Bank of America (BoA) has gained a further cryptocurrency-related patent, a filing confirmed Oct. 30, continuing its efforts to “be prepared” for the industry’s future growth.
The latest award, which adds to the bank’s mounting stack of cryptocurrency and blockchain patents, references storage methods for private keys.
Specifically, the filing reads, current opportunities for ensuring private keys remain untampered with are insufficient.
“[W]hile many […] devices may provide for acquiring evidence of a security breach (i.e., physical or non-physical tampering with the device and/or the data), such devices do not provide for real-time response to such breaches, such that misappropriation of private cryptography keys is prevented,” BoA writes. The patent filing continues:
“Therefore, a need exists for a secure means for storing private cryptography keys. The desired storage means should reduce the risk of misappropriation of keys due to the keys being stored internally within a computing node that is frequently or, in some instances, continuously accessible via a public communication network, such as the Internet.”
As Cointelegraph has reported, the banking giant has sought several patents in the past few months, these relating variously to external validation, data storage and others.
At the same time, officials have remained highly skeptical of cryptocurrency itself, banning credit card customers from purchasing it while admitting Bitcoin (BTC) represented a “troubling” issue for its operations.
In June, CTO Catherine Bessant said that the patent routine should safeguard the bank’s interests in the event of the technology surrounding cryptocurrency becoming mainstream.
“We’ve got under 50 patents in the blockchain/distributed ledger space,” Fortune quoted her as saying at the time.
“While we’ve not found large-scale opportunities, we want to be ahead of it we want to be prepared.”
A cryptocurrency ticker application called CoinTicker appears to be installing two backdoors on Apple Macs, cybersecurity firm Malwarebytes warned Monday.
The app downloads and installs parts of two different pieces of malware – EvilOSX and EggShell – both of which are backdoor applications that can be used to log keystrokes, steal data or execute certain commands. Malwarebytes director of Mac and Mobile Thomas Reed wrote that it is possible the malware was designed to steal cryptocurrency keys.
CoinTicker acts as a legitimate application designed to present the price of a selected cryptocurrency on request. The user installing the app can choose between bitcoin, ethereum, monero, zcash and others, according to a screenshot. However, the app also installs EvilOSX and EggShell in the background.
The app does not require root or other elevated permissions, meaning the user likely will not see any sign of infection.
It’s unclear what specifically the app’s creators want, but Reed noted that “it seems likely that the malware is meant to gain access to users’ cryptocurrency wallets for the purpose of stealing coins.”
The fact that the malware is distributed through a cryptocurrency app supports this theory, he wrote.
Malwarebytes for Mac now looks for the CoinTicker app, as well as its malware components, he added.
Alrosa, the world’s second largest diamond maker has announced that it is joining Tracr, the blockchain-based end-to-end diamond tracing solution developed by South African diamond behemoth De Beers Group for the purpose of ensuring that conflict diamonds do not enter its supply chain.
In a statement published on its website on October 29, the Russian company revealed that it is joining the project because it supports the goal of protecting consumers and ensuring the integrity of the authenticity of their diamonds.
Tracr’s Use and Growing Influence
Signet Jewellers, the world’s largest diamond jewelry retailer joined Tracr as part of a growing movement to ensure that diamonds sold to consumers are not so-called “blood diamonds” – products of illegal slave labour from African war zones which effectively fund wars and armed criminal groups in countries like Angola, DRC and Sierra Leone.
After months of anticipation, Tracr recently demonstrated its capabilities with the successful tracking of a set of diamonds by De Beers. Under Tracr’s framework, each diamond is given a unique ID code as soon as it is mined. This code contains information about the stone’s weight, color, and clarity, which is then stored on a blockchain where it can be accessed by all Tracr participants.
A number of major diamond industry players have already committed to the Tracr project as the gem industry increasingly recognizes the blockchain as a solution to the supply chain challenges of ensuring transparency, trust, traceability, privacy and compliance. Consumers who buy diamonds from these organisations are thus assured that their diamonds have passed through different layers of compliance and certification from the Kimberley Process Certification Scheme, World Diamond Council System of Warranties and Responsible Jewellery Council Code of Practices.
Alrosa’s decision to join Tracr further underscores the importance of blockchain technology to the diamond industry as the two largest diamond producers in the world operating in the two largest diamond production zones on earth – South Africa and Russia – will now collaborate on developing and improving the platform.
Speaking about the partnership, Sergey Ivanov, CEO, Alrosa, said:
“Traceability is the key to further development of our market. It helps to ensure consumer confidence and fill information gaps, enabling people to enjoy the product without any doubts about ethical issues or undisclosed synthetics. Alrosa is glad to participate in testing Tracr, along with other market solutions. We believe tracing requires industry cooperation and complementation for the sake of a common goal.”
Bruce Cleaver, CEO, De Beers Group expressed delight at Alrosa’s decision to join Tracr, saying that the collaborative efforts of the world’s two largest diamond producers will deliver “significant benefits for consumers and diamond industry participants.”
Choi Jong-Ku, the commissioner of the Financial Services Commission (FSC) of South Korea, has reaffirmed that there exists no issues related to compliance and security in the process of banks providing virtual bank accounts to local cryptocurrency exchanges.
At the state affairs audit conducted by the government of South Korea to evaluate the progress of all government agencies and commissioners in the nation, commissioner Choi emphasized that as long as cryptocurrency trading platforms are well equipped with Know Your Customer (KYC) and Anti-Money Laundering (AML) systems, digital asset platforms will be able to obtain banking services from the country’s commercial financial institutions.
“There exists no issue in banks providing virtual bank accounts to cryptocurrency exchanges. If digital asset trading platforms have KYC and AML systems in place, there is no problem in issuing virtual bank accounts to exchanges,” commissioner Choi said.
In South Korea, crypto exchanges employ a unique system called virtual bank accounts that enable users to deposit and withdraw the South Korean won instantly so that users can hold KRW on exchanges securely.
Crypto Investors Optimistic
In early 2018, the government of South Korea encouraged banks to prevent working with cryptocurrency exchanges to eliminate the possibility of laundering money using digital assets.
While Nonghyup, a major commercial bank in South Korea that has worked with crypto exchanges for over a year, continued to provide services to local exchanges, in mid-2018, even Nonghyup was pressured to end its services to Bithumb and other major cryptocurrency exchanges.
The public statement released by commissioner Choi clarified the stance of the government and local financial authorities towards cryptocurrency exchanges and in the years to come, local digital asset trading platforms will no longer suffer from the lack of banking services from major financial institutions in South Korea.
South Korea Blockchain Association, which represents both small to medium-size and major cryptocurrency exchanges in the local market, expressed its optimism towards the newly established stance of the FSC and added that the initial problem related to KYC and AML introduced by the FSC 10 months ago have been resolved.
Considering the concerns of the FSC and local financial authorities towards security breaches, the South Korea Blockchain Association and the country’s largest cryptocurrency exchanges have initiated the process of obtaining insurance to protect investor funds.
Bithumb, Upbit, Gopax, Korbit, Coinone, and other large cryptocurrencies have also recently been approved by the government of South Korea for having sufficient security measures and internal management systems in place.
In August, security analysts at KISA and the Ministry of Science and IT told local publications that UPbit, Bithumb, Korbit, Coinnest, Coinlink, Coinone, Coinplug and Huobi a have solid ecurity and internal management systems integrated into their exchanges.
South Korea’s Crypto Exchange Market Infrastructure Strengthening Rapidly
This week, Bithumb, the second largest cryptocurrency exchange in the country, eliminated all banking options on its platform apart from Nonghyup, its partner bank.
Investors, confused by the abrupt decision of Bithumb, experimented with emerging crypto exchanges like Gopax, which is financed by the nation’s second largest commercial bank Shinhan.
Gopax, possibly due to the assistance of Shinhan, supports deposits and withdrawals for all local banks in South Korea, along with Kakao and Dunamu’s Upbit.
The competition in South Korea’s crypto exchange market is increasing with key players like Upbit, Gopax, Coinone, and Korbit gaining more market share, offering investors with several alternative options.
Benedict Evans, a general partner at Andreessen Horowitz (A16Z), one of the most successful venture capital firms in the world, has said that crypto is quite similar to the internet in 1993.
As with any other emerging technology or market, the cryptocurrency space has seen a large number of failed projects and scams over the past several years.
However, according to Evans, if investors focus on the failed projects and fraudulent operations in the exponentially growing cryptocurrency sector, it would be like dismissing the internet in 1999 based on the lack of progress of Usenet, Cuecat, and Boo.com.
“Crypto today has a lot in common with both the internet in 1993 and the internet in 1999. Huge potential with few of the use cases invented yet, combined with froth, scams and delusion. This makes it easier to dismiss. But dismissing crypto as a useless scam is much like looking at Usenet, Cuecat and Boo.com and dismissing the internet. It mistakes applications for the enabling layer.”
Emerging Technology is Disguised as Inferior Technology
Crypto today has a lot in common with both the internet in 1993 and the internet in 1999. Huge potential with few of the use cases invented yet, combined with froth, scams and delusion. This makes it easier to dismiss (“useless AND a scam!”).
— Benedict Evans (@benedictevans) October 29, 2018
Previously, Ben Horowitz, a legendary venture capital investor and the co-founder of A16Z, emphasized that one deceptive aspect about emerging technologies like crypto and mobile phones is that in the beginning, emerging technologies seem significantly inferior to existing technologies.
Hence, due to the discrepancy in efficiency and practicality between emerging technologies and existing solutions, it is easier to dismiss newly created technologies on the premise that they are dominated scams.
In a new market, investors often try to rush in to invest in every new project to catch the bubble. Several cryptocurrency projects reached multi-billion dollar valuations in late 2017 as the valuation of the cryptocurrency market reached $800 billion.
But, Evans explained that as the market matures, more mainstream use cases will emerge, and technologies employed by projects in the sector will drastically improve.
“Looking at crypto and only seeing the scams is like looking at the internet in 1999 and only seeing the bubble. Looking at crypto and seeing no use cases is like looking at the internet in 1993, when the web was 3% of traffic,” said Evans.
In regards to the popular argument against cryptocurrencies that they have no clear use case, Evans stated that in 1993, there was not a sufficient reason for a mainstream use to utilize the internet.
