments in tech stocks and the crypto asset class.
Silbert echoed the assessment of Fundstrat’s Tom Lee, who said the downturn in tech stocks is partially responsible for the slump in the crypto industry.
“As growth stocks, tech, and FAANG come under pressure, it’s going to hurt bitcoin,” Lee reasoned.
Despite the recent drop-off, Lee remains bullish, calling the bitcoin implosion an “awkward transition” that will pass. Accordingly, Lee stands by his exuberant $15,000 bitcoin price target for 2018, as CCN reported.
Doubling Down: Tom Lee Won’t Abandon $15,000 Year-End Bitcoin Price Forecast https://t.co/406hAEMi5i
— CCN (@CryptoCoinsNews) November 20, 2018
While crypto bears are running for the exits, Silbert isn’t frazzled by the market’s erratic fluctuations because those are inevitable growing pains that accompany any new phenomenon.
Silbert said you have to look back at past bubbles and corrections to gain perspective.
“We’re 5, 6, 7, times through this now,” he said. “The first couple of times you see your balance sheet drop by 80 percent, it’s kind of rough on the stomach. By the third or fourth time, you get used to it. Now we view this as a fantastic opportunity.”
Institutions Are Knocking On Crypto’s Door
Silbert said remarkable things are occurring below the surface that are not being reflected in the market’s mundane obsession with daily bitcoin price movements.
Institutional investors are starting to get involved in the space — and that’s a game-changing development that will transform the industry.
“What’s happening behind the scenes is companies are being built to create infrastructure to enable the on-boarding of a whole new category of investors, which I think is going to happen in 2019,” he said. “That’s the institutional investors. So behind the scenes, nobody has slowed down.”
Breaking: What Crypto Winter? Nasdaq to Launch Bitcoin Futures Market https://t.co/EHeog8TPJ3
— CCN (@CryptoCoinsNews) November 27, 2018
As CCN reported, a landmark event occurred in October 2018, when Harvard, Dartmouth, MIT, Yale, and Stanford announced that their multi-billion-dollar university endowments had started investing in cryptocurrencies.
The move was widely viewed as an unmistakable signal of institutional confidence in crypto as investment vehicles.
While the universities’ respective allocations to crypto is reportedly small, keep in mind that the combined endowments of the six universities currently invested in crypto is a staggering $108 billion.
Consider this: Harvard’s endowment is $37 billion, so even a 1% allocation to crypto tops a whopping $370 million.
‘Miners Are Long-Term Investors’
When asked about escalating mining costs, Barry Silbert said bitcoin mining costs are not the proper benchmark with which to value the asset class.
“I don’t agree with the premise that bitcoin mining costs should be used as a good entry point,” Silbert said. “You have to separate the investment decision that a miner is making from the operating cost for them to mine the bitcoin.”
Silbert said cryptocurrency mining operations have a long-term focus; they’re not thinking about short-term gains.
“Miners are long-term investors,” he explained. “The mining businesses that have been created over the past five years have accumulated massive amounts of capital. They have the ability to continue mining at a loss [because they’re going long].”
As CCN reported, crypto mining firm Coinmint plans to invest up to $700 million to build the world’s largest bitcoin mining center in Upstate New York.
— VTOS FOUNDATION (@VTOSFOUNDATION) June 7, 2018
Coinmint has already invested $50 million so far to convert a 1,300-acre Alcoa aluminum smelting plant in Massena, New York.
The new crypto mining farm is projected to create 150 new jobs, and is expected to be fully operational by June 2019.
Coinmint signed a 10-year lease on the property, signaling its confidence that despite bitcoin’s recent slump, it believes crypto is here to stay.
FIRST BITCOIN ATM INSTALLED IN ECB’S OWN BACKYARD
Germany has just got its second Bitcoin ATM in Frankfurt, home of the European Central Bank, as the total worldwide machine count hits 4000 for the first time.
BITCOIN ATM ARRIVES IN FRANKFURT
As local media reported November 23, Bitcoin-Store Frankfurt in Germany’s financial center and home of the European Central Bank (ECB) is now home to one of only two BTMs currently operational in the country.
Under the auspices of founder Oliver Pangratz, Bitcoin-Store exists as a brick-and-mortar cryptocurrency guide, offering in-person assistance with all aspects of Bitcoin including helping consumers open wallets and send transactions.
“A relatively small group of people have knowledge of cryptocurrencies in Germany at present,” Pangratz told local news program Hessenschau Monday.
…At Bitcoin-Store we want to get people a bit more enthused about the topic.
Unlike the US, which now boasts 2370 BTMs according to data from CoinATMRadar, Germany is one of the most sparsely-populated jurisdictions for Bitcoin buying and selling options.
The reason behind the lack of progress remains regulation. As Bitcoinist reported, only a court decision allowed legitimate operation of machines this month, a situation which finance regulator BaFin has suggested may not last.
“Whether the ATM will be found in Munich for a longer period remains unclear and depends on how long the judgment can remain in force,” media reported after the BTM appeared in a Munich casino.
COINSOURCE PUSHES FOR US-WIDE PRESENCE
Across the Atlantic, meanwhile, the competitive push to cast BTMs far and wide has continued in recent months.
Coinsource, one operator which has installed around 200 machines in various US states, finally received its BitLicense from New York regulators at the start of November.
Planning a presence in all 50 states, the company is one of several laying the foundations for a future surge in consumer-level interest.
“This expansion is not only a step in the right direction for mainstream adoption, but should also be seen as a case study for other companies to make every effort to remain compliant with current regulations,” LeapRate quoted Coinsource general counsel Arnold Spencer as saying Wednesday.
Judge Slaps Down SEC Attempt to Label ICO Token as Security
US District Judge Gonzalo Curiel of the Southern District of California declared yesterday that the Securities and Exchange Commission (SEC) had failed to demonstrate that the Blockvest ICO met the characteristics of a security under US law. The case will go to trial, as such.
There are three important metrics involved in determining whether a token or financial product is indeed a security, dating back to a 1946 case, and the one that Judge Curiel decided was not satisfied was that investors had expected to make a profit on the tokens.
Blockvest played all kinds of loose in the offering of its ICO tokens. The SEC alleges that Blockvest even made up the Blockchain Exchange Commission with the express purpose of lulling investors into believing they were a regulated investment offering. However, the BEC does seem to exist, just not in any sort of official government capacity.
According to the judge, the SEC was unable to prove what promotional materials that investors – who numbered only 32 and whose total investment was under $10,000 – had responded to. While the SEC was able to demonstrate that investors were purchasing coins due to evidence shown on checks cashed, the judge did not feel this satisfied the evidence requirements in the Howey Test.
Nothing To See Here, Your Honor
In a brilliant defense, Blockvest claimed its tokens were only used for testing of the exchange, nothing more. The meat and potatoes of the defense was also that the majority of the people “investing” were friends known well to defendant Reginald Buddy Ringgold III, and that claims they had made online regarding the raising of “$2.5 million” were overly optimistic, relied on a single investor, and that that deal had fallen through.
In denying the injunction request, the judge found that the defendants had already agreed not to pursue the ICO and that the SEC had insufficiently proven previous wrongdoing on the part of Blockvest. Therefore, the judge saw no reason for the injunction.
It is important to note that this does not mean that Blockvest is off the hook. Not by a long shot. SEC surely doesn’t take kindly to people falsely representing that they have its approval, and the defense has not disputed the fact that they failed to register, which is a crime in and of itself. SEC could amend its approach and try for relief in another court in further attempts to punish Blockvest. Ultimately the most important takeaway is the reason that the judge felt BLV tokens are not securities – according to him, the way they were marketed and sold did not adequately meet the standard of such. The result is that BLV tokens are not technically considered securities at this time, and:
“Based on the above, the Court DENIES Plaintiff’s motion for preliminary injunction. The Court also DENIES Defendants’ ex parte motion for evidentiary hearing and leave of court to file supplemental declarations. (Dkt. No. 30.) The Court also STRIKES Plaintiff’s Supplemental Declaration of David Brown and Defendants’ Opposition and Response. (Dkt. Nos. 39, 40.)”
Thus, Blockvest’s assets are apparently unfrozen. According to their lawyer Stanley Morris, it’s not over, as he told Law.com:
“Relieved of the constraints of the TRO, our clients are now free to defend themselves through trial and look forward to being vindicated.”
China’s CCID Crypto Project Rankings Wise Up, Moving Bitcoin to #13 as EOS #1 ETH #2 Stay at Top
BTC has moved up on the rankings of a crypto project ranking ledger issued by China’s Center for Information and Industry Development (CCID). Other cryptocurrency platforms that are still high on the list are EOS and Ethereum.
The CCID is operated by China’s Ministry Industry and Information Technology. Every year, the CCID evaluates cryptocurrency projects and issues a ranking. This year, EOS and Ethereum are still high on the list and their rankings have not changed much. As for BTC, it moved up for 19th place to 13th place. Some contend that the move has to do with bitcoin’s hard fork on November 15. The list features a total of 33 cryptocurrency projects.
Rankings are based on several factors, such as applicability, technology, and creativity. When it comes to creativity, bitcoin seems to be at the top of the list, and EOS is ranked highest in technology. As for Ethereum, it ranks first in applicability. Interestingly, the CCID constantly evaluates and optimizes its evaluation methods depending upon recommendations by working groups and consultants. The CCID then ranks and organizes the recommendations.
There are three underlying principles to the evaluation model as well, and they include “the indicators should be adapted to all evaluated objects, not just some; the proposed indicators should be related to technological innovation in public chains; and the measurements or evaluation of the indicators can be implemented.” Concerning future projects, the center stated, “CCID Blockchain Research Institute will also launch and in-depth evaluation report and application development report for public chains. We will also launch an advisory serve and report on public chain technology assessment.”
2weeks ago, 28 Nov, Wednesday
Texas Securities Commissioner Issues Cease and Desist Order to Crypto Investment Firm
The Securities Commissioner of the U.S. State of Texas has issued an Emergency Cease & Desist Order (C&D) against crypto investment firm My Crypto Mine and its principal Mark Steven Royer, published to the regulator’s website Nov. 27.
The C&D claims that “sufficient evidence has been found” to substantiate that Royer, “acting on behalf of a white-collar criminal [Bruce Bise] and disbarred attorney [Samuel Mendez], offered tokens that are now nearly worthless” via a crypto investment scheme dubbed “BitQyk.”
The document does not disclose details surrounding Bise’s status as a “white collar criminal,” but states that Mendez was disbarred as an attorney after “committing acts of dishonesty and moral turpitude by misappropriating funds.”
In May 2017, Royer is alleged to have joined Bise and Mendez in encouraging investors who “missed out” on Bitcoin to invest in the bitqy token, then priced at $0.02, but promised to rise to as high as $3.00 “in the indefinite future.” In truth, the token shed 99 percent of its value by Nov. 11, 2018. Investors who purchased the token at the time of Royer’s offering thus “lost almost the entirety of their principal investment.”
At present, Royer is principal of “purported” crypto trading and mining specialist My Crypto Mine. Without disclosing his previous affiliation with BitQyck, Bise and Mendez, Royer has instead claimed to investors that he has over thirty years’ experience in the IT sector and ten years of involvement in crypto, among other misleading material claims related to the My Crypto Mine itself.
My Crypto Mine, as per the C&D, is now “issuing a passive investment tied to cryptocurrency trading and mining that purports to provide guaranteed, lucrative returns.”
Neither the investments nor the dealers are registered with the Texan authorities; the respondents are further charged with disclosure failures — in regard to both business credentials and the concrete “purported” mining operations of the firm. The firm also has not warned investors against any of the risks associated with crypto investments, such as the potential impact of government regulatory action that might impact crypto valuations in future, and other factors.