The difference between crypto in 2018 and the internet in 1993 is that cryptocurrencies already have several use cases that surpass the efficiency of legacy systems.
For instance, as a cross-border payment method, it is substantially cheaper to send a Bitcoin payment than rely on banking systems, as seen in the settlement of $194 million worth of Bitcoin with a $0.1 fee.
“OK: no mainstream use cases. There was no reason for any normal person to use the internet in 1993, which was why no normal person did use it, and the thing that changed that, the web, barely existed. We had a capability.”
Crypto is Still in its Infancy
For investors, venture capital firms, and hedge funds, it is easier to dismiss crypto than to understand and recognize its potential in the long-term to operate as a consensus currency and a global supercomputer.
But, if crypto does achieve mainstream adoption, investors that did not consider the potential of the technology will be left out, as seen in the case of the internet in 1999.
Bitcoin Max, a Brazilian cryptocurrency exchange, has recently seen two banks in the country, Santander and Banco do Brasil, reopen its accounts following preliminary decisions made by Brazil’s Federal District Court. They reportedly reopened the exchange’s accounts to avoid paying fines.
Banks Reopen Crypto Exchange Accounts
According to local news outlet Portal do Bitcoin, failing to comply would have cost Santander up to $1,350 and Banco do Brasil up to $5,400. Speaking to the outlet, Bitcoin Max’s attorney Leonardo Ranna reportedly revealed its bank accounts “have been restored,” along with those of its partners.
The ordeal may not yet be over, as the case against Banco Santander saw it comply because of a “kind of injunction” that determined the financial institution had to reopen the exchange’s accounts within five days. The injunction had previously been denied by a judge, Portal do Bitcoin reports, which saw Bitcoin Max’s lawyers appeal to a Federal District Court Judge.
The new decision came as the judge, Ana Catarino, considered the banks’ lack of communication about shuttering the exchange’s account to be “abusive conduct,” prohibited by the country’s consumer protection laws.
Banco do Brasil reportedly even held $32,300 of the exchange’s funds in limbo. A lawsuit against it was filed on Sept. 12. Initially, an injunction was denied, but judge Fátima Rafael, from the Federal District Court, later gave the financial institution a 24-hour period to reopen Bitcoin Max’s accounts or face a fine of about $540 per day.
Per Portal do Bitcoin, the exchange’s CEO, Adriano Zanella, claimed the banks didn’t even reveal they were going to shut down its accounts. The report reads:
“Adriano Zanella, CEO of Bitcoin Max, said that in both situations there was no formal communication from the banks on the closure of accounts. In the case of Banco do Brasil, Zanella states that he learned of the blockage through the manager of his agency at which point he would ‘carry out an electronic transfer through the bank.’”
This is notably not the first time a cryptocurrency exchange in the country sees the judicial system side with it against a financial institution. In August, Brazilian exchange Waltime won a court battle against Caixa Econômica Federal, a bank that had frozen its accounts with over $200,000 in them.
Cryptocurrency Exchanges in Brazil See Scrutiny
As CCN has reported, cryptocurrency exchanges in Brazil have been under scrutiny. Back in August, the government sent them a 14-point questionnaire to learn more about their businesses, and earlier this month the country’s antitrust watchdog, CADE, sent them another questionnaire they have to answer or face a fine that could reach $25,000.
Notably, these developments came at a time in which XP Investimentos, Brazil’s biggest investment firm, is launching its XDEX cryptocurrency exchange. However, the country’s biggest bitcoin exchange, Mercado Bitcoin, recently fired “at least” 20 employees.
Investment funds in the country have also been given the green light to invest in cryptocurrencies like bitcoin, although only indirectly. This means they can’t buy bitcoin themselves but can acquire derivatives and foreign funds.
Investment banking giant Goldman Sachs has quietly begun signing up a limited number of customers for its yet-to-launch bitcoin trading product.
Citing a source familiar with the matter, The Block reports that the 149-year-old Bulge Bracket bank has onboarded a “small number of clients” to actively trade the derivative, a non-deliverable forward, which is a cash-settled product that is comparable to a futures contract but does not trade on an exchange. Additionally, the bank continues to consider launching custody services for cryptoassets.
Notably, the publication’s source also contradicted an earlier report from another crypto site which alleged that Goldman Sachs was “actively exploring the creation” of a non-deliverable forward for ether, the native asset of the Ethereum platform. That would have been a major stamp of approval for Ethereum, as well as altcoins in general, as it seeks to achieve the level of Wall Street exposure that bitcoin has begun to see over the past 12 months. However, the source said that the bank is not pursuing the creation of an ether derivative.
At present, bitcoin derivatives are available on several regulated US trading platforms, including options exchanges CME and CBOE. Both of these firms offer cash-settled bitcoin futures contracts, and each has given investors reasons to believe that they will expand their crypto offerings in the future. CBOE, on its part, has outright expressed its desire to remain a leader in the cryptocurrency derivatives marketplace, while CME has launched an ether price reference rate but in public statements has been less-than-enthusiastic about the crypto industry.
LedgerX, an institutional crypto derivatives platform that currently offers a suite of bitcoin products, is reportedly building out support for ether as well, pending approval from the Commodity Futures Trading Commission (CFTC).
Meanwhile, Bakkt, a crypto startup launched by the owner of the New York Stock Exchange (NYSE), is preparing to launch its first bitcoin futures product, which is scheduled to begin trading on Dec. 12. Unlike the contracts available on CME and CBOE, Bakkt’s bitcoin product will be physically-settled, meaning that actual bitcoins will change hands when the contracts expire.
Mistrust of politicians is nothing new, but the perception that bitcoin and other crypto tokens are unregulated has heightened the suspicions of eligible US voters.
According to a survey conducted by blockchain research firm Clovr, 64 percent of respondents across the US political landscape were fearful of politicians coming up with ways to illegally take advantage of campaign donations made in cryptocurrency. The highest level of mistrust was recorded among independents where 70 percent believed politicians would exploit the loopholes. Relatively, Republicans had the lowest level of mistrust at 56 percent while Democrats polled at 66 percent.
The survey, which interviewed 1,023 eligible US voters, also found that the mistrust was also extended to political parties, though on a different level. Regardless of political affiliation, 56 percent of eligible US voters indicated that they wouldn’t trust political parties not to take advantage of the loose regulations that exist on campaign donations made in cryptocurrency.
Misuse by a Political Party
On a party-by-party basis, the perceived likelihood that a politician from a particular end of the political spectrum would misuse crypt funds was lowest for the Green Party at 60 percent. Libertarians polled at 63 percent, Democrats at 83 percent, and Republicans at 90 percent.
From the survey, respondents also revealed fears that cryptocurrency campaign donations could be used by foreign governments and other foreign actors to interfere in elections and the wider political system with 60 percent saying this was likely to be the case. More Democrats than Republicans believed this to be the case with the figure being 66 percent for the former and 58 percent for the latter. Independents, on the other hand, polled at 56 percent.
Despite the concern among eligible US voters that the loose regulations around cryptocurrency could be exploited by politicians and political parties, 54 percent of the respondents expressed confidence that cryptocurrencies are secure enough for use in the political process. Republicans expressed more confidence at 63 percent than either Democrats (52 percent) or independents (45 percent).
Given the option of giving to a political campaign in cryptocurrencies, 27 percent of Republicans indicated that they would, compared to 25 percent of Democrats and 22 percent of independents. However, some states are yet to allow cryptocurrency donations to political campaigns citing the anonymous nature of blockchain technology and the general suspicions that exist around cryptocurrencies.
“There are several reasons why state governments are hesitant to adopt cryptocurrency donations, but the two major ones are the validity of cryptocurrencies and the anonymity of the donor, one of the hallmarks of blockchain technology,” the report, titled “Crypto & Politics: Voters’ Perceptions of Cryptocurrency and Politics,” said.
After months of speculation regarding the status of Venezuela’s much-publicised Petro cryptocurrency project, the Venezuelan government has announced that the Petro is now available for sale and can be bought with bitcoin and litecoin.
A tweet from the official account of the Venezuelan Vice president of the Economy, Tareck El Aissami posted on October 29 reads:
“The Petro may be acquired by legal and natural persons from its web portal.”
— Vicepresidencia de Economía (@ViceEconomia) October 29, 2018
Persistent Lack of Clarity
It will be recalled that prior to this announcement, there had been a prolonged period of confusion regarding the status of the Petro, which was billed by president Nicolas Maduro to be the magic pill to end Venezuela’s ongoing economic turmoil. Based on Venezuela’s vast untapped oil reserves primarily in the remote Atapirire region, the digital currency was marketed by Venezuelan authorities as a means of circumventing debilitating U.S. economic sanctions by monetising the country’s primary export product to a vast global market of investors without needing the U.S. Dollar.
A visit to urban and remote areas of Venezuela showed no evidence of Petro-denominated economic activity, with most people in Venezuela just as confused about the whereabouts of the state-backed cryptocurrency as those outside.
Petro’s continued absence, bitcoin trading volumes in the country hit unprecedented highs as Venezuelans escape the worst effects of the country’s runaway hyperinflation by becoming the most prolific bitcoin traders on earth relative to their population. President Maduro’s government has tried to encourage use of the Petro through a number of means including ordering banks to use the cryptocurrency and charging fees for passports in Petro.
Initially scheduled for November 5, the announcement of the Petro’s availability comes as a mild surprise. Whether or not the latest announcement declaring the Petro available will actually turn out to be accurate however remains to be seen, as does the potential takeup and adoption by inflation-wary Venezuelans who already have very low levels of trust in government pronouncements and projects.
According to the official Petro website quoted in the tweet, Petros are now available for sale to buyers using bitcoin and litecoin.
The Petro’s block explorer also claimed to have 304 blocks with 41 connections at press time.
In the light of the controversy surrounding the ICO – which president Maduro claimed was a success with as much as $5 billion raised – it remains to be seen how the market will respond to the news from Venezuelan authorities.
Bruno Block’s Trapdoor
Yesterday William Cordes, CEO of Oyster, announced that some events of extreme intrigue had taken place at the hands of the project’s original designer, Bruno Block. According to Cordes, Block was able to use a function within the Oyster smart contract — a function which he insisted must remain in the live code — to make himself “director” and thus mint new crypto tokens, at least 3 million, which he subsequently moved to KuCoin and sold to the tune of at least $300,000.