The charges thus pertain to violation of securities laws by offering illegal, unregistered securities, engagement in fraud, and public deception. The respondents have been ordered to cease and desist from selling securities in Texas and to cease and desist from acting as dealers or agents.
Earlier this month, the Texas State Securities Board issued an emergency C&D to an Australia-based cloud mining company for selling unregistered securities to Texas residents, the latest in its stringof C&Ds against crypto-related firms this year.
U.S. FDA Eyes Blockchain to Enhance Food Safety in the Wake of E. coli Outbreak
Following an outbreak of E. coli in the United States that was linked to romaine lettuce, the Food and Drug Administration (FDA) is considering better track-and-trace methods and this includes the use of blockchain technology.
Speaking to business news channel CNBC, FDA commissioner Dr. Scott Gottlieb announced that the federal agency had hired the vice president of food safety at Walmart, Frank Yiannas, as its foods and veterinary medicine deputy commissioner. Yiannas is expected to introduce new track-and-trace tools to the agency.
“We have a guy starting… the former head of food safety at Walmart who is going to be coming to the FDA to help us put in place among other things better track and trace using tools like blockchain maybe to even do track-and-trace on the food supply chain,”
Pinpointing the Problem
According to Gottlieb, whenever there is a food-related outbreak, technologies such as blockchain will assist in tracing the cause to a specific distributor, farm or grower in the supply chain. This will prevent blanket warnings which affect everyone even when the cause is limited to a particular origin.
Prior to joining the FDA, Yiannas was instrumental in deploying blockchain technology at Walmart with a view of tracking leafy greens as CCN reported in September. This included the food traceability initiative which required producers of fresh, leafy greens to use blockchain technology in tracking and tracing such products. Walmart gave the suppliers one year to ensure that systems were in place for the program to take off.
Walmart Demands Salad Growers to Use Blockchain for Food Safety https://t.co/M5wDn3Oh2C
— CCN (@CryptoCoinsNews) September 26, 2018
While announcing the initiative at the time, Walmart noted that multiple states in the U.S. had suffered E. coli outbreaks linked to romaine lettuce and this had resulted in 96 hospitalizations and five deaths. With blockchain technology, the big box retailer added, product information such as origin would become available throughout the supply chain in real time.
“In the future, using the technology we’re requiring, a customer could potentially scan a bag of salad and know with certainty where it came from,”
Yiannas said at the time.
Outside the United States, French retail giant Carrefour has taken similar steps to Walmart by integrating IBM’s tailored blockchain data system known as Food Trust with a view of improving food safety.
And about four months ago, the Food Standards Agency, the food safety watchdog of the United Kingdom, announced that a blockchain technology trial to track beef from the slaughterhouse to the end consumer had concluded successfully.
$19.3 Million: ICO Projects Withdrew 170,000 ETH During Recent Sell-Off
ICO projects have reportedly withdrawn over 170,000 ETH during the recent market sell-off.
This as the price of Ethereum's ether token dropped to a low of little over $100.
The recent market sell-off that saw bitcoin go under the $4,000 mark for the first time since September of 2017, has seen initial coin offering (ICO) projects withdraw over 170,000 ETH, currently worth about $19.3 million, from their treasuries.
According to a report published by blockchain research firm Diar, over 100,000 ETH ($11.4 million) were transferred from ICO projects’ treasuries in the past week. Only in September and January of this year have these treasuries been accessed so much, the report claims.
The report, first spotted by The Next Web, comes shortly after most cryptocurrencies saw their prices plummet earlier this year. Ethereum’s ether went from around $200 to a low of about $102 before it started to recover. At press time, it’s trading at $114.1 after rising 9.6% in the last 24-hour period.
Notably, when ETH fell from about $350 to $200 earlier this year, Santiment data revealed ICO projects had “spent” over 500,000 ETH at the time. While it’s clear that amount could’ve helped the cryptocurrency’s price plummet, it’s only clear the funds moved from their treasuries.
As The Next Web points out, the cryptocurrency sell-off has also seen trading volumes drop. Top cryptocurrency exchanges, including Binance and OKEx, have been trading significantly lower amounts of crypto than they were in January, when the bearish trend was still fresh.
Diar’s report further notes that out of the tokens that were launched this year and added to cryptocurrency exchanges, 75% have been seeing their volumes in “complete decline” since last month. Nevertheless, the teams behind these projects have, to date, withdrawn only 22% of their total funds.
Before the market started plummeting and projects started selling their funds, the total amount raised was of 4.65 million ETH, at the time worth $1.7 billion. Notably, as CryptoGlobe reported, funds raised by ICO projects have been dropping, and were down 80% in the third quarter of this year.
Despite these stats, BitMEX’s research has last month revealed ICOs sold “almost all” of the ETH they raised before the market hit what appears to be its bottom. This means that these were “sitting on unrealized gains, rather than losses.”
Back Over $4K: Bitcoin’s Price Bounce is Gathering Pace
While the bitcoin (BTC) market is still predominantly bearish, seller exhaustion near $3,500 may be paving the way to stronger corrective bounce.
The largest cryptocurrency by market capitalization printed a 14-month low of $3,474 on Monday, having revived the long-term bear market with a convincing move below the crucial 21-month exponential moving average (EMA) support on Nov. 14.
Therefore, the path of least resistance is to the downside. A possible coming drop to the psychological support of $3,000, however, may happen after a notable bounce. This is because BTC has picked up a strong bid today, validating the bearish exhaustion signaled by a repeated defense of $3,500 in the last three days.
At press time, the cryptocurrency is changing hands at $4,010 on Bitstamp, representing 8 percent gains on a 24-hour basis.
Today’s positive price action also indicates the cryptocurrency is finally paying heed to oversold conditions reported by the 14-day relative strength index (RSI) since Nov. 15.
The long tails attached to the previous three candles, as seen in the chart above, represent bear failure near $3,500.
Further, the 14-day RSI is looking to move back into undersold territory above 30.00, having charted a bullish divergence over the weekend.
Over on the 4-hour chart, BTC has cleared the falling trendline resistance (yellow line), adding credence to the bullish divergence of the RSI confirmed on Nov. 25 and the long-tailed daily candles.
As a result, BTC looks poised for a convincing move above $4,000. The recovery rally, however, may have a tough time scaling the falling channel hurdle, currently at $4,450, as the key exponential moving averages (EMAs) – 50, 100 and 200 – are still trending south in favor of the bears.
BTC looks to have carved out a temporary bottom around $3,500, and prices could rise to $4,400 in the next day or two.
A falling channel breakout above $4,400 may not happen in the near-term, as the EMAs are still biased toward the bears.
The long duration charts still favor a drop to $3,000 (psychological support). The bullish view put forward by the 4-hour chart would be neutralized if prices find acceptance below $3,500.
Nasdaq Partners with VanEck to Release ‘Regulated, Surveilled’ Digital Assets Products
The world’s second largest stock exchange Nasdaq and U.S. investment firm VanEck have announced a partnership to jointly launch a set of “transparent, regulated and surveilled” digital assets products. VanEck’s director of digital asset strategy Gabor Gurbacs tweeted the news Nov. 27.
Gurbacs revealed the partnership at the Consensus:Invest crypto conference in New York City. The announcement echoes yesterday’s report from Bloomberg, citing “two people familiar with the matter,” that Nasdaq would be rolling out a Bitcoin (BTC) futures contract as early as Q1 ‘19.
Gurbacs indicated in his tweet that the new products would harness Nasdaq’s SMARTS Market Surveillance system, alongside VanEck’s MVIS digital asset pricing indices.
SMARTS is a cross-market, cross-asset, multi-venue surveillance tool that correlates real-time and historical data with detection patterns to trace illegal market activities such as spoofing and wash trading.
As of press time, it has not been confirmed whether the BTC futures contract will be cash-backed, or physically settled (i.e. with returns paid out in BTC rather than fiat currency).
As reported, VanEck is currently awaiting a final decision from securities regulators on its joint proposal for a physically-backed Bitcoin exchange-traded fund (ETF) together with blockchainsoftware and financial services firm SolidX.
After a rejection by the U.S. Securities and Exchange Commission (SEC) in March 2017, the proposal was re-submitted for listing on CBOE’s BZX Equities Exchange this June. Its fate is still pending since the SEC postponed its decision this August.
While cash-settled Bitcoin futures contracts came to market as early as December 2017, the first physically-delivered Bitcoin futures are targeted for launch in January 2019 on Bakkt, the digital assets platform created by New York Stock Exchange (NYSE) operator, the Intercontinental Exchange (ICE).
Next Big Crypto Market? Cash is Rapidly Disappearing in Sweden
Half of Sweden’s retailers predict that the country will stop accepting cash by the end of 2025, the New York Times reported. Sveriges Riksbank, the central bank of the country, is already testing a digital currency called the e-krona. Could the declining usage of cash in Sweden lead to a potent market for crypto?
Preparing For a Cashless Society
Commercial banks, businesses, and individuals in Sweden are preparing for the creation of a completely cashless society within the next decade.
Stefan Ingves, the governor of Riksbank, said:
“When you are where we are, it would be wrong to sit back with our arms crossed, doing nothing, and then just take note of the fact that cash has disappeared. You can’t turn back time, but you do have to find a way to deal with change.”
The country and its government are well aware that cash is disappearing from society and the trend is irreversible. The inefficiency of cash has led the majority of the businesses and individuals in the region to switch to digital alternatives.
A few thousand people went as far as to implant microchips in their hands to pay for food and transportation with a gesture.
The declining usage of cash in Sweden represents a positive trend that the government has encouraged for many years. But, local authorities did not expect the general population to move on from cash to more practical alternatives at such a rapid rate.
Mats Dillén, the head of a Swedish Parliament committee, told the New York Times that the disappearance of cash from the society will inevitably cause major implications for the economy and the country has to be ready for what comes next.
“We need to pause and think about whether this is good or bad, and not just sit back and let it happen If cash disappears, that would be a big change, with major implications for society and the economy.”
Countries in Asia including Japan, South Korea, and China are undergoing a similar trend. China, in particular, has seen a surge in the usage of digital payment networks as a growing number of individuals have started to rely on mobile applications like AliPay, which is now valued at over $150 billion, to pay for necessities and receive monthly compensation from companies.
Japan and South Korea are Examples
The two countries became the second and third largest cryptocurrency markets in the world behind the U.S., with large-scale cryptocurrency exchanges like Upbit, Bithumb, and bitFlyer dominating the global digital asset market.
Sweden remains a relatively small market for crypto, possibly because centralized payment networks are more efficient and practical for daily use. Merchant adoption remains as one of the weaknesses of decentralized currencies and centralized alternatives are still easier to utilize to deal with both offline and online merchants.
As cryptocurrency secures mainstream awareness and eventually adoption, Sweden could become a prime market for cryptocurrency users and investors, if supported by the government and favorable regulations.
US Commodities Regulator CFTC Issues Smart Contracts Primer, Outlines Benefits and Risks
The primer is LabCFTC’s second fintech-educational publication, the first being its October 2017 primer on virtual currencies. As outlined by the lab’s director Daniel Gorfine, the new primer engages with blockchain-enabled smart contract technology, which he notes “[Is] being used to drive further automation in our markets and may have an impact across a range of economic activities.”
LabCFTC’s primer opens with a definition of smart contracts as “a set of coded computer functions” that allow “self-executing computer code to take actions at specified times and/or based on reference to the occurrence or non-occurrence of an action or event.”
It sets out to explore a range of their potential applications, from rudimentary looped code for vending machine dispensal to more complex instances such as self-executing insurance and settlement of credit default swaps.
While recognizing the far-reaching potential benefits of using smart contracts — which include enhanced market efficiency, secure identity verification, automated trade execution, and prompt regulatory reporting — the primer outlines several risks and challenges for regulators to tackle.
These are deemed to include the introduction of “operational, technical and cybersecurity” risks, as well as of fraud and manipulation. The CFTC argues that measures must be taken to mitigate their potential use for the unlawful circumvention of rules, and that liability mechanisms and good governance standards are required to properly attribute accountability and tackle dispute resolution in the case of misconduct or functional error.
The primer also outlines the remit of the CFTC’s oversight, highlighting areas where CFTC-regulated entities may have use for smart contracts, particularly in the financial sector. Many discussions of smart contracts, the document suggests, “use derivatives as examples,” as these “may be readily digitized and coded.” A smart contract may automate the fulfilment of a range of existing contracts such as forward, futures, options and swaps, it notes.
The lab also tackles smart contracts’ interaction with legal frameworks, emphasizing that “existing law and regulation apply equally regardless what form a contract takes.” Contracts or their constituent parts, whether or not they are written in code, remain subject to “otherwise applicable law and regulation.”
As reported, an arresting example of technical risk was raised this October by a group of analysts from Northeastern University and the University of Maryland. Their research argued that most Ethereum (ETH)-based smart contracts are “direct- or near-copies of other contracts,” carrying the risk that a copied smart contract contains a vulnerable or a buggy code, which is then duplicated across the ecosystem.
ICE CEO Unequivocally Sure That Crypto Will Succeed, Bitcoin Market Isn’t Worrying
Crypto Will Unequivocally Survive… Market Isn’t Worrying
Surprisingly, amid one of the worst Bitcoin corrections in its decade-long history, a number of commentators and investors, from the traditional, venture, and crypto realms alike, have come out in full support of this asset class and ground-breaking innovation.
The most recent of these notable outspoken supporters is one Jeff Sprecher, CEO of the Intercontinental Exchange (ICE), who took to CoinDesk’s Consensus Invest event on Tuesday to discuss his opinions on the crypto market.
Speaking at the popular New York event, which hosted the crypto industry’s leading innovators, analysts, and executives, Sprecher spoke on if he believes that digital assets will survive, especially considering the market’s most recent drastic downturn.
Responding to the self-imposed question, the ICE chief, known for having a penchant for innovation and acceptance, noted that he would say “the unequivocal answer is yes,” before adding that the tumultuous value of crypto assets hasn’t irked his view on the matter.
Sprecher’s sentiment on Bitcoin and altcoins comes amid an interesting time in the cryptosphere, whereas many former believers have been deterred and put off by BTC’s leg lower and the ever-growing presence of bearish sentiment.
But, as alluded to earlier, like other zealous cryptocurrency fanatics, the ICE executive doesn’t fit into the aforementioned category of ‘fair weather’ players.
And, while Sprecher didn’t discuss his reasoning, Anthony Pompliano, a partner at Morgan Creek Digital, did this arduous job for him, as reported by Ethereum World News on Monday.
Speaking on CNBC’s early morning “Squawk Box,” Anthony, better known as “Pomp” by his peers/fans, noted that while Bitcoin (BTC)’s technical, psychological, and historical indicators signal lower lows, he remains 100% sold on its bright future.
he diehard cryptocurrency advocate exclaimed that Bitcoin is the world’s most secure transaction settlement layer, so BTC will always have value, no matter the state of traditional markets or how blockchain technologies have developed.
Pomp added that cryptocurrencies as a whole, even with 2018’s drastic sell-off, remain that best-performing asset class in 10 year’s time, even usurping the U.S. equities market, which has been on a monumental bull run post-2008’s Great Recession.
Closing off his long-term convictions on Bitcoin, the Morgan Creek in-house crypto savant added that this (crypto’s rise to prominence) was catalyzed solely by retail players, not the high net-worth individuals that speculators have been clamoring for, before adding that institutions are getting poised to enter this market via OTC desks.
Bakkt CEO Doesn’t Care ‘Bout Bitcoin Price Either
During the same Consensus panel, Kelly Loeffler, his bride and ‘partner in crime’, also expressed her thoughts on cryptocurrencies and, more importantly, Bakkt itself.
Loeffler noted that the value of Bitcoin isn’t one of her primary concerns, as it doesn’t affect how Bakkt, her brainchild, operates at its core.
Asked if price is important, Kelly Loeffler, CEO of @Bakkt, says it is immaterial to what the new platform is working on: "The price is being expressed but there’s a lot of missing infrastructure and use cases." #ConsensusInvest
— CoinDesk (@coindesk) November 27, 2018
And while she touched on the delay of Bakkt’s in-house, physically-backed Bitcoin (BTC) futures launch, she added that the talented team at Bakkt hasn’t been deterred, likely far from. She noted:
If you think about commodities or equity indices, the S&P500, that price is established in a federally regulated market, we don’t have that in the crypto market today. That’s what we’re focused on bringing along with a myriad of other features.
Litecoin [LTC] has no reason to exist, says prominent Venture Capitalist
In a discussion at the Consensus Invest 2018, Arianna Simpson, a venture capitalist, and Lucas Nuzzi, a crypto researcher, spoke about the bear market and about Litecoin and how Charlie Lee, its founder, sold all of his Litecoin at the peak.
In response to Litecoin’s end of the year prediction, Lucas Nuzzi, Director of Research at DAR Crypto, said that he doesn’t believe in Charlie Lee’s investment in Lightning Labs and putting out the narrative of Litecoin being an on-ramp to Lightning Network.
Arianna Simpson, a venture capitalist at Autonomous Partner, added to Nuzzi’s point and said that Litecoin doesn’t have a reason to exist. She continued:
“It [Litecoin] has literally no reason to exist; it’s like a multibillion-dollar test. I’m sorry, it’s a very very expensive test net and I think the narrative of its silver to bitcoins gold is bullshit, there’s no need for that.”
Simpsons continued saying that she doesn’t have any investments in Litecoin. Furthermore, she said:
“And Charlie Lee dumped his entire stake at the peak of the market to avoid a conflict of interest like I’m sorry if you look by the way at their at their balance of Treasury, which is public. I mean, they have like a joke, so I’m not particularly bullish on the prospects of it.”
While Litecoin enthusiasts might be aggressively pushing adoption, the price of Litecoin has promptly followed that of Bitcoin and decreased by a total of 92% since its all-time high in January 2018.
There is also a FUD circulating on Twitter saying that Charlie Lee predicted the fall.
In a discussion at the Consensus Invest 2018, Arianna Simpson, a venture capitalist, and Lucas Nuzzi, a crypto researcher, spoke about the bear market and about Litecoin and how Charlie Lee, its founder, sold all of his Litecoin at the peak.
In response to Litecoin’s end of the year prediction, Lucas Nuzzi, Director of Research at DAR Crypto, said that he doesn’t believe in Charlie Lee’s investment in Lightning Labs and putting out the narrative of Litecoin being an on-ramp to Lightning Network.
Arianna Simpson, a venture capitalist at Autonomous Partner, added to Nuzzi’s point and said that Litecoin doesn’t have a reason to exist. She continued:
“It [Litecoin] has literally no reason to exist; it’s like a multibillion-dollar test. I’m sorry, it’s a very very expensive test net and I think the narrative of its silver to bitcoins gold is bullshit, there’s no need for that.”
Simpsons continued saying that she doesn’t have any investments in Litecoin. Furthermore, she said:
“And Charlie Lee dumped his entire stake at the peak of the market to avoid a conflict of interest like I’m sorry if you look by the way at their at their balance of Treasury, which is public. I mean, they have like a joke, so I’m not particularly bullish on the prospects of it.”
While Litecoin enthusiasts might be aggressively pushing adoption, the price of Litecoin has promptly followed that of Bitcoin and decreased by a total of 92% since its all-time high in January 2018.
There is also a FUD circulating on Twitter saying that Charlie Lee predicted the fall.
Charlie Lee clarifies his comment in the subsequent tweet by saying:
“Every pump I’ve seen has been followed by a bear cycle. The market needs time to consolidate. That’s just my experience from 6+ years of watching this space. How low and how long it will be is unclear. But people need to be aware of this possibility.”
At the time of writing, Litecoin was trading at $32, with a market cap of $1.90 billion with its 24-hour change up by 7%.
South Korean blockchain startup Fantom enters into research partnership with University of Sydney
South Korea-based Fantom, a Directed Acyclic Graph-based (DAG) smart contract platform, has announced a research partnership with The University of Sydney (USYD), including a donation to the University’s Faculty of Engineering and Information Technologies.
The partnership follows Fantom’s recent expansion into Australia, which marked the startup’s first destination in its global expansion outside of its home country. Fantom will fund university scholarships and a research group focused on developing a secure and low-energy programming toolchain.
Led by University of Sydney Associate Professor of Computer Science, Bernhard Scholz, the initial funding will support a dedicated blockchain research group in building a new programming toolchain for the community and Fantom through open source research and software artefacts. The aim is to create automatic bug-checking software for safer smart contract development.
“With the incredible research grant and support that we’ve received from Fantom, this project will help the University of Sydney deliver research papers and software artefacts, and provide unique blockchain-related research opportunities in higher education,” Prof. Scholz said.
Underscoring the need to lay heavier emphasis on blockchain-focused research, Dr. Byung Ik Ahn, CEO of Fantom, said that the university’s experienced faculty and talented students are uniquely qualified to improve smart contract functionality and create a new programming language that can help advance the entire ecosystem.
“This partnership will enable safer smart contract programming while also providing the hands-on experience necessary to drive blockchain innovation and development,” said Michael Kong, Chief Innovation Officer at Fantom.
According to the official release, the key focus areas of Fantom’s research partnership include:
Programming methodology for smart contracts, which includes education and tutorials on blockchain's new programming environment.
Programming language for smart contracts which aims to extend current programming language solidity so it becomes safer to use.
Producing a verifying compiler that translates solidity (or an extension of it) to a virtual machine.
A new, energy efficient, virtual machine with a compact bytecode format.
To achieve these aims, the funds will sponsor PhDs, postdocs, and professors, and will address the current lack of blockchain-focused research and initiatives in higher education, providing developers with the hands-on research experience necessary to develop programming language techniques and formal methods.
Earlier in June, Fantom raised $40 million from Hyperchain Capital, Signum Capital, 8Decimal, Arrington XRP Capital, Bibox Fund, Link VC, Nirvana Capital, JRR Crypto, among many others.
Goldman, Morgan Stanley Go Live With CLS’ IBM-Powered Blockchain
CLS, the bank-owned currency trading utility, and IBM have gone live with their blockchain-based payment netting service after more than two years in development.
Investment banking giants Goldman Sachs and Morgan Stanley are the first companies to use the newly launched CLSNet, with six more participants from North America, Europe and Asia, including Bank of China (Hong Kong), committed to joining in the next few months, according to CLS and IBM.
Ram Komarraju, managing director for technology at CLS, told CoinDesk the system is up and running, saying:
“We have matched and confirmed the first transactions and successfully issued a netting report to the counterparties.”
Along with the food-tracking blockchain IBM Food Trust launched in October, and the trade finance platform we.trade, which went live in late June, CLSNet is the third blockchain consortium powered by IBM tech to go into production this year.
As such, it’s one of the few major enterprise distributed ledger technology (DLT) projects of any stripe to get this far.
“With CLSNet now in production with two of the world’s largest banks, for a major market function, it is a testament to the ongoing maturity of blockchain technology and the value that it can deliver in practice,” said Marie Wieck, general manager at IBM Blockchain, in a press release.
The launch of CLSNet, she said, represents “the first post-trade production deployment of blockchain technology in a global market utility.”
Filling in gaps
Though not a household name, CLS provides critical plumbing to the foreign exchange, or forex, markets. Founded in 2002, it mitigates settlement risk for participating banks with a “payment versus payment” service, in which both sides of a trade are completed at the same time.
But its new platform aims to solve current issues in the forex market, such as a lack of standardization and automation.