“Despite Oyster passing three separate smart contract audits, we were told by Bruno Block, the original founder and chief architect of the project, that the directorship of the token contract had to remain open so that the peg could be adjusted over time. This ultimately turned out to be a trapdoor mechanism in the contract that was eventually exploited. This contract was written by Bruno Block prior to the ICO, at which point Bruno was the only member of the team. We relied on the auditors involved here for assurance that the smart contract was safe. Bruno was the only one who had the ability to transfer directorship within the PRL smart contract. After our initial review, we are inclined to believe that these were solely the actions of Bruno Block and that he did this now to avoid detection from KuCoin KYC procedures (that will be implemented on November 1st). These KYC procedures would have limited withdrawals on Non-KYC’ed accounts to no more than 2 BTC per day and would have prevented this from happening. This was well-orchestrated and well-executed (at a time when he knew a majority of the KC team would be offline). This also caught the entire team outside of Bruno Block by surprise, as the team collectively holds ~5% of the total supply in personal wallets. The team has been working tirelessly on this since day 1, without pay at some points in time. This project has been built on the back of hard work and raw determination and we will not let Bruno’s role as a bad actor in all of this undermine a project that the entire rest of the team is completely devoted to.”
According to the investigation at Oyster, the attack culminated in crypto tokens being created and issued to Ethereum address 0x0001Ee57Bb28415742248d946D35C7f87cfd5A54. The coins were subsequently sent to the exchange and sales and withdrawals were made before the exchange and Oyster’s team could put a stop to it. As you can see from the image below, all of the transactions were made within a period of about 6 hours.
The bitcoin address associated with the withdrawals from KuCoin has received much more than $300,000 in BTC. Over the course of 22 deposits, the address garnered more than 70 BTC (over $400,000), all on the same day. It is unclear where the coins went from there, but it’s safe to presume that the exit scammer has made attempts to realize his gains in a more transmittable way — say paper cash.
The post on the subject makes clear that investor tokens are “safe,” but it, unfortunately, doesn’t account for the fact that the overall value of the tokens has been diluted by the arbitrary creation of millions of new tokens for the single purpose of fraudulent enrichment. Oyster also promises to try and make the traders on KuCoin — people who unknowingly bought fraudulent coins — whole.
“In the interim, our team will be working around the clock to remedy this situation. We don’t know why Bruno did what he did or what his intentions were at the end of the day, outside of profiting from a loophole that he intentionally left in the smart contract. While I still take full responsibility for this all transpiring, I had no reason to believe Bruno would do something like this to harm the project and much of the work that he had a significant role in creating. We will not let his selfish actions today damage the long-term viability of the project.”
No word has surfaced from Bruno Block. Certainly a heist worth overall less than $1 million is not enough to disappear forever, and more importantly, he will certainly have the authorities on his trail before long. Interestingly, the post from William Cordes makes no mention of having contacted the authorities, but the crypto exchange KuCoin will be forced to do so.
The Thai Securities and Exchange Commission has issued an investment warning against ICOs operating in the country without its recognition, registration and supervision.
The Bangkok Post reports that Thailand’s premier markets regulator is taking action after discovering a number of unregistered coin sales being promoted in Thailand through social media platforms like Facebook and Youtube.
“High Investment Risk”
In its warning, the SEC specifically named nine such unregistered entities offering unrecognised cryptocurrency sales in its jurisdiction. The companies named are: Every Coin, Orientum Coin (ORT Coin), OneCoin and OFC Coin, Tripxchain Coin (TXC Coin), TUC Coin, G2S Expert ICO, Singhcom Enterprise ICO, Adventure hostel Bangkok ICO and Kidstocurrency ICO.
According to the regulator, none of these entities has gone through the necessary steps for approval such as making an official application, showing evidence of meeting qualifying criteria and having their smart contracts assessed for adequacy. The SEC categorised these investments as “high investment risk,” urging investors to refrain from putting their money into them.
It will be recalled that in 2017, Thailand’s SEC released its ICO regulation guidelines which stated in part:
“ICO fundraising needs to be done through an ICO portal approved by the SEC. The ICO acceptance criteria may include due diligence and screening of funders from dishonest people. The source code of the smart contract will automatically be enforced against the contract. After the sale, the SEC publishes a copy of the statement on the SEC website.”
Going further, the regulator also mentioned that in all the cases regarding the listed ICOs, the amount of information provided is not enough to conclusively present an investment case, and even worse, there is no evidence that the coins being sold will have enough liquidity to be listed for trading, and as such they cannot be exchanged for fiat or other cryptos. What this means to Thai investors is that they could potentially be investing in digital assets that are completely worthless.
Cross-Border ICO Scams
The SEC also noted that the Monetary Authority of Singapore (MAS) had previously issued an investment warning against OneCoin and its affiliated businesses, stating that it was operating without the regulator’s supervision. OneCoin has also attracted investment warnings in several jurisdictions, indicating that its promoters are likely opportunists making their way around the Southeast Asia region trying to take advantage of naive investors.
According to the SEC, their modus operandi is to present cryptocurrency investment schemes that are little more than classic pyramid schemes dressed up in new clothes. These schemes require the addition of more and more investors at an ever-expanding rate to keep functioning. As soon as the number or rate of new additions drops, the entire scheme fails and the promoters abscond with outsized profits, leaving crypto investors holding the metaphorical bag.
All member states of the Financial Action Task Force (FATF) should adopt its recommendation to control the exchange of cryptocurrency, their storage and more, Russian daily news outlet Izvestia quoted a government regulator as saying Monday, Oct. 29.
The Paris-based FATF is an intergovernmental organization established in 1989 with the aim of developing standards to fight money laundering and other illicit forms of financing.
Earlier in October, the FATF announced changes to its standards in regards to digital currencies and businesses involved with crypto-related activities. In its updated guidelines, the FATF notes that virtual asset service providers should be subject to anti-money laundering (AML) and counter-terrorism financing (CFT) regulations, as well as registered and monitored for due diligence compliance.
Speaking to Izvestia, Pavel Livadny, vice president of the Federal Financial Monitoring Service of the Russian Federation (Rosfinmonitoring) appeared eager to implement controls for crypto transactions worth over 600,000 rubles (about $9,120).
As per the recommendations of the FATF, Livadny said that cryptocurrencies “can circulate and be exchanged digitally, and be used for payments and investments.”
Accordingly, authorities should bring those activities under regulated control, as well as monitor storage, issuance, and exchange into other crypto assets, Izvestia reports.
At present, no hard-and-fast regulation governing cryptocurrency exists in Russia, with a draft bill to formalize the gray areas of the economy still winding its way through parliament.
Question marks remain over tax obligations of cryptocurrency holders, while sporadic legal decisions regarding Bitcoin (BTC) have added to its uncertain status.
Livadny added that changes to the Russian law regarding crypto-related monitoring would take effect “in the near future.”
Coincheck, the Japanese cryptocurrency exchange that suffered a $520 million hack in January, has reported increased losses for the third quarter of 2018.
Monex Group, the Japan-based brokerage firm that acquired Coincheck following the hack, released its financial results for Q3 (Q2 in the Japanese financial year) on Monday.
The group’s crypto asset segment, which reflects the Coincheck business, brought in revenue of 315 million yen, about $2.8 million, between July and September. Notably, that number represents a 66 percent decline compared to the previous quarter, during which Coincheck made about $8.4 million in revenue.
Although the costs for the past three months in the crypto segment have been reduced, Monex said the consequence of the hack led to an increased loss, which went up from $2.3 million in Q2 to $5.25 million (588 million Japanese yen) between July and September.
“Since the service suspension in January 2018, Coincheck only allowed existing customers to sell their cryptocurrency,” the report states.
In total, the group has made losses of about $7.5 million since its acquisition of the cryptocurrency exchange.
Back in January, hackers stole some $520 million worth of cryptocurrencies from Coincheck, which led to on-site inspections by regulators and a block on accepting new customers. Monex Group later acquired the platform in April in a $33.5 million deal.
According to data from CoinMarketCap, Coincheck has about $4 million in trading volume on the platform over the past 24 hours.
With about 1.7 million users, Monex Group said Coincheck is currently working on building more complex and secure internal control and security measures in its bid to become a licensed exchange in Japan.
According to the filing, Monex currently has 1,025 employees worldwide, about 15 percent of whom are focused on the crypto asset segment.
Taiwan’s “Crypto Congressman” continued his push for more modernized regulation around the tech by proposing new rules for token sales.
On Friday, Taiwanese legislator Jason Hsu published a list of policy recommendations aimed at aiding cryptocurrency startups, including one that would see the Ministry of Economic Affairs (MOEA) create a new business category, as well as a new legal framework for security tokens.
Hsu also called for the Taiwanese legislature’s Finance Committee to issue guidelines for initial coin offerings (ICOs) with a focus on consumer protection. His proposal comes just days after the nation’s financial regulator announced it would set up ICO regulations within the next eight months.
The Taipei Times reported last week that Financial Supervisory Commission chairman Wellington Koo has told the committee that “national standards” for how ICOs should be conducted would be completed by June of next year.
He announced that these standards would likely outline how tokens may be classified as securities, but notably added that cryptocurrencies being used to purchase goods or act in a manner unrelated to securities offering would not fall under the new regulations.
Hsu’s proposed framework would go further, requiring the MOEA to develop new consumer protection and taxation guidelines, according to Friday’s press release.
He also suggested a specific proposal for security token offerings (STOs) based on the French Commercial Growth and Transformation Act and the U.S. Howey Test. If signed into law, his proposal would clarify which token sales would fall under the nation’s Securities and Exchange Act. STOs could also fall under equity crowd-funding rules and related laws, Hsu’s release noted.
Israeli Blockchain Association, an organization whose primary objective is to educate, develop and empower Israel’s distributed ledger technology (DLT) community, encourage best practices and connect it with global leaders in the blockchain space, has released its third Israeli Blockchain Startup Map.
According to a recent press release by the organization, there are now more than 200 blockchain-based businesses in Israel.
Israeli Blockchain Adoption Steadily on the Increase
Blockchain technology, the groundbreaking technology behind bitcoin and other cryptoassets are undoubtedly gaining broader adoption across various industries around the world. Now, per a report by the Israeli Blockchain Association, there are now more than 200 DLT-related startups in the nation-state.