For example, a limited number of participants currently net trades with each other on a regular basis, and even when they do, often there is a need to manage the process manually, according to IBM and CLS. In addition, many participants do not net the payments for forex trades, instead settling on a gross basis, which exposes them to settlement risk and leads to higher intraday liquidity demands, the companies said.
“CLSNet will deliver the standardization and automation needed for non-CLS settled transactions,” said Adam Josephart, managing director of the fixed-income division at Morgan Stanley.
Barry Lo, general manager for the bank-wide operation department of Bank of China (Hong Kong), added that CLSNet in particular “will enhance operational efficiency in trade matching and payment netting for non-CLS settled currencies such as CNH [the offshore version of China’s renminbi], and strengthen our risk management.”
The now-live CLSNet works for over 120 fiat currencies and is designed to standardize and increase the level of payment netting in the foreign exchange market. It was developed in collaboration with buy-side and sell-side institutions. At the same time, the platform supports compliance with a code of conduct for the foreign exchange markets that CLS helped to develop, the company stated.
“A standardized and automated payment netting process will lead to improved intraday liquidity, reduced cost, improved operational efficiencies and ultimately support business growth,” said Alan Marquard, chief strategy and development officer at CLS.
CLS and IBM developed CLSNet on the Hyperledger Fabric blockchain. But CLS has been experimenting with blockchain technology since early 2015, before the Hyperledger consortium started.
Those attempts eventually grew into CLSNet, with Bank of America, Bank of China, Bank of Tokyo-Mitsubishi UFJ, Citibank, Goldman Sachs, JPMorgan Chase and Morgan Stanley on board when the project was unveiled in September 2017.
From the beginning, CLS worked with IBM on blockchain solutions. However, in May of this year, the forex trading utility announced a $5 million investment in another major enterprise DLT vendor, R3.
Yet R3’s platform will not be used for the current services CLS is working on, Komarraju told CoinDesk.
“Our investment in R3 has no impact on the future development of our products using Hyperledger Fabric, as we do not believe that DLT should be a ‘one-network universe,'” he said, adding:
“We believe that the industry will benefit from a choice in providers, which is why we have chosen to align ourselves with two key providers, R3 and IBM, in the DLT space.”
Meanwhile, CLS and IBM have expanded their collaboration. This summer the two companies announced a proof of concept for a separate project named LedgerConnect, a financial blockchain “app store” offering DLT-based services for know-your-customer processes, sanctions screening, collateral management, derivatives post-trade processing and reconciliation and market data.
Renowned Israeli Crypto Entrepreneur Moshe Hogeg Accused of Misusing ICO Funds
One of Israel’s leading entrepreneurs in the cryptocurrency field, Moshe Hogeg, is facing accusations of embezzling funds raised from two Initial Coin Offerings consequently rendering the company for which the funds were raised for insolvent.
As a result, 17 individuals who claim to be shareholders of IDC Investdotcom Holdings, the company associated with Hogeg and which is more popularly known as Invest.com, have filed a petition seeking to liquidate the firm. A temporary liquidator has subsequently been appointed by a court in Tel Aviv, according to The Times of Israel.
With the 17 individuals all being ex-shareholders of AnyOption, a binary options firm which is now defunct, the petition has highlighted the close ties that exist between Israel’s thriving cryptocurrency sector and the binary options industry which was recently outlawed in the Middle Eastern country.
Registered in Cyprus, Operates from Israel
Though IDC Investdotcom Holdings is registered in Cyprus, the petitioners have alleged that it was largely run from Israel. After tens of millions of dollars were raised during two successful ICOs, the petitioners allege that Hogeg failed to share the proceeds but instead put the money to his own use.
This year Hogeg has been in the news for various multi-million dollar purchases and donations including a parcel of land he bought in Tel Aviv at US$19 million and the Israeli top soccer club Beitar Jerusalem which he acquired at a price of US$7.2 million. Hogeg also recently donated US$1.9 million to Tel Aviv University to put up a blockchain research facility named in his honor.
The blockchain entrepreneur’s ownership of Invest.com is through his venture capital firm Singulariteam. Other firms in the portfolio of Singulariteam include Sirin Labs which is known for the US$1,000 blockchain smartphone known as ‘Finney’.
Per the petition, AnyOption and Invest.com merged last year in June after it emerged that the former could no longer continue in the binary options business as Israel was planning to ban the sector. Terms of the merger agreement were however changed this year in February with shareholders of AnyOption now entitled to receive US$3.5 million from Invest.com and shares of Stox, a cryptocurrency firm that had been launched.
One of the ICOs which the petitioners claim became the victim of embezzlement was conducted last year in August when Stox held a crowd fundraising event where ETH worth US$34 million was raised though the value later rose to US$60 million. Stox also did another ICO in February this year for a project known as Zodiac where US$33 million was reportedly raised according to the petition.
The petitioners now claim that this amount never benefitted Invest.com but was instead embezzled by Hogeg leading to the current insolvency. Invest.com has, however, denied allegations that it is insolvent.
Blockchain Deployment Could Add $3 Trillion in International Trade by 2030
The World Trade Organization (WTO) released a report on blockchain technology’s effect on international trade today, Nov. 27. Per the study, blockchain’s economic value-add on a global scale could reach almost $3 trillion by 2030.
“Blockchain and International Trade: Opportunities, Challenges, and Implications for International Trade Cooperation” analyzes blockchain applications and challenges that must be considered before the technology’s deployment in various sectors. The study considers the technology’s effect on industries such as trade finance, customs clearance, logistics and transportation.
Blockchain Business Value Forecast. Source: WTO
The study estimates that blockchain has the potential to significantly cut trade costs by increasing transparency and facilitating processes automation, including financial intermediation, exchange rate costs, coordination, and other aspects. “The removal of barriers due to blockchain could result in more than $ 1 trillion of new trade in the next decade,” the report reads.
Blockchain is expected to help administer intellectual property rights across multiple jurisdictions by delivering more transparency and efficiency, and enhance government procurement processes, including fighting fraud and managing public contracts.
Blockchain purportedly could improve supply chains, allowing for the tracking of shipments and proving their authenticity. Additionally, the technology could open new opportunities to micro, small and medium-sized companies.
Conversely, the study warns about challenges that must be addressed before deploying blockchain, as well as its impact on international trade. The researchers point out limited scalability of blockchains due to the predetermined size of blocks, in addition to energy consumption and security issues.
Although “blockchains are highly resilient compared to traditional databases due to their decentralized and distributed nature and the use of cryptographic techniques, they are not completely immune from traditional security challenges,” the study states.
The report stresses the importance of developing a multi-stakeholder approach in order to find appropriate use cases in cross-border trade. According to the WTO, blockchain requires frameworks that ensure the interoperability of networks and provide clear legal status for blockchain transactions across jurisdictions. The report concludes:
“Blockchain could make international trade smarter, but smart trade requires smart standardization — and smart standardization can only happen through cooperation. If we succeed in creating an ecosystem conducive to the wider development of blockchain, international trade could well look radically different in ten to 15 years.”
Earlier this week, Ethereum cofounder Vitalik Buterin said that the misapplication of blockchain technology in some industries leads to “wasted time.” Buterin argued that although there are a number of companies that try to establish higher standards by using blockchain technology, he does not think the technology is applicable in every industry.
DHS looks to blockchain to deter counterfeit certificates
The Department of Homeland Security’s Science and Technology Directorate is looking to blockchain to prevent forgeries in the certificates and licenses issued by Customs and Border Protection, Citizen and Immigration Services and the Transportation Security Administration, DHS said in a recent Other Transaction Solicitation. The agencies' current paper-based issuance processes are often "non-interoperable and are subject to loss, destruction, forgery and counterfeiting,” DHS said.
S&T is looking for solutions that address one or more of the following technical topic areas:
1.Issuance and verification certificates, licenses and attestations.
2.Storage and management of certificates, licenses and attestations.
3.Decentralized and derived personal identity verification credentials.
The agency wants counter-fraud solutions that address interoperability challenges and enterprise lifecycle management and feature a high degree of usability. They must also be standards based.
“This potential for the development of “walled gardens” or closed technology platforms that do not support common standards for security, privacy, and data exchange would limit the growth and availability of a competitive marketplace of diverse, interoperable solutions,” according to the solicitation.
DHS issued the Other Transaction Solicitation through its Silicon Valley Innovation program, which uses a streamlined application and pitch process for startup companies with viable technologies.
S&T will be holding an industry day on Dec. 11 in Menlo Park, Calif. Applications will be accepted on a rolling basis with the final deadline of May 23, 2019.
NYSE Chair Says Survival of Digital Currencies Is ‘Unequivocal’
Speaking at the Consensus Invest conference, Sprecher — who is also the CEO of Intercontinental Exchange (ICE) — said that when he saw headlines asking “Will digital assets survive?,” he would say that “the unequivocal answer is yes.” “We’re kind of agnostic to price,” Sprecher added.
On stage at the Consensus Invest event in New York, Sprecher was accompanied by his wife and the CEO of cryptocurrency platform Bakkt, Kelly Loeffler. Bakkt is owned by ICE and anticipates its launch early next year.
Commenting on the Bitcoin (BTC) futures contract offering, Loeffler said that “the Bakkt futures contract will help Bitcoin traders establish a trusted price. Bitcoin now trades at different prices on different exchanges, many of which are unregulated.”
The NYSE and its parent firm ICE demonstrated a proactive approach to the cryptocurrency space. In January, ICE partnered with blockchain tech company Blockstream to bring “disciplined” BTC price information to major Wall Street investors. ICE then planned to pull data from 15 major exchanges and deliver it to big financial names, including hedge funds and professional trading firms.
Later in May, ICE announced plans to offer traders contracts that eventually result in customers owning BTC. ICE reportedly “has had conversations with other financial institutions about setting up a new operation through which banks can buy a contract, known as a swap, that will end with the customer owning Bitcoin the next day — with the backing and security of the exchange.”
Just earlier today, Cointelegraph reported on the establishment of an Association for Digital Asset Markets (ADAM) to create a “code of conduct” for the cryptocurrency sector. Among ADAM’s founding members are former CEO of the NYSE Duncan Niederauer along with Mike Novogratz’s crypto merchant bank Galaxy Digital, global financial services firm BTIG, fintech firm Paxos and crypto liquidity solutions provider GSR.
SEC Chair Clayton: Crypto ETF Needs Exchanges ‘Free From Manipulation’
Jay Clayton, chairman of the U.S. Securities and Exchange Commission (SEC), said Tuesday that he doesn’t see a pathway to a cryptocurrency ETF approval until concerns over market manipulation are addressed.
“How that [manipulation] issue gets addressed, I don’t have a particular path. But it needs to be addressed” before an ETF gets approved, Clayton remarked during CoinDesk’s Consensus: Invest conference.
“The prices retail investors are seeing are the prices they should rely on, and free from manipulation – not free from volatility, but free from manipulation,” Clayton said during his appearance, which was moderated by investor Glenn Hutchins. Clayton also remarked that custody concerns also remain an issue ahead of any kind of ETF approval.
The SEC chairman – who clarified at the outset that he was speaking in a personal capacity, and not on the part of his agency – also honed in on the question of whether the sale of tokens during initial coin offerings (ICOs) constitute securities offerings.
“If you finance a venture with a token offering, you should start with the assumption that it is a security,” he remarked.
Still, Clayton conceded that in some instances, the status of a particular token isn’t as clear-cut. When the topic of distributed ledger startup Ripple and the digital asset XRP was raised, Clayton said that “some of these questions require a lot of information” without going further into that specific topic.
On the other hand, “many are very obvious,” according to Clayton. “I’m selling you my token, I’m going to go off and produce a venture and, hopefully, you’ll get a return for having purchased that token.”
Clayton also offered a bit of advice for those looking to pitch tokens to potential investors: “If there’s a gap between what you’re telling [the SEC] and what you’re telling people investing in your venture, that’s not a good place to start.”
The SEC chairman was also asked about the recent announcement that two different crypto startups, both of which conducted ICOs, settled registration violation charges with the agency. While noting that those firms are working with the SEC, Clayton clarified that the settlements were made in the context of those specific companies.
“People should understand that this was the remedy in this particular case but remedies in future cases may be different,” said Clayton, adding: “Get your act together.”
Clayton’s remarks fit into the wider picture of the SEC’s actions in the crypto space to date, beginning with its July 2017 release of the so-called DAO report, which outlined how some token sales, in the agency’s view, could be considered securities offerings.
While some startups sought to bypass securities laws entirely by dubbing their offerings utility tokens, Clayton has noted that the token sale’s behavior is how it may be classified. He used the concept of a laundry token, noting that a token used to wash clothes would not be a security.
“But if I have a set of 10 laundry tokens and the laundromats are to be developed and those are offered to me as something I can use for the future and I’m buying them because I can sell them to next year’s incoming class, that’s a security,” he said in April.
‘Blockchain Revolution’ Is Bigger Than Anything We’ve Seen in History: Overstock CEO
Overstock founder and CEO Patrick Byrne is exiting the retail business so he can focus on blockchain because he believes it’s a disruptive technology that will transform the world.
“The blockchain revolution has a greater potential than anything we’ve seen in history,” Byrne told Fox Business on Nov. 26 (video below). “It’s bigger than the Internet revolution, how it’s going to restructure society.”
Fox Business host Stuart Varney — an alum of the London School of Economics — asked Byrne how he can be so optimistic when cryptocurrency prices have plunged recently.
Byrne: I Don’t Care About Daily Price Changes
Byrne said focusing on the minutiae of bitcoin’s daily price movements is losing sight of the forest for the trees. “What coins are doing on any given day is silly,” he quipped.
Byrne announced in 2014 that he wanted to pivot from retail to blockchain, and has been making huge progress on this front. “We now have very interesting positions in 19 blockchain companies,” he said.
One of those ventures involves a $6 million investment in an open-source, blockchain-based crypto social network called Minds.
As CCN reported, Minds is a blockchain-based alternative to Facebook, Twitter, and the Google-owned YouTube that promises strict user privacy and absolutely no censorship.
Patrick Byrne said 2019 will be a groundbreaking year for the industry.
“Next year is when you will see blockchain really start coming out with products into the world,” he said. “You’ll see blockchain products in Q1.”
When asked what we can expect to see in 2019, Byrne replied: “You’ll be able to trade security tokens. There’s a whole new class of securities coming into existence called security tokens.”
‘Every Stock Will Be Tokenized’
Byrne recalled that Robert Greifeld — the chairman of Nasdaq — predicted in November 2017 that every stock and bond on Wall Street today “could be” tokenized. “In five years, every one will be tokenized,” Byrne promised.
He added: “The architecture of Wall Street as we know it is going to be deprecated over five years and replaced with security tokens. If that’s true, we built…the New York Stock Exchange of that world. We spent the last four years and $100 million building it.”
When asked why a security token is superior to a stock, Byrne said it’s because of three things:
90 percent lower friction costs.
Complete transparency for regulators.
Immunity from market manipulation. “All kinds of mischief that goes on in the current version of Wall Street cannot go on in a blockchain version of Wall Street,” he said.
Byrne conceded that a major drawback of bitcoin mining is its high cost, but said his companies are involved in a project called raven coin, “which has a much different energy profile.”
Tim Draper: ‘Bitcoin Is Bigger Than the Internet’
In his exuberance for crypto technology, Patrick Byrne mirrored the unbridled enthusiasm of billionaire Tim Draper, who recently doubled down on his $250,000 bitcoin price target for 2022.
In April 2018, Draper said bitcoin is “bigger than the Internet.” The venture capitalist — who was an early investor in Tesla, Hotmail, and Skype — said bitcoin will be “bigger than all of those combined,” as CCN reported.
“This is bigger than the Internet,” Draper gushed. “It’s bigger than the Iron Age, the Renaissance. It’s bigger than the Industrial Revolution. This affects the entire world and it’s going to be affected in a faster and more prevalent way than you ever imagined.”
Draper is unfazed by the recent market crash, and remains confident that the global economy will soon transition to crypto, as CCN reported.
“It’s going to be better for people,” he said. “They’re going to move to crypto, and they’re going to go away from the political currency (fiat). That’s the way it’s going to move.”
So how confident is Draper in the future of crypto? So confident that he’s still hodling the entire stash of 40,000 bitcoin he acquired in 2014 at $600 a piece. “This is a new society, and you want to get out in front of it,” he said.
Billionaire Tim Draper Unfazed By Bitcoin Crash, Boldly Vows Crypto Will Surpass Fiat Money https://t.co/WAYdcuihKK
— CCN (@CryptoCoinsNews) November 27, 2018
Liechtenstein Cryptoassets Exchange Granted Business License by Regulator
Professional traders-focused Liechtenstein Cryptoassets Exchange (LCX) has recently acquired a “business license” in Liechtenstein, according to a press release shared with Cointelegraph Nov. 27.
The new license granted by the Liechtenstein Ministry of Economic Affairs is reportedly a milestone for LCX in developing a “fully regulated blockchain ecosystem,” targeting institutional and professional investors.
Following the recent licensing, the LCX is also planning to apply for a Financial Market Authority (FMA) license, as well as other regulators’ approvals to trade security tokens among other offerings, the firm revealed in the press release. In order to receive more licenses, the LCX has reportedly increased its nominal capital from 100,000 CHF ($100,100) to 1 million CHF ($1.1 million).
Claiming to comply with “all regulatory requirements” for Anti-money laundering (AML) and Know Your Customer (KYC), the LCX now officially provides institutional crypto players with a number of services, including a trading desk, storage vault, and a global fiat-to-crypto exchange dubbed Binance LCX.
Binance LCX represents a joint venture between the LCX and the currently world’s largest crypto exchange Binance. Launched in August 2018, the exchange offers trading in major cryptocurrencies pairs against CHF and euros (EUR).
Also in August, a Liechtenstein-based bank, Union Bank AG, revealed that it had issued its own internal cryptocurrency backed by fiat.
BitTorrent Customers Can Now Pay for Pro and Ads Free Products Using TRX, BNB and BTC
Today, BitTorrent Inc. announced that users of its BitTorrent and uTorrent platforms can now pay for the popular Pro and Ads Free products using Tron (TRX), Binance Coin (BNB) and Bitcoin (BTC). The payment process is made possible by integrating CoinPayments.net. The latter is a leading integrated payment gateway provider for cryptocurrencies. This move by BitTorrent is perfect for the decentralized peer-to-peer file sharing platform in that cryptocurrencies also operate in a decentralized manner.
TRON’s founder and BitTorrent’s CEO, Justin Sun, had this to say about the new development at BitTorrent.
BitTorrent joins a growing list of online companies whose products and services accept TRX as payment.
With BitTorrent’s over 100 million users, the move helps increase the use of TRX in online marketplaces while giving consumers more options to unlock value from BitTorrent’s premium products.
After the Tron Foundation acquired the BitTorrent firm and file sharing platform, the crypto community was anxious to find out how TRON would utilize the platform to further decentralize the web. With over 100 million active users on BitTorrent, Project Atlas aims at using a set of BitTorrent protocol extensions, a custom token, and an in-client token economy to address existing limitations, the company aims to open a new borderless economy, where users can exchange value for computer resources on a global scale.
Over 2,000 Tron Nodes Around the Globe
The Tron network has made tremendous strides in a considerably short time span. Just the other day, the platform was celebrating its Independence from the Ethereum network and now there are exactly 2,019 nodes running the Tron Network.
This milestone was not missed by the Tron community as can be seen in the following tweet by @MishaLederman
#TRON has reached a major milestone by surpassing 2,000 Online Nodes Nov 26
— Misha Lederman (@mishalederman) November 26, 2018
2weeks ago, 27 Nov, Tuesday
Galaxy Digital, Cumberland and More Plan New Crypto Code of Conduct
A group of 10 companies focused on cryptocurrencies and financial services have formed a new group aimed at standardizing a code of conduct for the still-nascent digital asset space.
Announced Tuesday, the Association for Digital Market Assets, or ADAM, is backed by founding members Galaxy Digital, Genesis Global Trading, GSR, Hudson River Trading, Paxos, Symbiont, BitOoda Technologies, BTIG, Cumberland and XBTO.
Together, the companies are pitching conduct voluntary rules to cover the areas of efficient trading, custody, clearing and digital asset settlement, with future guidelines planned to “encourage professionalism and ethical conduct.”
To that end, ADAM plans to work with regulators with the ultimate goal of both aiding existing laws and regulations, as well as earning the trust of both financial watchdogs and policymakers.
And while the group may appear to be setting out to be a self-regulatory organization (SRO), spokesperson Seth London said it isn’t aiming for that designation just yet.
“ADAM must earn the trust of market participants and regulators before it can discuss the SRO designation with regulators and governments that have power to appoint SROs,” he told CoinDesk in an email. He added, though:
“The historical parallels to creation of many SROs mirrors the path that ADAM aims to follow.”
“Currently ADAM includes a wide variety of market participants, including trading platforms, custodians, investors, asset managers, traders, liquidity providers and brokers,” he continued. “Its members are all firms that are active in digital asset markets or seek to participate in those markets once rules are standardized.”
In the coming weeks, ADAM intends to announce its officers and add new members. The group is also in the process of setting up organizational governance.
“In Q1 2019, ADAM intends to convene its members, advisors and regulatory experts to begin drafting the code of conduct. That will take several months. Once the code is adopted, ADAM will exist to evolve it as necessary and monitor compliance,” London added.
In a statement, ADAM advisory board member and former New York Stock Exchange CEO Duncan Niederauer said “rules are fundamental to the development of any market.”
In particular, organizations that can both clarify how existing rules apply to the ecosystem and help increase trust in it are necessary for the crypto markets, he said.
The announcement comes after a group of crypto exchanges teamed up with Gemini founders Cameron and Tyler Winklevoss to launch a new industry-focused self-regulatory organization (SRO) in August. That group, proposed back in March, notably received backing from CFTC Commissioner Brian Quintenz.
Singapore: Bill Tabled to Place Crypto Payment Services Under Central Bank Oversight
A new bill which will impact electronic wallets and digital payment tokens such as bitcoin has been tabled in Singapore’s parliament.
The Payment Services Bill will place the providers of payment services that are not under the regulatory oversight of Money-Changing and Remittance Businesses Act and the Payment Systems Oversight Act under the umbrella of Singapore’s central bank, the Monetary Authority of Singapore (MAS).
This has come about following the growing usage of cryptocurrencies and the realization that the existing legislation does not cover them adequately.
Scope of Payment Services
Besides regulating cryptocurrencies, other activities that are set to be covered by the Payment Services Bill include both domestic and international money transfers and foreign exchange transactions.
“The payment services regulated under the Bill are: a) account issuance service; b) domestic money transfer service; c) cross border money transfer service; d) merchant acquisition services; e) e-money issuance service; f) digital payment token service; g) money-changing service,” said a statement from the MAS.
To offer the listed payment services, providers will be required to acquire licenses which will correspond to the risks that the payment services offered pose. Payment services will be classified as major payment institutions, standard payment institutions or money-changing institutions. The difference between a major payment institution and a standard payment institution is transaction volumes with the latter limited to transaction amounts not exceeding $3 million per month and electronic money float not exceeding $5 million.
Business Presence in Singapore
Among other conditions, applicants of the above licenses will be required to be companies (either incorporated overseas or in Singapore) that have a permanent place of business in the Southeast Asian country or at least a registered office.