The body claims that at least 57 Israeli DLT startups are using blockchain to disrupt the nation’s financial technology (Fintech) ecosystem while about 37 firms are focused on the Protocols/Core Infrastructure sectors and several others operate in the security sector of the economy.
20 Blockchain Projects Have Crashed in Israel Since 2018
Of a truth, blockchain technology has proven it has several excellent potentials to that could help transform a vast array of industries, the fact remains that most startups fail to fully understand the nitty-gritty of distributed ledger technology before embarking on their project. This lack of due diligence on the path of these ventures has led to the death of a significant number of blockchain startups.
As reported by TechCrunch earlier this year, thousands of blockchain-linked projects have kicked the bucket so far in 2018, and several others have little or no real use cases. Interestingly, the Israeli Blockchain Association has made it clear that the country has also had its fair share of dead blockchain reports, with about 20 startups no longer functional.
“The Israeli blockchain ecosystem is presently experiencing both a boost and a transformation,”
noted Founding Partner of Israeli Blockchain Association, Roman Gold, adding that most of the local blockchain startups are shunning initial coin offerings (ICOs), plying the equity financing route instead.
Gold also reiterated that a significant number of institutional investors are now venturing into the Israeli blockchain ecosystem. He concluded that,
“Today, fewer startup founders are coming out of morally questionable markets, such as binary options, and gambling. Instead, more institutional players are starting to enter the market. In essence, the market is going through self-purification,”
Forward-thinking corporations and global businesses are fast joining the blockchain bandwagon. Recently, technology giant Sony Corp launched its blockchain-based rights management system for digital content.
Bitstamp, one of the oldest and largest bitcoin exchanges, has been acquired by Belgian investment firm NXMH.
Fortune reports that the Brussels-based NXMH purchased an 80 percent ownership stake in the Luxembourg-based cryptocurrency exchange, which launched in 2011, shortly after the first “bitcoin bubble” drove the bitcoin price up as high as $31 and then back down to $2.
Terms of the deal were not disclosed, but, earlier this year, rumors had circulated that the cryptocurrency exchange — which was launched out of a garage in Slovenia with just 1,000 euros in capital — was seeking as much as $400 million and was in the final stages of inking an agreement with a South Korean investment firm.
While NXMH is headquartered in Belgium, not South Korea, it is a subsidiary of NXC, the South Korean technology investment firm that also owns regional cryptocurrency exchange giant Korbit. In April, NXC denied reports that the firm had acquired Bitstamp for $350 million.
Bitstamp co-founder and CEO Nejc Kodrič told Reuters that the exchange had four interested suitors but chose NXMH since it was willing to allow the bitcoin exchange — one of the largest in the European Union — to continue operating as an independent entity. He said that the firm and Korbit “talked about” merging but decided to remain separate. Consequently, he said that neither traders nor the company’s 180 employees should notice any significant changes.
“The vibrant industry last year sparked potential interest from buyers to make a footprint in the industry. We started to get approached by buyers in the middle of last year,” he said. “We were not looking to sell,” he added during an interview with Fortune. “We were definitely not looking for investment because we didn’t need to raise the capital.”
Kodrič, who said that he retains a 10 percent ownership stake in the exchange, further expressed confidence that aligning with NXMH will aid Bitstamp as it seeks to expand its operations.
“We were very much aligned—where we see the industry going and what the company wants to be,” he said. “They’re willing to help us along the way, and help us with our global expansion.”
Cryptocurrency hedge fund Pantera Capital, which invested $10 million in Bitstamp in 2014, also sold a portion of its stake to NXMH but retained some interest in the exchange.
Hitachi Payments is entering a joint venture with the State Bank of India, the country’s largest bank, to establish a digital payments platform
The collaboration sees Hitachi Payments, the wholly-owned Indian payments subsidiary of 108-year old Japanese conglomerate Hitachi, join the State Bank of India (SBI) in developing a sweeping digital payments platform with applications in point-of-sale solutions (POS) and mass transit roadways in the country.
Hitachi Payments is investing in SBI Payment Services for a 26% stake, a press release confirmed, building on its relationship with the state-owned bank as its technology provider for card and digital payments since 2011.
Specifically, the tech giant is using its expertise in big data analytics and artificial intelligence (AI) to introduce “Lumada”, its IoT platform to the Indian payments sector.
“Hitachi will provide wide range of services contributing to “Digital India” by creating innovative solutions with ‘Lumada’,” Hitachi said. “With this joint-venture, Hitachi will accelerate digitalization of financial services in India by linking up digital payments platform to state-of-the-art digital technologies of “Lumada”, and also will provide solutions for mass transit sector and e-commerce businesses.”
Hitachi Payments notably manages over 55,000 ATMs and 850,000 POS devices in India. With over 420 million customers, the State Bank of India also has over 6 million POS terminals in the country. The bank sees over 70% of its current network managed by Hitachi Payments.
Hitachi president and CEO Toshiaki Higashihara added:
“By establishing the joint venture with SBI, Hitachi will further contribute to the development of digital payments in India by building a state-of-the-art digital payments platform and leveraging SBI’s robust customer network.”
The fast-growing blockchain technology sector has created a high demand for talent and this has consequently resulted in blockchain engineers being among the best-remunerated in the tech sector.
According to CNBC, the average pay for blockchain engineers in the United States is between US$150,000 and US$175,000 making it comparable to what developers who specialize in another high-demand field, artificial intelligence, make. The two fields now currently offer the highest-earning specialized engineering roles. Typical software engineers make an average of US$135,000.
Surge in Openings
This comes at a time when the job postings requiring blockchain technology skills have increased dramatically. For instance, Hired, a San Francisco, California-based tech sector recruitment firm which provided CNBC with the salary stats in the tech sector, has seen a 400% increase in the job postings seeking employees with blockchain technology skills since late last year.
“There’s a ton of demand for blockchain. Software engineers are in very short supply, but this is even more acute and that’s why salaries are even higher,” Hired’s CEO, Mehul Patel, told the business news TV channel.
This is similar to a finding by jobs site Glassdoor which saw job listings related to blockchain and cryptocurrencies increase by 300% in August 2018 compared to the same period last year. In the United States, most of the blockchain-related jobs are located in New York City (24%) and San Francisco (21%). Outside the United States the top-five cities with the highest number of blockchain-related job openings were London (16%), Singapore (7%), Toronto (7%), Hong Kong (6%) and Berlin (4%).
Top Destinations for Blockchain Talent
Per Glassdoor, some of the top-hirers are startups such as Circle, Kraken, Figure, Coinbase and ConsenSys though established firms such as Oracle, IBM, KPMG and Accenture also feature in the top ten.
The findings by Hired and Glassdoor also echo a similar conclusion drawn by leading freelance jobs website Upwork. Blockchain was the fastest growing freelance skill on the telecommuting platform in the United States for the second consecutive quarter. The 2018 Q2 Upwork Skills Index also showed an increase in demand for individuals proficient in the programming languages and frameworks that are required to fill blockchain developer or engineer positions.
A little over a month since legislators in the United Kingdom branded the domestic cryptocurrency market the ‘Wild West’ and called for its regulation, experts have warned that such a move could have disastrous consequences for the fintech market in the world’s fifth largest economy.
According to a report authored by the British Business Federation Authority (BBFA) and cryptocurrency exchange firm TodaQ among others, the efforts by the MPs to introduce measures that would require the country’s financial regulator, the Financial Conduct Authority (FCA), to police the cryptocurrency sector could result in other assets such as bonds, shares and stocks being penalized too.
Initially reported by The Telegraph, the CEO of the BBFA, Patrick Curry, has also argued that such pieces of legislation could have unintended consequences resulting in cryptocurrency exchanges leaving the United Kingdom. This could damage the reputation of Britain as a hub for the fintech industry.
‘Blunt Investment Approach’
Per Curry, such laws could also hamper innovation in the cryptocurrency sector as it is still a nascent technology.
“It is a very blunt instrument approach and I haven’t seen this in other countries,” Curry said. “The use of this technology is still a voyage of discovery and these technologies are being refined for different types of use. My concern is the law of unintended consequences.”
Te Treasury Committee of the British Parliament had mid last month called for the regulation of the cryptocurrency sector over concerns of minimal protections offered to investors, widespread fraud reports, cybersecurity vulnerabilities of cryptocurrency exchanges and money laundering.
— Mega Crypto World (@MegaCryptoWorld) September 19, 2018
While the report lead-authored by the BBFA warns of the disastrous consequences likely to result from introducing cryptocurrency regulations, the Treasury Committee report had argued that such a move could even result in increasing liquidity in the sector. Additionally, Nicky Morgan, the chairperson of the Treasury Committee, had argued that if done right, such regulations could result in Britain becoming a global cryptocurrency hub:
“If the government decides that crypto-asset growth should be encouraged, appropriate and proportionate regulation could see the UK become a global center for this activity.”
Currently, the Financial Conduct Authority, the Bank of England and Her Majesty’s Revenue and Customs (HMRC) are jointly working on a proposal for new cryptocurrency regulations.
This is not the first time that debate on cryptocurrency regulations in the UK has drawn unfavorable opinions. Earlier this month, leading UK law firm Reynolds Porter Chamberlain raised doubts over whether the FCA has the capacity to regulate the cryptocurrency sector. Additionally, the firm’s legal experts warned that introducing such regulations was a lengthy process and would take a period of up to 24 months.
Technology startup accelerator Boost VC has announced that it is accepting applications from crypto startups to join Tribe 12, its latest accelerator program cohort. Since 2012, Boost VC has graduated several cohorts with more than 75 crypto-related projects including prominent blockchain projects like Etherscan, Aragon, and MyCrypto.
According to the announcement, which appeared in a Medium post, the company is seeking to invest in blockchain startups that provide solutions for cross chain functionality, front end blockchain solutions, crypto team building and maintenance, and general blockchain scaling.
‘Missing Puzzle Pieces’
Boost VC describes its investment focus for Tribe 12 as an attempt to fill in missing pieces in the blockchain and crypto adoption puzzle from an infrastructure point of view. While investors like Goldman Sachs continue to grab headlines with eye-catching investments in startups focused on crypto custody and trading solutions, Boost VC is taking its investment from a wider perspective, seeking out startups that can build nuts-and-bolts blockchain solutions such as cross-chain navigation interfaces and management solutions for the peculiar challenge of distributed crypto teams.
Applications are welcomed from startups interested in creating decentralised frameworks for commerce, communication and government similar to ConsenSys, but operating on other non-Ethereum blockchains. According to Boost VC, the goal is to explore studio builder models for quick iterations on bringing crypto mainstream. Boost VC is also looking for projects focused on the creation and management of crypto teams, which come with the unique and unprecedented challenge of being almost entirely remote, contractor-heavy instead of employee-based, and having the near-instant liquidity offered by crypto payments, which creates a different incentive model from traditional startups.
In addition, projects that create cross-chain interfaces outside of custody, exchange and wallet solutions are particularly prized for investment. This is because Boost VC sees such projects as essentially land grabs offering the opportunity to build a blockchain interaction utility that can be recreated across the other top 5 – 10 blockchain networks.
The company also says it is looking for the “Coinbase for other blockchains/dapps” as well as a possible solution for legal gambling that takes advantage of differing regulatory environments across jurisdictions. Country-specific custody solutions and security trading solutions are also mentioned.
An excerpt from the announcement reads:
“Regulatory arbitrage plays. We invest globally. Therefore we will look at teams using certain jurisdictions to their advantage. Areas of legal gambling. Custody designed for specific countries. Trading securities.”
Projects working on such solutions are encouraged to apply to Boost VC’s Tribe 12 accelerator batch.
A documentary film that profiles distributed ledger technology and counts an Ethereum co-founder as one of its executive producers had its theatrical release on October 26 in New York.
Written and directed by Alex Winter, Trust Machine: The Story of Blockchain, runs for 84 minutes and covers subjects ranging from the history of Bitcoin to the promising use cases of distributed ledger technology. Joseph Lubin, the co-founder of Ethereum as well as the founder of blockchain software technology firm ConsenSys, is one of the film’s executive producers.
@Trust_Machine premieres in NYC at @cinema_village , 10/26 and in LA at @Laemmle, 11/16. I'll be at select screenings.
Get your tickets now:
LA: https://t.co/SA15vdnfHL pic.twitter.com/VIRzkOQa3h
— Alex Winter (@Winter) October 24, 2018
Regarding Bitcoin’s history, the film credits the 2008 global financial crisis as the reason that triggered the mysterious Satoshi Nakamoto to develop an open, decentralized ledger for transactions. Not everything turned out perfectly, however, and the documentary laments that BTC initially became famous for its use in illicit deals on the internet and alleges that this, unfortunately, earned the flagship cryptocurrency a perception and a reputation that it is still trying to shake off.
Good for Newbies
Critics have pointed out that the doc serves as a useful primer anyone is unfamiliar with blockchain technology. As The New York Times film critic Ben Kenigsberg writes, the film serves as a solid teaching aid:
“A hodgepodge of boosterish arguments for blockchain technology, ‘Trust Machine: The Story of Blockchain,’ directed by Alex Winter (Bill of “Bill & Ted” fame), is not always a model of clarity, but it does a decent job of explaining the basic concept.”
Some of the contributions that blockchain technology can make to the world that the documentary film focuses on include combating identity theft and transforming power distribution by empowering micro-producers of power such as households who are able to generate solar power and sell the excess to the grid.
Ticket to Riches
But, for all the revolutionary potential of blockchain technology, Winter’s film concedes that what is drawing most people to cryptocurrencies and blockchain technology is the desire to strike it rich.
“Still, for most people in the world right now, the most exciting thing about blockchain is the prospect of making a fortune overnight,” notes The Hollywood Reporter. “In its closing scenes, the film’s narration acknowledges how attractive this field is to scammers and speculators.”
This is not the first documentary Alex Winter has directed focusing on cryptocurrencies and blockchain technology. Three years ago, the actor-turned-director made a 90-minute film Deep Web, which documented the arrest of Silk Road marketplace webmaster Ross Ulbricht. The film was narrated by Keanu Reeves.
Afri Schoedon, an Ethereum developer at Parity Technologies, said that the network cannot rely on Infura to process 10 billion requests per day.
Created by Michael Wuehler, an author at ConsenSys and NYC Ethereum founder, Infura is an infrastructure that allows decentralized applications (dApps) to process information on the Ethereum network without running a full node.
Some of the largest dApps and protocols including Ethereum wallet MetaMask, decentralized exchange protocol 0x, and MyCrypto rely on Infura to broadcast transactional data and smart contracts to the Ethereum mainnet.
Ethereum Has to Stop the Dependence on Infura
This week, Schoedon firmly stated that if dApps continue to rely on a third party service provider or infrastructure developer in Infura, the vision of Ethereum will “fail” in the long-term.
“If we don’t stop relying on infura, the vision of ethereum failed. If we don’t stop relying on infura, the vision of ethereum failed. Or build a strong network of thin and light clients. There is no point in having d-apps connecting through metamask to a blockchain hosted by someone else.”
The concern in regards to the influence of Infura in the node ecosystem of the blockchain is that if dApps do not run their own nodes or rely on a network of light clients, it will increase centralization in the protocol, which was structured and designed to operate as a global supercomputer.
if we don't stop relying on infura, the vision of ethereum failed
— 𝙰𝚏𝚛𝚒 𝚂𝚌𝚑𝚘𝚎𝚍𝚘𝚗 (@5chdn) October 26, 2018
In ideal blockchain ecosystem, service providers, dApps, and decentralized systems would operate their own nodes to verify information and data in a fully peer-to-peer and distributed manner. However, if node infrastructure operators like Infura are tasked by popular dApps to handle data requests on behalf of them, then the risk of centralizing the Ethereum network could increase.
The merit in the argument of Schoedon is that for dApp operators and even individual users, it is relatively easy to run a pruned node, as opposed to an archival node, for efficiency.
An archival node, often referred to as a full node, includes all of the historical transactional information on the network so that a node operator could check the history of every transaction recorded throughout the entire history of the network.
“People think that in order to have a fully verified Ethereum blockchain (aka full node), you need to run an archival Ethereum node. Running an archival node is thought to be an issue for Ethereum because an archival node currently takes up to 1.4 Terabytes (data point provided by Afri Scheoden, a developer at Parity Tech),” cryptocurrency researcher Julian Martinez wrote.
However, for dApps and the vast majority of users, it is highly unnecessary and inefficient to run an archival node. Rather, users can run a pruned node, which eliminates historical data on the Ethereum network and allow users to run a light node.
“Pruning the state trie saves tons of disk space because it is the historical state data that is creating the blockchain bloat. A pruned blockchain can take up 90 GB compared to the 1.4 Terabytes taken up by an archival node (data point provided by Afri Scheoden, a developer at Parity Tech). Although data from older state tries are deleted, all of the information necessary to recreate that state trie is still saved on your local blockchain.”
Run Individual Nodes
A simple solution to the issue of the reliance of dApps on Infura is for dApps to begin running indepent nodes. But, as Schoedon suggested, a strong network of thin and light clients could also be a possibility to reduce the dependence on centralized infrastructure operators.
I remember reading Satoshi Nakamoto’s bitcoin white paper for the first time a few weeks after it was released. I also remember the phrase that really grabbed my attention:
“We propose a solution to the double-spending problem using a peer-to-peer distributed timestamp server to generate computational proof of the chronological order of transactions…”
Of course, at the moment, I thought, “Whoa, this can’t be true. How can he possibly have a solution to the double-spend problem that is peer to peer?”
Up until Satoshi’s innovation, the double-spend was the Achilles’ heel of digital currency transactions – it simply wasn’t possible for a digital system to prove two, or more, different people didn’t spend the same digital money without the use of an intermediary. Despite advances in payment tech and services (the forebears of bitcoin already existed in technologies like DigiCash), all internet-based transactions still required a trusted third-party such as a bank, government or a credit card company.
Trust is a component of traditional payment schemes such as credit cards, ACH or bank wires, but involving third-parties into payments adds friction at the cost of time and money. These payment schemes all address the problem that fiat money is a paper-based bearer instrument that can only be transferred peer-to-peer in person, in the physical world. That assumes that paper money cannot be copied which, of course, it can be.
Solving the double-spend problem in the digital world makes near real-time commerce possible across the entire planet without regard to individual banking access, currency denominations or geographical location.
I think a large part of bitcoin’s success is that it was the right idea at the right time. Between the financial crisis of 2008 and the fallout and subsequent crackdown following 9/11, banking regulations and best practices changed dramatically.
The result was that banks were becoming more and more inaccessible for those “stuck” in the cash economy — money transfer, checking and debit services, and obtaining credit became harder and more costly. This trend definitely impacted consumers, but it also created a higher hurdle for retail banking and financial innovation.
At the time of the bitcoin white paper’s publication, I was building a company in the global mobile banking space. One of the biggest obstacles for growth was managing for all of the needs of different banking and regulatory requirements. Those requirements turned into constraints that proved untenable at scale.
So, in that context, solving the double-spend problem opened a massive technological frontier that allowed for experimentation and the design and deployment of a new financial sector. The true beauty of bitcoin is that it’s based on open-source computer code and it’s not owned or controlled by anyone. It is globally accessible in that the only requirement for participation in the new economy is an internet connected device.
Right in the bitcoin genesis block, Satoshi warns of bank bailouts. History leaves clues and those who don’t understand history are doomed to repeat it.
A new economy
But, solving the double-spend problem wasn’t just a milestone achievement in computer science. We are only 10 years in, but already we can see the far-reaching results of what a permissionless, distributed economy can look like – and what the impacts might be.
At this point, it’s clear that bitcoin is not just a new feature set of the existing economy, but that it is fueling its own economy that will be built on different principles then what came before.
By eliminating the need for a centralized middle-man, bitcoin created the foundation for an entirely new banking infrastructure. By design, the infrastructure is incredibly secure. It was created as a protocol that allows other layers, apps, and services to be built on top of it.
And that’s what we are seeing now the emergence of bitcoin service providers. Think about Lightning, Abra and LocalBitcoins as real examples.
Today, companies are building bitcoin services that range from exchanges, that serve as basic on and off ramps for transfers of value from legacy systems to crypto-based systems, and back again. New companies are using bitcoin to rethink credit and lending, while others are using the technology to make creating and securing a digital identity more straightforward.