With regards to the grace period offered to ensure compliance, the MAS will be stricter with payment services dealing in cryptocurrencies. While other payment service providers will have up to 12 months to comply once the bill is signed into law, providers of digital payment tokens will only have six months to ensure compliance.
As previously reported by CCN, the second consultation on the Payment Services Bill was launched last year in November by the MAS.
Singapore’s Central Bank Includes Bitcoin in Singular Regulation of Payments Services https://t.co/NkDk4kpGmr
— CCN (@CryptoCoinsNews) November 22, 2017
Then, the MAS hoped that the bill would cover more payment service providers while offering regulatory clarity to the sector:
“The new framework will expand the scope of regulation to include domestic money transfers, merchant acquisition and the purchase and sale of virtual currencies. Only payment activities that face customers or merchants, process funds or acquire transactions, and pose relevant regulatory concerns will need to be licensed.”
US SEC Chairman Clayton Keeps Quiet on ICO, ETF Regulation Updates
Speaking in an interview with CNBC, during which presenters mentioned the recent enforcement deals with ICOs Paragon and Airfox, Clayton underlined the need to conduct public token sales with U.S. consumers in line with SEC guidelines.
“We’ve had no ICOs register [with the SEC],” he told reporters, adding:
“To the extent that an ICO is being conducted offshore or pursuant to a private placement exemption, fine; to the extent that you’ve conducted a public offering in an ICO, it’s non-compliant.”
Both the SEC and fellow regulator the Commodity Futures Trading Commission (CFTC) have adopted the perspective that while Bitcoin (BTC) is not considered a security, various ICO tokens are, subject to individual scrutiny.
“I think we’ve been clear that Bitcoin isn’t a security, but many of the ICOs that you see and talk about – they are securities,” Clayton added.
Continuing, the conversation touched on other pertinent issues affecting the cryptocurrency industry this year such as the pending decision on whether to allow Bitcoin exchange-traded funds (ETFs) to launch.
On all topics, Clayton remained tight lipped, repeating aspects of the SEC’s stance already known to the wider community.
“I’m not going to comment on timing or anything like that, but we’ve been clear on some of the issues that are of concern to us,” he said.
Paragon and Airfox, which in 2017 raised around $27 million from their ICOs, must now repay millions of dollars to investors in addition to fines after regulators found them guilty of selling unregistered securities.
Crypto CEO: Bitcoin Will Remain at $3k-$5k For At Least Half a Year
Prominent crypto executive Vinny Lingham has gone on the record with his addition to the ever growing list of Bitcoin price predictions. As we approach the end of 2018, which has seen the biggest bear market for Bitcoin for four years, those predictions are not looking brighter.
Civic CEO Lingham took to the spotlight on CNBC’s Fast Money to declare that winter is coming and we need to hunker down for a long stretch;
— CNBC's Fast Money (@CNBCFastMoney) November 26, 2018
His prediction was that Bitcoin will remain range bound for a while between $3k and $5k adding that it is likely to remain there for at least six months. This would put the end of winter at the middle of 2019 which is in line with price predictions from other analysts.
Lingham added that there is a lot of buying pressure around the $3,000 level which is what could keep it sustained there for a while. If a breakout does not occur after six months he said things could get a lot worse for cryptocurrencies.
Part of the argument for this range is that speculators using exchanges to buy and sell crypto have caused the massive pump and dump whilst holders and institutional heavyweights are likely to use OTC trading for which there are no accurate figures. Those that believe in the tech will be accumulating during this period.
Bitcoin is now being referred to as a digital store of value rather than a decentralized currency that it was originally envisioned to become. Looking back at previous bear markets may also incentivize investors to load up while things are cheap.
Back in 2014 there was a similar ‘crypto winter’ that lasted over 18 months and did not begin to turn around until October the following year. During this digital drought Bitcoin lost 84% from its ATH of over $1,100 in December 2013 to a low of around $180 in January 2015.
The ecosystem is very different this time around with multinational companies mining Bitcoin and crypto instead of kids in their garages. It has reached the mainstream media and is now a household name as opposed to something that computer geeks mess with.
More importantly institutional investment powerhouses such as Goldman Sachs, Fidelity and ICE are eyeing the space which lends more weight to its longevity and eventual turnaround in market trend. The general consensus at the moment though is bleak for the short term, and if the analysts are to be believed there is at least another half year to go before things start to improve.
Ripple Adds Another Banking Partner to Its Growing List, Malaysian Banking Group CIMB
Ripple is in the headlines yet again with another big banking partnership.
Malaysian Banking Group CIMB, ASEAN’s (Association of Southeast Asian Nations) 5th largest bank with over 1,000 branches across Southeast Asia, has partnered up with the fintech giant Ripple.
This strategic partnership will enable CIMB to facilitate instant cross-border payments with the use of Ripple’s xCurrent technology. xCurrent will complement CIMB’s existing proprietary remittance system, SpeedSend, by expanding its payments network to countries around the world who use blockchain payment solutions.
As put by Ripple’s CEO, Brad Garlinghouse:
we’re seeing banks and financial institutions from across the world lean into blockchain solutions because it enables a more transparent, quicker and lower cost payments experience.
Additionally, this partnership leads to CIMB joining RippleNet (Ripple’s Global Payments Network). Through RippleNet, CIMB will gain a connection with other Ripple customers and more than 100 financial institutions around the world. This could help catalyze the growth of CIMB’s global payments business more quickly.
The CEO at CIMB Group, Tengku Dato’ Sri Zafrul Aziz, had this to say about their partnership with Ripple:
we are delighted to be part of ripplenet and look forward to a fruitful partnership with ripple by leveraging each other’s strengths and capabilities. this innovative blockchain solution will revolutionise international cross-border remittances, and is a testament to cimb’s ongoing efforts to enhance its digital banking proposition by providing speedy and cost-efficient solutions to our customers across asean.
Ripple’s Increased Adoption
A year ago, news of Ripple partnering with a leading bank such as CIMB Group would have been considered massive. Today, however, it almost seems to be the norm.
Ripple continues to make headway in achieving their goal:
enabling the world to move value like it moves information today
However, it’s important to note that athough Ripple has made all these partnerships, many of them are only “testing” Ripple’s technology and are not utilizing the XRP token.
Only time will tell if these strategic partnerships really do have a revolutionary impact on Ripple and XRP’s future.
Prepaid Cardano (ADA) Card Released in South Korea for a Limited Time
The cards are made possible through a partnership with Metaps Plus, one of the leading South Korean mobile payment platforms. According to a rough translation of the announcement page, the cards come in two nominal pre-loaded amounts of 100 and 1,000 ADA.
#Metaps #MetapsPlus CryptoCard for #Cardano #ADA.
From November 27th to December 4th we can purchase for a total of 7 days, delivery will be delivered on December 10th.https://t.co/Btocb9GN4Tpic.twitter.com/WeoMb2yzDI
— 라윰 (Ly) (@layume20) November 26, 2018
Last May, Cardano partnered with Metaps Plus to integrate ADA into the mobile payments platform, bringing the digital asset to more than 40,000 stores that currently accept payments form the Metaps Plus network.
ADA is trading down 7.6% over the last 24 hours to $0.0354, giving the project a $918.25 million market cap and making it the 8th largest coin in the AltDex 100 Index (ALT100), a benchmark index for large-cap cryptocurrencies.
Will Fidelity’s Digital Asset Services Platform Impact the Cryptocurrency Industry?
The potential of blockchain and the rising interest in fintech is beginning to capture the attention of Wall Street companies. Just recently, Fidelity Investments, a world leader and provider of a range of financial services launched a subsidiary company dubbed Fidelity Digital Asset Services to specifically handle cryptocurrency clients.
Fidelity Investment is highly experienced in financial service provision to institutional investors and boasts of client assets worth $7.2 trillion under its management. As such, this financial company identified a gap in service cryptocurrency service provision to its niche clients and decided to address the gap.
Fidelity Investment’s move to create a cryptocurrency specific platform has been received positively by industry players. According to ONe Network‘s CEO and founder, John Hoelzer, this step brings some level of legitimacy to the industry and is likely to bring the discussion on cryptocurrency regulation to the forefront.
He says, “Fidelity’s move, is one that I think, brings validation to the market and will be a trailblazer for other institutional money to come into the sector. It will also allow for better regulation and to protect all the investors, while bringing in capital that otherwise remains out of reach for crypto at this time. This will in turn allow for the creation of better products and more innovation on an even faster pace than has been seen over the last 2-5 years.”
Through its subsidiary company, Fidelity Investment aims to serve family offices, hedge funds and other institutional investors who are interested in investing in virtual assets. The company will also provide security and storage solutions for digital assets using appropriate infrastructure and specialists.
For a long time, custodial services have not been available in the cryptocurrency space. Their absence has been one of the major challenges that has made institutional investors reluctant when it comes to engaging in cryptocurrency activities. Since these needs are unique for cryptocurrencies compared to traditional assets, the step taken by Fidelity to provide custodial services alongside technological support has been received positively by investors.
Jori Falkstedt, CEO of Verifer is quick to note that Fidelity’s move will have absolutely positive effects. “The more traditional Wall Street companies become involved in the crypto market, the more trustworthy and legitimate crypto companies will also be in the eyes of ordinary people. Also, more institutional money is certainly expected, which makes the market more stable,” he notes.
But beyond the positive effect, Fidelity Investment has many other factors working for it. First, this financial company has great experience in handling sensitive information and cyber insecurity. This includes cryptography, offline services and controls – all this gives it an edge over other financial service providers. The firm also has a chance to utilize its existing systems to enable customers to carry out trades and assets. Its aim is to do business investors who observe anti-money laundering regulations.
Despite the drop in cryptocurrency prices and the incidences of fraud and hacking, virtual currencies are growing. More institutions are gaining confidence in the industry. Fidelity Investors considers cryptocurrencies to be a foundational technology, and like the internet, it will have its ups and downs, but will eventually stabilize.
Edward Snowden Says Cryptocurrency (But Not Bitcoin) is Here to Stay
The ex-CIA employee Edward Snowden is most well-known for his whistleblower actions. He is, however, known to comment on various topics from time to time, and has now commented Bitcoin.
More specifically, Snowden said that the premier cryptocurrency might face some difficulties in the future. Nevertheless, he also said that although Bitcoin might become less relevant, cryptocurrencies will become more important.
This news comes from an interview with the ACLU’s Director of Speech, Privacy and Technology, Ben Wizner.
Snowden: fundamentals of cryptocurrencies will exist for a long time
Snowden mentioned that he believes the underlying fundamentals of cryptocurrency technology will continue to exist for a long time. Moreover, the promise of decentralization is something Snowden argues could be an important democratic tool.
“Imagine that instead of today’s world, where publicly important data is often held exclusively at GenericCorp LLC, which can and does play God with it at the public’s expense, it’s in a thousand places with a hundred jurisdictions,” Snowden stated, adding that decentralization means that “there is no takedown mechanism”, making the system less prone to central weaknesses.
In reference to Bitcoin, however, Snowden was asked whether he believes the premier cryptocurrency has any intrinsic, long-lasting value. Snowden answered by drawing parallels to paper fiat money.
Furthermore, he propositioned that traditional currencies actually have many similarities to cryptocurrencies.
The only difference between fiat and Monopoly money is state-backing
Essentially, Snowden said the only significant difference between fiat currencies and “Monopoly money” is state-backing. He went on to suggest that this means “men with guns” are those ultimately keeping fiat currencies afloat.
Bitcoin and other types of cryptocurrencies, on the other hand, have two important differing characteristics. The first of these is the notion of scarcity, which ensures the supply of Bitcoin cannot exceed 21 million.
This brings a “built-in” measure of value to the cryptocurrency, which cannot be tampered with. In extension, Snowden’s comments pointed to how scarcity means the amount of cryptocurrencies is, therefore, independent from ulterior motives.