It’s exciting to think about all that has been made possible — and will be made possible thanks to bitcoin. Bitcoin gives us the ability to be build a future based on sound and programmable money.
In the future, bitcoin will make all kinds of financial innovation possible. At Abra, we are particularly interested in making money borderless (the company was founded to address this issue of near-free and private person-to-person money transfers).
We are also interested in how bitcoin will enable consumer asset financing in the form of pay-as-you-go style arrangements. Think of it as a hardware as a service model, which will not only be massive for technology adoption in developing economies but also create opportunities to tackle issues related to poverty and global public health.
We also foresee a world of micro-investing in stocks, bonds, mutual funds, etc., all made possible by bitcoin’s programmable money attributes. Abra’s synthetic assets are bitcoin collateralized contracts that make this type of micro-investing a reality today. Our goal is to democratize access to investment opportunities on a global scale.
The programmable facets of bitcoin make these ideas possible, and the greatest part is that the consumer or investor won’t even need to know that they are utilizing bitcoin. Just like today’s internet user doesn’t understand the ins and outs of TCP/IP when they watch a Netflix or Youtube video, the bitcoin users’ experience will someday be invisible and seamless.
Solving the double-spend problem helped move the internet one step closer to its initial promise of an open information network. By eliminating the need for trusted third-parties, bitcoin has become the foundation for the ultimate economic freedom.
“We haven’t had an opportunity like this in the past 500 years.”
That’s Amir Taaki speaking on a closing panel at the Web3 Summit in Berlin Wednesday, and his statement was greeted with breathless applause by the audience. An early bitcoin developer, Taaki addressed a crowd of more than a thousand coders that had gathered to discuss “Web 3.0” – or the restructuring of internet infrastructures with an emphasis on decentralization.
“Maybe the technological proposals that people are talking about are not very well grounded, but I do see a huge amount of young, idealistic people with a lot of capital,” Taaki said, adding:
“If we can form a vision and direct that energy, it could be an extremely powerful force.”
A concept which originated from ethereum co-founder and Parity Technologies founder Gavin Wood, Web 3.0 has evolved into a tech base that encompasses a wide range of decentralized technologies, ethereum and beyond.
Web 3.0 is intended to replace the existing online infrastructure with software that is decentralized from the start. To this end, much of the discussion over the three-day conference echoed Taaki’s sentiment – that with the right combination of technology and vision, Web 3.0 can usher in a new era of digital emancipation.
And while that may sound idealistic – several attendees remarked that the event seemed to tip into naïveté at times – it was met with a wave of technological advances that reinforced this positivity.
“It’s different this time around, and we have a chance to use these tools in a way that empowers and protects people,” Patrick Nielsen, CTO of Web 3.0 startup Clovyr, said. “But it won’t build itself, and just because the tools exist does not mean it’s going to get used.”
Ethereum developer Lane Rettig echoed this point in an interview.
According to him, the Web 3.0 community is at a crucial turning point. Either it succumbs to the classic “rich get richer” dynamics or the community takes “the uncharted path” of permissionless innovation.
“But it’s not something we get for free, and it is not something we get by default,” Rettig contended.
What’s more, such a vision requires careful coordination and an awareness of history, such as the failure of former technological movements that got co-opted by corporates. To this end, several moments during the conference reflected this idea in more cautionary terms.
For instance, ethereum developer Vlad Zamfir took the stage on Monday, saying: “Expect every layer to be captured. Defend every layer.”
The ‘protocol commons’
During the event on Monday, Harry Halpin, an academic and a former chairperson of the World Wide Web Consortium (W3C), gave some concrete examples of the risks currently facing the nascent industry.
According to Haplin, decentralized, open-source technologies have a historical tendency to fall prey to capture by corporations that implement the tech – thus further centralizing the Web.
Clovyr’s Nielson seconded that, explaining that strategies – such as the so-called “embrace and extinguish” method – exist within corporations to allow them to take open-source software and reimplement it within their own systems (without so much as a thank you). And the tech, at that juncture, has been abstracted from its guiding principles and even be used for malignant ends, he said.
Zamfir specifically directed his warning about this process toward blockchain governance – where an economic elite can buy up crypto token ownership and divert the outcomes of a project.
According to Halpin, Web 2.0 technology underwent a corporate capture of its own, and the leaders of the projects “lacked the backbone to push back and fight for users rights.” For example, Halpin drew attention to digital rights management (DRM) – a heavily criticized copyright-enforcing technology that led him to quit the W3C following its implementation as a Web standard.
To protect against such eventualities, Halpin proposed the notion of a “protocol commons,” an overarching blockchain governance body for “certain things which are in everyone’s best interest.”
This could include the development of Web 3.0 standards, as well as protection against software patents, Halpin said, adding that such governing bodies should avoid deifying specific people, a process that can create single points of failure for blockchain projects.
As Halpin argued:
“We need to remove charismatic leaders, they are good at the beginning but they will become corrupt, or they will just go crazy, and either way it has the same impact.”
A surveillance machine
Privacy was another significant theme discussed during the summit. While much in the way of privacy tooling is in development within the cryptocurrency community, there are still plenty of unanswered questions.
Halpin called privacy protection “the largest technological task facing the Web 3.0 community.”
He continued: “Peer-to-peer and blockchain technologies are by design very hostile to privacy. There needs to be a lot of work.”
It was a notable trend at the summit, with many, like Halpin, warning that the use of peer-to-peer and blockchain technologies could result in a new surveillance machine – one that is even more threatening than the current Web as it exists today.
And that’s because not only do technologies like ethereum reveal transactional data, but they also expose subtler computational activity which can be a concern, especially as it relates to smart contracts that deal with sensitive tasks like voting, location data, social media and identity.
As Zamfir explained:
“Blockchain is a surveillance wet dream.”
Still, several talks touched on the privacy question, sparking a sense of renewed interest in developing the tools necessary to protect users and even developer information.
Advancements in zero-knowledge cryptography, ring signatures, mixnets, privacy-enforcing contracts and messaging were discussed, and even lower level cryptography that enforces privacy as a default, instead of needing end users to adopt.
One such project is Centrifuge, a financial supply chain startup that performs transactions apart from the ethereum blockchain in order to preserve their privacy, while still communicating with the blockchain by way of non-fungible tokens (NFTs).
“From a technical point of view, there’s a huge improvement in terms of the technologies we can use to preserve privacy,” CTO of Centrifuge Lucas Vogelsang said.
He added that the implementations of such technologies are “just a matter of time.”
All about freedom
Still, the mood at the conference was generally optimistic. For example, several participants pointed to innovations particular to the blockchain ecosystem that could help overcome dystopian outcomes.
Zamfir, for instance, said that stable blockchain governance can be achieved using systems that enforce distributed control, incentive mechanisms and general fault tolerance.
Halpin echoed this point by stating that Web 3.0’s main protection against the failures of former software movements is the novel economic models underpinning much of the industry.
“Blockchain technologies have a fighting chance because they have an economic model built into how you use and work on the technology,” he stated.
These economic models can help avoid outcomes like the onslaught of corporations that occurred in Web 2.0 and protect against the economic model underlying most of the internet – one that relies on user data and tracking as a primary business model.
“You can see a new route of innovation on the Web that is not based on mass surveillance, that is based on decentralization, the respect for human life and new economic models based on payments.”
Speaking on the panel, Taaki reminded the audience of the importance of having a fixed ideological position to guide the Web 3.0 movement.
And while there are subtle disagreements about what the term “Web 3.0” actually means, Zamfir said in an interview that ideology can be boiled down to “emancipation.”
“It’s not clear that it is going to be good for people’s privacy, it’s not clear that it gives people control, but it certainly gives people a lot of freedom,” Zamfir told.
In a similar vein, according to Halpin, while we won’t know for years as the technology and the industry around it unfolds, but it’s worth the risk, given the underlying promise – freedom from corporate control – the technology stands for.
The Financial Services and Markets Authority (FSMA) has added 21 new websites of suspected cryptocurrency scams to its blacklist.
Belgium’s financial regulator published the list on its official website, bringing their tally of suspected crypto scams in the country to 99. The agency found that despite their prior warnings concerning the risks associated with crypto investments, Belgium is witnessing a growth in online fraud cases. Among the blacklisted companies, many are offering financial services without complying with the Belgian financial legislation. Moreover, the listed firms are also involved in attracting victims to their allegedly fake investment schemes.
The FSMA blacklist also names websites that reach out to the victims of earlier crypto frauds. These persons running these websites pose themselves as financial advisors, lawyers, and accountants. They promise victims that they would arrange compensation or to recover their losses in exchange for a fee. The financial contribution by the victim, however, does not result into anything substantial. The FSMA refer these scam websites as ‘Recovery Rooms.’
Outside Belgium Jurisdiction
The blacklisted firms cannot be charged in Belgium for falling outside the jurisdiction of FSMA, the details revealed. Agence Des Analystes Financiers, for instance, is one of the denounced companies in the list but is reportedly based in Germany. Another firm BK-COIN appears to have offices in cities all across the world, including London, Tokyo, Meyrin, and Paris, the validity of which remains unconfirmed.
Similarly, firms mentioned in the FSMA blacklist are appearing to operate from all around the globe but Belgium.
Nevertheless, the agency has requested investors always to verify the companies with the concerned regulatory agencies. The advisory specified that FSMA couldn’t charge websites active in the cryptocurrency space in the absence of legal supervision, but an alert could still minimize the risks.
“Be wary as well of companies that claim to hold authorizations from supervisory authorities and refer you to such authorizations,” the regulator wrote. “This is a very frequently used technique. However, these are often cases of identity theft. Feel free to ask the FSMA to confirm the information you have received.”
Identifying a Swindler
The FSMA advisory laid out the typical characteristics of an online crypto scam. The regulator said that swindlers usually contact victims by phone in a process called cold calling. They try to offer them a variety of investment options claiming they could yield maximum profits in a minimum span. They attempt to influence a victim into purchasing security tokens of a newly-launched blockchain product or participate in a multi-marketing scheme by investing cryptocurrencies. Regardless of the type of marketing pitch, the promises of a scammer include:
- high monthly or annual returns
- high liquidity (users can withdraw funds anytime they want)
- investments are protected by real-world collateral (it won’t fall below the value at which investments were made, even during a market crash)
“All these promises are worthless, however: if an offer is fraudulent, the promises that accompany it are equally so,” the FSMA added.
Readers can find the FSMA crypto blacklist here.
Another weekend of inactivity in crypto land; Dogecoin and Electroneum moving, Revain diving.
More of the same is about the only thing that can be said about crypto markets as we enter the weekend. Another week with virtually no movement means that total market capitalization is still around $210 billion where is has been for the past fortnight.
Bitcoin remains in a consolidating channel just below $6,500. It has not moved out of this range since the October 15 spike to $6,700 which saw a rapid bounce off strong resistance. The crypto sphere is still waiting for something to happen in the Bitcoin camp. Until then everything remains flat including Ethereum which is still stuck at around $205.
The altcoins are mixed today about half and half and as has been the case all week, gains or losses are marginal for most of them. Nothing has moved more than a percent in either direction over the past 24 hours in the top ten.
A little more movement has come further down the chart in the top twenty with Tron showing the biggest gain in this group. TRX is up 2.7% on the day to reach $0.0236. Zcash and VeChain have dropped back 2% each but nothing else notable is happening.
Just outside the top twenty is Dogecoin making a run today with a 12% pump. DOGE spiked a couple of hours ago and is now at 65 satoshis ($0.0042). There is not much on the Dogecoin twitter feed aside from the usual bunch of doggie memes indicating that a dump is likely to follow for this clown of crypto.
Today’s big pump is coming from Electroneum which has surged 27% during the Asian trading session this morning. A partnership with Turkey’s top crypto exchange which will provide fiat pairs for ETN has driven momentum. At the messy end of the table is Revain getting trounced 14% and leading the losers in the top one hundred.
There has still been no change in total crypto market capitalization which remains at $209 billion. It has ranged between $212 and $207 billion this week and has not been out of this channel since mid-October when markets jumped from $200 billion. Bitcoin dominance has also not moved and remains at 53.7%.
FOMO Moments is a section that takes a daily look at the top 20 altcoins during the current trading session and analyses the best performing ones, looking for trends and possible fundamentals.
Singapore-based blockchain platform VeChain Foundation, U.S. blockchain startup CREAM, and the national investment partner of the Republic of Cyprus, Invest Cyprus, have signed a Memorandum of Understanding (MoU), per a press release published Oct. 26. The MoU is focused on establishing a framework in the field of blockchain technologies and related use cases.
Per the MoU, the parties will work on a number of national level investment strategies, which involve blockchain-powered economies and promote blockchain technology, particularly in financial services. The agreement also aims to inform government policy making in the blockchain industry, in addition to facilitating economic development in Cyprus.
The suggested reforms will purportedly comply with regulatory procedures such as Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements, E.U. law, and other regulations.
In order to complete the designated objectives, VeChain and CREAM will reportedly found a joint venture in Cyprus, that will assist in the development and implementation of blockchain solutions. Michalis P. Michael, Chairman of Invest Cyprus, said that Invest Cyprus sees blockchain “as both transformational and fiscally restorative at the infrastructure level.” Michel added:
“We are investing in the development of the fintech, blockchain sector and we plan to be at the forefront so that we can facilitate investments and economic development in Cyprus and the region.”
In November last year, the Cyprus Securities and Exchange Commission (CySEC) announced its intention to integrate blockchain in its electronic payment system through a partnership with the Blockchain Technology for Algorithmic Regulation and Compliance Association (BARAC).
With the launch of the blockchain-based electronic payment system, consumers are expected to reap several benefits like faster transactions, reduced fees and improved payment transparency.
This summer, VeChain and global logistics provider DB Schenker jointly developed a blockchain-based supplier evaluation system to score DB Schenker’s third-party logistics partners in China. The system will rate partners based on collected data for services such as packaging, transportation, and the quality of goods.
Cybersecurity company Recorded Future has released a lengthy expose claiming that North Korea uses cryptocurrency to skirt U.S.-imposed economic sanctions alongside a shady network of collaborators and enablers in Singapore.
The company claims that in addition to mining coins like bitcoin and monero, North Korean leaders have also been involved in promoting cryptocurrency scams that have bilked investors around the world of millions of dollars.
North Korea’s Technology-Backed Evasion of Sanctions
North Korea’s use of cutting edge technology to get around the effects of economic sanctions imposed on Kim Jong Un’s regime is well documented. In September, Washington-based financial experts Lourdes Miranda and Ross Delston accused North Korea of using crypto mining and coin scams as means of generating revenue. Notorious North Korean hacker group called “Lazarus” is responsible for the theft of more than $571 million in cryptocurrency.
The Recorded Future report claims that North Korean leaders mine bitcoin and monero at a relatively small scale, with the bulk of their efforts in the cryptocurrency space from the first quarter of 2018 to date now focused on exploiting growing worldwide crypto awareness for the purpose of launching investment scams. Two coins in particular are identified as North Korean scam projects, namely HOLD coin and Marine Chain.
HOLD Coin, also previously known as Interstellar, HUZU and Stellar (not to be confused with XLM) used a fraudulent staking scheme to collect investor money, having been variously listed and delisted across a number of exchanges before disappearing with all funds.
Marine Chain on the other hand, was part of a more sophisticated scam that runs right to the heart of the North Korean government’s ability to consistently diminish the effectiveness of UN-imposed economic sanctions that would ordinarily cripple the regime. Billed as a tokenisation framework for maritime vessels, an investigation by Recorded Future into Marine Chain revealed a complex network linked to Singapore with potentially far-reaching implications for cybersecurity in Southeast Asia.
The Singaporean Connection
According to information gleaned from LinkedIn, an advisor called HyoMong Choi and the CEO of Marine Chain, Captain Jonathan Foong Kah Keong are the key figres in Marince Chain’s fradulent activities. Capt. Foong reportedly has connections to Singaporean companies that facilitate North Korean activities designed to circumvent U.N. sanctions. Activities these companies have been involved in include manipulating flag registries for three countries to give prohibited North Korean vessels the ability to sail under flags of convenience.
This means that more than just being a run-of-the-mill cryptocurrency scammer, Capt. Foong is actually part of the key strategy employed by the North Korean regime to skirt sanctions that should ordinarily make it the most isolated regime on earth, and keep itself in power. The appearance of Capt. Foong in the context of North Korean crypto scams is significant of a wider pivot in the regime’s criminal activities as it looks to harness the possibilities presented by a new wave of technology including blockchain technology.
A 23-year old Australian woman has been arrested over stealing 100,000 XRP. Police forces detained the individual in her parent’s house in Sydney after she allegedly raided a 56-year-old crypto adopter’s wallet and transferred more than $46,000 worth in Ripple to a Chinese exchange.
According to Australian newspaper Brisbane Times, the woman hacked the victim’s email account in January of this year and set up a two-step verification security feature by changing the password and verifying it with her personal mobile number. The 23-year-old individual then used the victim’s email address to obtain access to their cryptocurrency wallet. She then transferred 100,000 XRP to an account in China, and converted them in Bitcoin. By the time the 56-year-old victim restored access to the account, the funds had been drained.
Officers from a unit called Strike Force Rostrevor, seized computer hardware, storage devices and mobile phones during the search of the female perpetrator’s residence.
In a video report released by the Brisbane Times, New South Wales Police Detective Superintendent Arthur Katsianis announced that the case marks the first cryptotheft-related arrest in Australia. However, according to the detective, the authorities expect more cases to follow.
“It’s a very significant crime and it’s the first that we know of its type in Australia where an individual has actually been arrested and charged for the technology-enabled theft of cryptocurrency,” said Katsianis. “What I can tell you is that while this might be considered an exception, in the next few years this will be the norm.”
New Tools for Crypto Criminals
The case highlights a recent trend of mobile phone-related crypto crimes. Cybercriminals have turned to methods such as email and sim hijacking to obtain access to victim’s crypto wallets and steal digital assets. In this case, the perpetrator allegedly reset the victim’s wallet password details, before adding her own mobile number.
New South Wales police released a statement, urging cryptocurrency adopters and users to enable 2-factor authentication methods on their devices and crypto wallets to reduce the likelihood of having their wallets compromised. While authorities are hopeful they will be able to restore the missing funds, they stressed digital assets are ‘encrypted, which makes them very hard to trace’.
“This is where the criminal environment will expand,” said Katsianis. “Particularly for people in the community who are trying to invest their money.”
Belgium’s Financial Services and Markets Authority has updated the list of websites it says are cryptocurrency trading platforms showing signs of fraud. Twenty-one websites have been added to the existing list, bringing the total to 99 blacklisted sites.
21 New Suspect Sites
The Belgian Financial Services and Markets Authority (FSMA) made two crypto-related announcements on Friday. In addition to a new warning against cryptocurrency fraud, the regulator revealed:
It has also updated the list of cryptocurrency trading platforms for which it has detected indications of fraud, adding 21 new suspect sites. This list now comprises a total of 99 websites.
The agency elaborated that “this list is based solely on observations made by the FSMA on the basis of reports received from consumers. It, therefore, does not include all players that may be unlawfully active in this sector.”
The list of 99 websites includes the 21 newly added sites: afaeu.com, bk-coin.com, capital-traders.com, cryptoallday.com, cryptonetto.com, cryptosafe.tech, dca-finance.com, elos-patrimoine.com, finances-markets.com, iminage.com, investissement-crypto.com, kryptonexlabs.com, kryptowize.com, london-exchange.net, lacentraledescryptomonnaies.com, parel-invest.com, positiva-ad.com, save-coins.com, tradabank.com, trade-my-bitcoin.net, and vip-brokers.com.
The FSMA further emphasized that “there is no current supervision of online platforms active in the cryptocurrency sector.”
FSMA’s Latest Warning
In its warning against cryptocurrency fraud, the FSMA noted that the form of fraud varies such as involving “[the] purchase of cryptocurrencies, savings accounts based on cryptocurrencies, management agreements, ICOs, etc,” adding:
In spite of prior warnings by the FSMA, cryptocurrency fraud continues to trap ever more victims in Belgium.