Moreover, Snowden also talked about the importance of belief in the underlying technology.
“That belief is how cryptocurrencies move enormous amounts of money across the world electronically, without the involvement of banks, every single day […] as long as there are people out there who want to be able to move money without banks, cryptocurrencies are likely to be valued,” Snowden said.
Snowden’s comments, therefore, seem to echo the oft-expressed sentiment that the underlying notion of cryptocurrencies will be vastly harder – if not impossible – to ignore long-term.
Trader: Bitcoin (BTC) To Fall To $2,500 By January 2019
Bitcoin Is A “Wild West” Show
Stephen Innes, an Asia-Pacific market-focused trader at New York-based Oanda, recently sat down with Bloomberg to discuss his opinions on the crypto market at large, along with the price action of Bitcoin (BTC) in recent weeks.
The Bloomberg anchor, struggling to keep his laughter contained, commenced the segment by drawing attention to Innes’ recent forecast that BTC was set to trade in a $3,500 to $6,000 range before falling to $2,500 by January 2019, a peculiar collective of price levels to say the least. Explaining his prediction, Innes told viewers of the segment:
You know it’s a bit of a wild west show out here in crypto lands, that’s for sure, so we have to be a bit guarded. Looking at some of these metrics, basically [there’s] unquantified risk. [And] what I’m really looking at is the way coins have been trading in the past few months, and it’s indicative that the [Bitcoin] bottom isn’t in.
Calling the current state of crypto markets a “falling knife,” the bearish trader and crypto skeptic added that as it stands, the bottom isn’t in and as such, “mature investors” are hesitant to issue buy orders for bitcoin or other cryptocurrencies.
Still, Innes noted that he’s not bearish on blockchain technologies, but rather, he’s critical on how coins are trading, presumably in terms of technicals, fundamentals, and how they move from a holistic perspective.
Querying the Oanda in-house crypto critic, a Bloomberg host went on to ask Innes about purposed bearish catalysts, like the tumultuous traditional equities markets and the Bitcoin Cash hard fork, and if they are truly affecting the market.
Turning the question on its head, Innes surprisingly pointed out that while the two aforementioned factors were a catalyst, the primary bearish indicator, in his mind, is the lack of interest in crypto from Wall Street players, despite interest from the Intercontinental Exchange, TD Ameritrade, and Goldman Sachs to foray into this asset class.
He then touched on crypto’s regulatory scene, adding that cryptocurrencies, especially ICO-funded tokens, are starting to get squeezed by regulators, as seen by the SEC’s recent crackdown on AirFox, Paragon Coin, and EtherDelta’s founder.
The Oanda representative echoed this critical sentiment later on Monday, telling MarketWatch that BTC’s recent price action “isn’t normal nor positive,” adding that investors in this nascent market should beware of market soothsayers, who he dubbed “false prophets.” Innes also noted that due to Bitcoin’s “lack of intrinsic store of value [properties],” a controversial statement in and of itself, the world’s first digital asset is well-overvalued.
Interestingly, Innes’ call for a short-term bottom at $2,500 is below and beyond what other analysts have speculated. Morgan Creek Digital Assets partner Anthony Pompliano, for one, recently noted that per a set of psychological, technical, and historical (fundamental) factors, BTC could reasonably bottom somewhere in the low 3s, approximately 25% below price levels at the time of writing.
The bottom is that it has become increasingly apparent that crypto traders have yet to come to a consensus on where Bitcoin is headed next.
Ethereum’s Buterin: Misapplication of Blockchain Tech Leads to ‘Wasted Time’
Speaking at the Devcon4 blockchain conference, the Ethereum cofounder said that although there are a number of companies that try to establish higher standards by using blockchain technology, he does not think the technology is applicable in every industry:
“Sometimes it is for marketing hype. Sometimes it is just people who are genuinely excited about blockchains and want the thing they are personally excited about and their job to align more with each other, which is a totally legitimate, human thing to want to do.”
Buterin identified cryptocurrencies and cross-border payments as industries for which blockchain tech is most suitable. “All of the other ideas — whether we’re talking about products or the self-sovereign identity stuff — that’s clearly something that still needs much more time to be worked out before we can see [whether it] makes sense at scale,” Buterin added.
“They [blockchains] definitely don’t provide 100 percent guarantees of things, especially in the real world,” he stated. Buterin also criticized the proprietary nature of corporate blockchain projects from tech giants like IBM:
“I don’t understand this deeply, but the detail that jumped out at me is they’re saying ‘Hey, we own all the IP and this is basically our platform and you’re getting on it.’ And like, that’s… totally not the point….”
Buterin further referred to IBM’s blockchain for food tracking, that is designed to provide confirmation about products’ origin, stating that while the project has potential value he is unsure of the company’s ability to execute it.
As for non-financial applications, Buterin said he likes the idea of authentication of university degrees which is being implemented in Singapore. The technology purportedly allows institutions to digitally issue education certificates on a blockchain.
Earlier in November, the Ministry of Education of Malaysia announced the establishment of a University Consortium to fight degree fraud using blockchain technology. The system is designed to issue and verify the authenticity of university-issued degrees, while the consortium itself aims to “spread skills training,” as well as to develop and adopt the technology by students and academics.
Employees Say Startup Civil Hyped Crypto Returns, But Failed to Pay
Civil was supposed to create a more transparent and democratic model for journalism. But so far, journalists working on its platform have yet to receive all of the compensation they say they were promised when hired.
According to several current and former employees of news organizations sponsored by the blockchain startup, Civil told journalists in its 18 newsrooms around the U.S. that the CVL cryptocurrency – which, when issued, was supposed to comprise part of their pay – would probably end up being worth several times more than the estimated valuations mentioned in meetings and reported in tax forms.
Yet lackluster demand caused Civil to cancel a public sale of the tokens last month. Now, the reporters have no idea if or when they’ll be paid the tokens that were supposed to be part of their compensation.
Meanwhile, the platform, conceived as a collaborative network where readers would pay for quality journalism and journalists would earn money for content, remains unfinished. The newsrooms, which employ dozens of journalists, are operating normally, but without the tokens originally meant to provide a compelling value-add for users.
“Civil can talk all it wants about creating a new future for media, but the reality is it’s being built by putting journalists into debt,” said Jay Cassano, who left the Civil news outlet Sludge on Nov. 8 because, he said, undelivered tokens made up roughly 70 percent of his salary for five months.
“I had to borrow money to pay my rent and student loans,” Cassano told CoinDesk.
Civil CEO Matt Iles disputes the current and former employees’ claims.
“We didn’t promise anyone tokens would be worth any specific amount,” he told CoinDesk. “Anytime we discussed potential token value with newsrooms, we made it clear we were making estimates and that there was risk involved.”
Iles counters that Civil took steps to discourage the kind of frenzied buying that could have driven up the price of CVL, had the tokens been issued publicly. He told CoinDesk:
“Civil’s consumer token framework restricts liquidity and volatility as a means to ward off speculators and ensure that people buying CVL do so because they want to participate in the network.”
Indeed, Civil used a rigorous know-your-customer process and partnership with the exchange startup AirSwap, which created a means to restrict access to CVL purchases.
But according to Cassano and other insiders, employees were told a different story about the expected price of CVL.
Specifically, according to Cassano, Civil told reporters working with its sponsored news operations that the CVL token they would be partially paid in could be worth around $0.75.
However, on tax documents, the tokens were valued at a fraction of a penny. Iles would not comment on that difference.
“They kept hyping it up internally to keep us in line, saying they were even going to exceed that valuation,” Cassano said. “Iles, at one point, said he expected the tokens to double or quadruple in value compared to what was written in our contracts.”
A second Civil reporter, who still works at one of the newsrooms sponsored by the startup, told CoinDesk the startup’s leadership “absolutely” talked up the token’s growth potential to employees.
“The expectation was they were going to be able to get rich off of it,” the source said.
According to this insider, who spoke on the condition of anonymity, days before the token sale flopped, Civil addressed reporters’ concerns about it by saying that crypto “whales” would buy up unclaimed tokens to help the startup reach its threshold goal.
Iles denied making any promises but acknowledged that the company tried to get large buyers involved when the sale languished.
“As the sale wound down, it was obvious to everyone that the only way to meet the goal would be to attract large-scale token buyers… of course we were still working hard to bring in major buyers during the final days,” Iles said. “We communicated our ongoing efforts on this front, but there was never any promise or guarantee made.”
The failed token sale forced Civil to refund “purchasers” $8 million, including $1.1 million worth of CVL purchased in September by the partner company ConsenSys, which is spearheaded by Civil’s primary investor, Joe Lubin.
While Iles confirmed that Lubin was promptly reimbursed, reporters at Civil newsrooms say they don’t know if they will ever receive the token portion of their compensation packages.
Iles confirmed a Quartz report that he will eventually own 5 million CVL, whenever they are distributed.
As for when that is expected to happen, Cassano and an insider say they haven’t been given a timetable, despite Iles’ statement to the contrary.
“We’ve communicated target dates to the newsrooms and plan to confirm details in the next few weeks,” Iles said. “We will not share those dates publicly before speaking to them.”
Furthermore, Iles said Civil has an active GitHub project for an open-source application and publishing platform, often garnering dozens of contributions a week.
The controversy about employee compensation at Civil raises different legal questions than those that usually come up in the discussion of tokens, which usually center around whether initial coin offerings (ICOs) are unregistered securities.
Preston Byrne, a partner at the law firm Byrne & Storm, P.C., told CoinDesk that different laws might apply to private offerings via employee contracts rather than strictly public offerings.
“There are things that you can be given or possess that increase in value but aren’t a security,” Byrne said. “You’ve got to pay your people and you’ve got to be honest with them, otherwise different questions arise.”
Byrne also added that the legal questions surrounding tokens will be driven by specific facts and circumstances. In the case of CVL, the public buyers were reimbursed, meaning Civil may not have anything to worry about from the U.S. Securities and Exchange Commission (SEC) or from “purchasers.”
“There is a provision in the securities laws that allows anyone that has participated in a sale of unregistered securities [to] extinguish its liability to those persons by affording them the right to rescind,” Byrne said.
“With regards to employees, it depends on how they acquired the thing and whether they are deemed to be part of the offering.”
XRP Nears Longest Stretch as World’s Second-Largest Cryptocurrency
XRP has now officially held its ranking as the world’s second largest cryptocurrency by market capitalization for the longest period since 2016.
On Nov. 15, the market capitalization of XRP, a cryptocurrency long connected to San Francisco blockchain startup Ripple, reached $19.39 billion, enough to establish it as the world’s second largest cryptocurrency after overtaking ether (ETH), long the market’s reigning number two asset.
This 11-day stretch is the longest XRP has spent at number two since it held the title for 13 days from Jan. 26 to Feb. 8 in 2016.
In fact, the dominance rate for XRP, an indicator that tracks the percent of the total cryptocurrency market capitalization contributed by the cryptocurrency, reached a 45-week high of on 12.74 on Nov. 20 (it has since retreated slightly to just above 11 percent). For comparison, bitcoin’s (BTC) dominance rate is currently 53.9 percent while the rate of ether, now the world’s third-largest cryptocurrency registers 9 percent.
Notably, since XRP began its market share uptick on Nov. 15, the broader cryptocurrency market has witnessed a significant sell-off, losing nearly $90 billion and 40 percent of its total market capitalization to date.
Needless to say, the market rout has resulted in significant depreciation to many if not all cryptocurrencies against the U.S. dollar. XRP and ETH are reporting 22 percent and 37 percent respective losses in the 11-day span while the world’s largest cryptocurrency is down 32 percent.
Despite XRP’s advance in the market capitalization ranks, ETH, has recorded significantly more trading volume as of late. In the last 24 hours alone, ETH’s exchange volume of $2.47 billion is nearly twice as large as XRP’s $1.3 billion, according to CoinDesk’s Crypto-Economic Explorer (CEX).
Wall Street Journal Reports SEC is Probing Erik Voorhees’ and SALT Crypto Lending ICO Token Sale
US SEC Probes Erik Voorhees’ Salt Lending
Salt Lending, a crypto loan startup created by Erik Voorhees, which also acted as a board member of the company, has been under investigation by the U. S. Securities and Exchange Commission (SEC).
According to the Wall Street Journal, sources familiar with the probe are saying that the company was subpoenaed by the SEC in February because of the Initial Coin Offering (ICO) that the company had in late 2017, in which it was able to raise over $50 million USD. [Rumors: Salt Lending Exit Scam]
The SEC understands that the crypto fundraising event was a securities offering and that it should have been registered with the SEC instead of using the unregulated ICO way. Many tokens at the time were distributed to “insiders” and the sales proceeded without regulation.
Voorhees Was Charged In The Past
Voorhees has a history of not following the regulation of the United States. He was previously charged by the SEC in 2014 for violating the securities law which led him to be banned from a Bitcoin security for the following five years in the country. He was also fined $50,000 USD.
At the time, the SEC determined that Voorhes has, just like now, publicly offered securities without properly registering, which foreshadowed the future of the company that he is involved in. The SEC understands that Salt Lending violated the 2014 ban, so Voorhees will possibly be charged once more for the issues that he has with the law.
The first case happened between 2012 and 2013 when Voorhees publicly offered securities without registering. At the time, it was some Bitcoin-based features like SatoshiDICE and FeedZeBirds that caused him to have problems with the government.
While the SEC has officially declined to comment on the issue, there is a big chance that it might decide that Voorhees indeed violated his ban.
Voorhees’ lawyer, Brian Klein, has affirmed that he is proud to represent the entrepreneur and that he is a real visionary who abides by his SEC settlement terms. He called the Wall Street Journal story an unfair attack on him and affirmed that the allegations are not true.
I am proud to represent @ErikVoorhees, a real visionary, who has abided by his SEC settlement terms. This @WSJ story is an unfair attack on him relying on unsubstantiated allegations, anonymous sources, and he is not even a party to the lawsuit discussedhttps://t.co/ouoB3ghTAb
— Brian Klein (@brianeklein) November 16, 2018
The feud between Voorhees and the media has started a long time ago. The WSJ has affirmed recently, in September 2018, that ShapeShift, the company which Voorhees is a CEO of, has been used by criminals to launder $9 million USD. Voorhees has claimed at the occasion that the claims were inaccurate and that the work of the WSJ was deceptive.
Only future may tell what will happen to Voorhees, but his situation is far from very good right now as he is involved in his fair share of scandals and might be prosecuted by the SEC. Despite what will happen to him, however, it is certain that Salt Crypto Loans is in deep trouble now.
Erik has gone on the defense against this latest WSJ article and published his own rebuttal:
— Erik Voorhees (@ErikVoorhees) November 16, 2018
Here are the three points he drives home to refute the WSJ article:
First, I am not a party to the private lawsuit brought against Salt by a former CFO of the company, filed a few days ago and the apparent basis of this story rushed into print.
Second, I have abided by the terms of my SEC settlement.
Third, the Wall Street Journal has not dealt with me or my company ShapeShift in good faith and this recent story is simply an unfortunate continuation of that trend. As an example, the Wall Street Journal ignored evidence provided to demonstrate the ways in which ShapeShift took regulatory compliance seriously. What they prefer to do, instead, is rehash the point that I am not fond of fiat currency. Again, this is not news, nor is it relevant to legal matters having little or nothing to do with me like the Salt lawsuit.
What are your thoughts on this? Did the WSJ rush something to print for the headlines or was this a direct attack on Erik Voorhees? Leave your comment below
eToro Senior Analyst Calls XRP a ‘Unique Asset’, Says ‘XRP Is Winning at Social Media’
On Monday (26 November 2018), Mati Greenspan (@MatiGreenspan on Twitter), a Senior Market Analyst at eToro, one of the world's leading social trading/investing platforms, announced the results of a poll (conducted on Twitter last week), which asked people to vote for their favorite cryptocurrency.
In today's "Daily Market Update" (a daily newsletter that reflects Greenspan's personal opinion of the market rather than representing eToro's official position, and which is "for information and educational purposes only and should not be considered to be investment advice or recommendation"), Greenspan thanks everyone who participated in the voting, and revealed the results of the poll:
What's your favorite crypto?
(Please RT for max sample.)
— Mati Greenspan (@MatiGreenspan) November 22, 2018
As you can see, XRP easily won, with 46% of the votes.
Greenspan said that he was not surprised by the results:
"This is actually well in line with what I was expecting. I've been saying for several weeks now that XRP is winning at social media. Within moments of posting the poll, a slew of responses came in from XRP supporters urging the community to vote using the hashtags #XRPtheStandard and #XRPcommunity."
Even more interestingly, he said that he was impressed with the passion and enthusiasm of the XRP community, and expressed hope that in future, the U.S. Securities and Exchange Commission (SEC) would clarify the status of XRP, thereby making it easier for XRP achieve even greater adoption:
"However, it's nice to see such an active community surrounding Ripple. Let's wait for the decisions of the SEC and hope that eventually, the large financial institutions may consider adopting it as a payment method."
But there was more. Greenspan said that since XRP won this poll, he felt that it was appropriate to provide "a quick technical analysis on this unique asset." Here it is:
"Bitcoin had an amazing 2017 but in percentage terms, the gains were dwarfed by XRP, which rose by a total of 33,493% during the course of the year. The only way we can get a good look at something like this is by using a logarithmic chart, which highlights percentage movements rather than static price.
Also unlike bitcoin, the price floor on XRP has a bit of a cushion, which was provided by the run-up to the X-rapid release in late September. Thus the red line at $0.25 can be seen as strong support. The yellow line at $0.35 also played a significant role during August and September and so can be seen as a light level of support.
For now, we're actually holding above the yellow line, which is a rather positive sign."
At press time, according to data from CryptoCompare, XRP is trading at $0.3560, up 4.12% in the past 24-hour period.
The results of Greenspan's poll are in line with other similar polls on Twitter in the past few months, and reflects the amazingly strong support XRP receives from its many fans on social media platforms. For example, these are the results of a poll carried out by Weiss Ratings last month:
— Weiss Ratings (@WeissRatings) October 11, 2018
And here is another one, this time by Ran Neu-Ner, the host of CNBC's "Crypto Trader" show:
The results of this poll really surprised me - they show we really have a big problem in Crypto. I REALLY thought American Airlines miles would do way better!!! pic.twitter.com/9HsKaFr7Zx
— Ran NeuNer (@cryptomanran) November 18, 2018
Bitcoin ABC’s Bitcoin Cash Software Enhancement Prevents Chain Reorganizations
There is a new version of Bitcoin ABC software that has been enhanced in order to prevent chain reorganizations to affect the stability of the network. It is important to remember that the Bitcoin Cash (BCH) network experienced a network upgrade earlier this month. There were two proposals, Bitcoin ABC and Bitcoin SV.
After experiencing a hard fork on November 15, Bitcoin ABC released a statement in which they inform that the new release allows miners to know that transactions are immutable after ten confirmations. This would protect the network against deep reorganizations that affect the network.
The Announcement Released Reads As Follows:
“You may have read on different media there are a few miners that continue to threaten the BCH network with chain reorganizations. Many see this as a threat to the fundamental functionality of the chain and its use as peer to peer cash. We understand the uncertainty this cause for users, businesses, and the market in general.”
According to the statement, the Bitcoin Cash network has been very stable since it was upgraded back on November 15. The team behind it is currently working in order to keep users’ funds secure and the network fully functional.
In this way, it will be much more difficult for another network to take over the Bitcoin ABC network. Although it does not mean that reorganizations are impossible it will have a positive impact on the network.
At the time of writing, Bitcoin Cash has a market capitalization of $2.91 billion dollars and each BCH coin can be purchased for $166 dollars.
The Bitcoin ABC 0.18.5 version can be downloaded on their official website.
Paraguay Endorses Plan to Build the World’s Largest Bitcoin Mining Farm
The government of Paraguay and the Blockchain Technology Foundation “Commons Foundation” recently signed an agreement that will serve as a basis for the construction of the world’s largest mining farm in a concerted effort to position the country as a reference in terms of technological innovation.
According to a press release from the “Commons Foundation” the project known as the “Golden Goose Project” will be implemented in Ciudad del Este, one of the country’s main cities, known especially for its tourism industry and commercial development.
The contract establishes that the Paraguayan government will provide a concession for the use of a plot of land of approximately 50 square kilometers located near ‘Itaipu’ Hydroelectric Power Plant, the world’s largest clean energy plant, with a stable price of electricity for a period of 15 years and all facilities in the field of telecommunications.
Choi Yong-Kwan, Chairman of the Commons Foundation, was quite optimistic about the agreement, stressing that not only is the economic factor essential but that they were looking for an eco-friendly alternative:
“Only 10 to 20 percent of electricity is produced at Itaipu hydroelectric plant and consumed in Paraguay. More than 80 percent of its electricity is exported overseas. We will build the world’s largest mining center in Paraguay using low-cost and abundant clean energy.
It is important to note that, the Blockchain Technology Foundation “Commons Foundation” plans to conduct a series of pre-sales and an Initial Exchange Offering under Paraguayan laws to fund the project. Funding mechanisms will be through MicroBitcoin(MBC), BTC(Bitcoin), and Ethereum(ETH).
For his part, Hugo Velázquez Moreno, vice president of Paraguay commented that the nation is quite interested in the project, assuring that not only the Foundation has contractual support from the government, but they hope in the future to adapt the constitution to this new industry.
“The Paraguay government will actively support the Commons Foundation’s ‘Golden Goose project’ and provide tax breaks through constitutional revisions,”
With this kind of support, Mr. Choi Yong-Kwan assured that there is a high probability of succeeding in the project:
“We will create a new world-class ecosystem through ‘Golden Goose project,’ which is the world’s largest cryptocurrency mining center and the world’s largest cryptocurrency exchange.”
Coinbase Backs Security Token Startup’s $12.7 Million Funding Round
Security token startup Securitize announced it has raised nearly $13 million in a Series A funding round Monday as part of its mission to digitize traditional securities products on a blockchain.
Led by Blockchain Capital, the equity investments were made to help the company bring on “knowledgeable investors” as it prepares for a security token offering, co-founder and CEO Carlos Domingo told CoinDesk. The company further aims to streamline its investor relations, build up liquidity and compliance efforts, and maintain capital formation.
With the deal, Blockchain Capital co-founder and managing partner Brad Stephens will join Securitize’s board of directors, the startup said. Coinbase Ventures, Ripple’s Xpring, OKEx’s OK Blockchain Capital, Global Brain and NXTP also participated.
Domingo explained that the company wants to transition the securities industry, currently estimated at some $7 trillion, to decentralized ledgers as they are more transparent, auditable and can facilitate instantaneous transactions.
“We believe the tokenisation of legacy securities industry is taking place right now on a global scale. To take advantage of this emerging market opportunity, we plan to grow our engineering team and geographic coverage from Latin America to the Asia Pacific Region and other parts of the world for business development.”
The company has already begun issuing digital securities for companies such as 22x, SPiCE VC and Augmate, as well as Blockchain Capital’s BCAP security token.
Digital securities based on the company’s protocol have also been traded on AirSwap and the OpenFinance Network in a regulatory-compliant manner, a firm noted.
Xpring senior vice president Ethan Beard explained in a statement that the Ripple initiative is focused on tokenized securities, among other areas.
“Securitize is great team focused on unlocking the private securities market with compliant, liquid, and easily tradable assets,” he added.