The agency asserted that these fraudulent schemes make similar promises. They often involve “a very high rate of return,” the ease of withdrawing money, and “the funds deposited are guaranteed (often at 100%), which means that even if the market collapses, you will recover at least your initial investment, which makes this a very safe type of investment,” the regulator wrote. “All these promises are worthless, however: if an offer is fraudulent, the promises that accompany it are equally so.”
In March, the Brussels Times reported that Belgian tax authorities had started hunting for cryptocurrency investors. “Anyone speculating on the cryptocurrency market must pay tax of 33% on gains made, and declare these within the section ‘miscellaneous income’ on their tax return,” the publication detailed. However, the tax authorities are facing challenges since “the management of cryptocurrency assets happens through impenetrable foreign trading platforms,” the news outlet conveyed.
The number of crypto ATMs in Belgium is growing.
One of the oldest mantras in Bitcoin trading is: “never leave your coins on the exchange.” This wisdom is borne of the experience of Mt. Gox traders who lost many millions of dollars in Bitcoin over four years ago.
Yet, better than never leaving your coins on an exchange is never placing them in the custody of the exchange in the first place. For the most part, exchanges have not conveniently allowed traders to do this. Hodl Hodl is a rarity in this respect and it has raised the bar again by enabling 2-of-3 multi-signature contracts in trades through its platform. The exchange had previously offered, and continues to offer, 2-of-2 contracts.
Buyers Can Now Trade With More Confidence
2-of-2 multisignature contracts offered by Hodl Hodl only require the signature of the seller and the exchange. The new contract type offers the buyer more leverage in trading and disputes. An example dispute might be where a given rate was agreed upon but the seller is attempting to back out.
What this means is that each party must consent to the movement of the coins, where previously there might have been a possible attack vector or possibility to scam when coins were still in motion. In the words of the exchange itself:
In a regular 2 out of 3 contract, where everything goes well, buyer’s key is not needed — it only comes into play if the contract was disputed, and Hodl Hodl administrator resolved it in favor of buyer. In this case, buyer is able to sign a release transaction with his key and receive the funds without seller’s participation. This is how the 2 out of 3 contract type works.
Smart Contracts Are More Than Just A Buzzword
First dreamed up by suspected Satoshi Nick Szabo as early as 1994, smart contracts are one more new age technology brought about by the Blockchain revolution, enabling everything from secure subscriptions to estate bequests. Programmable smart contracts are at the heart of the Ethereum decentralized application ecosystem, among others. They allow for fine-tuning of agreements and are likely to be at the heart of law and taxation in the near to mid-future. Where traditional contracts require a vast legal exercise to revoke or even enforce, smart contracts can have automatic impositions of penalties or revocation.
More than just money, smart contracts present exciting opportunities in computing, government, business, and beyond. Combined with the transparency of a blockchain, such contracts are on track to revolutionize the way humans do things.
The race to build the best public blockchain will be won by those that would scale in line with volume. On a Sunday, a blockchain project realistically did it, though for 24 hours.
Waves Platform, comprising of a digital ledger project and decentralized exchange (DEX), processed 6.1 million real-time transactions in a stress test. As it found, the network faced no disruptions or delays as the test intensified. None of the transactions on its system – undertaken by users for DEX orders, transfers, token creation, etc. – experienced any slowdown, either.
The Waves blockchain, according to data provided by PYWAVES, recorded a total of 108,741 transactions. Among them, 60,933 were Mass Transfers which, per Waves blog post, are specialized transactions that can hold 100 transfer at once.
“A total of 6,141,108 transfers was processed by the network, with the blockchain supporting hundreds of transactions per second at peak times,” the post claimed.
The platform euphorically claimed that it was the highest number of transactions ever processed by any public blockchain.
Several blockchain projects in the crypto space are attempting to find alternatives to Bitcoin’s slow transaction confirmation periods. Ethereum was posed as a solution. But, it faced the same problem CryptoKitties – a decentralized application launched on Ethereum’s blockchain – slowed down transactions on the network. While Bitcoin has opted for third-party solutions like Lightning Network to handle the volume [temporarily], Ethereum is following a test-and-implement approach by taking in answers from its community developers.
Waves, to achieve a similar goal, have implemented a tech called Waves NG that helps to scale the Waves Network by selecting miners in advance, thus minimizing latency and maximizing throughput. According to Waves’ CEO and co-founder Sasha Ivanov, the protocol’s deployment on their blockchain helped them process the record transactions.
“Bitcoin processes just a few transactions per second,” he said. “Ethereum’s capacity is into double-digit tps, and a handful of other blockchains have improved on this incrementally in various ways. WAVES has implemented tech that enables a step-change in transaction volumes — not just in the lab, but in the real world, on MainNet, as these figures prove beyond doubt.”
The Waves post noted that other blockchain projects had not exceeded more than 2 million transactions per day. However, a tweet from Ivanov admitted that EOS, a semi-decentralized blockchain project, had in fact executed 5 million transactions within a 24-hour period.
EOS had 5.5 mil at most.
— Sasha Ivanov (@sasha35625) October 23, 2018
A commentator also posted a chart from Blocktivity that suggested Waves was behind five blockchain projects concerning transaction volume. The chart later earned the “bogus” status from one of the Waves followers.
The US regulatory body for state banking has filed a lawsuit against the federal government for granting bank charters to fintech companies. The complaint calls into question the leniency of fintech “sandbox” charters.
The Office of the Comptroller of the Currency (OCC), an arm of the US Department of the Treasury, has awarded these special charters to many blockchain- and cryptocurrency-centric companies. The body states that the suit is an effort to protect consumers from “predatory actors.” Though the CSBS doesn’t say so, these types of charters cut into traditional banks’ bottom line and potentially attract new customers away.
“Common sense and the law tell us that a nonbank is not a bank. Thus, CSBS is calling on the courts to stop the unlawful, unwarranted expansion of powers by the OCC,” John Ryan, CSBS president and CEO, said.
Making a level playing field or strong-arming competition?
The CSBS has attacked the charter since the US Treasury first proposed it in December 2016. Additionally, the CSBS filed a suit over the proposed draft for guidelines for fintech charts in April. The latest suit filed today follows on the heels that the OCC announced that they would be accepting fintech charter applications in July under the new special guidelines.
Ryan invokes dramatic parallels to the crises that were spurred by predatory banking and lending:
“Lest we forget, in the early 2000s the OCC enabled national banks to ignore state predatory lending laws, a move that contributed to the U.S. financial crisis and the largest number of home foreclosures since the Great Depression. History cannot be allowed to repeat itself.”
However, beneath this, it is clear that CSBS feels that the playing field is no longer level with the special charter. On the same token, however, entrenched corporations have a long history of using regulations to keep new players out, especially when it comes to disruptive technologies like blockchain. Blockchain technology has the potential to remove a lot of revenue from fees that banks extract from customers, especially when it comes to international payments. Large banks themselves still engage in predatory lending despite catastrophic market events like the dotcom bubble and the Great Recession, as the OCC’s own filings show.
Still, digital assets present a problem for regulators since they have a variety of uses that straddle many different categories. However, the OCC doesn’t seem to be slowing down its stance to welcome fintech banking applications. Coinbase, for instance, received approval to operate as an”Independent Qualified Custodian.” It appears more likely that the OCC is on pace to approving more applications, rather than withdrawing from them. From the drafting of guidelines to public comment to accepting new applications, the charter approvals are the final culmination of a push to grant fintech companies a role in banking.
The Information Reporting Program Advisory Committee is a body which was established before the Internet was a major consumer network and is a result of federal government reorganization and, importantly, efforts to modernize and improve the IRS brought about by the Omnibus Budget Reconciliation Act of 1989. The committee periodically suggests actions the IRS needs to take in order to improve its operations, specifically relating to how the IRS gathers information about taxpayers.
This year’s public report is of interest to cryptocurrency advocates and participants because it specifically directs the IRS that it needs to be clearer on how it deals with Bitcoin and other cryptocurrencies.
In the past few years, with the innovative rise of technology throughout the financial sector, there has also been a rise in the popularity of investment in cryptocurrency. However, with the popularity of cryptocurency, there has also been an equal rise in questions as to the applicable tax consequences that apply to it. While we acknowledge and thank the IRS for publishing Notice 2014-21, which provides that virtual currency is treated as property for U. S. federal tax purposes, many industry and tax practitioners still question other tax consequences of cryptocurrency transactions. […]
Therefore, IRPAC recommends that the IRS issue further guidance on the tax consequences of cryptocurrency transactions.
The tax situation regarding cryptocurrencies has long been a subject of interest and debate in the crypto community. Unclear guidelines and the occasional prosecution of unregulated exchanges have made it difficult for users to know quite how to act, and as a result few are willing to admit they have cryptos.
One problem is that cryptocurrencies and their related service providers are overseen by multiple agencies. Everyone from FinCEN, the IRS, the Treasury, other federal regulatory bodies, and state agencies have a say in how people legally use the currency.
Coinbase Case Used As Example
In the more detailed recommendation regarding clarification of crypto regulations at the IRS, the Committee used United States v. Coinbase Inc, a case which decided that Coinbase has no legal remedy in providing information to the IRS about transactions over $20,000.
The Committee writes:
A good illustration of the difficulties of tax enforcement in this area may be found in a recent case. […] During 2013 through 2015, Coinbase maintained over 4.9 million wallets in 190 countries with 3.2 million customers served and $2.5 billion exchanged. The Coinbase summons initially sought “information regarding United States persons who, at any time during the period January 1, 2013 through December 31, 2015, conducted transactions in a convertible currency as define in IRS Notice 2014-21.” That request was later narrowed to Coinbase users who “bought, sold, sent or received at least $20,000” worth of cryptocurrency in a year.
The Committee believes that Americans would by and large be more open to reporting their crypto holdings and proceeds if they had more clarity in the consequences of so doing.They believe that as a result of the Coinbase summons and the lack of clarity, people will be more likely to use offshore exchanges in order to protect their assets.
Many, if not most, taxpayers will report these activities correctly if they are able to determine the implications of their cryptocurrency activities. Some taxpayers will be tempted to do otherwise, however because anonymity is inherent in the structure of the blockchain activities. In light of Coinbase,these taxpayers are likely to use exchanges outside the jurisdiction of the US.
It is important to note that the IRS is not required to follow the guidance of the IRPAC, but historically it has used the recommendations to modernize the way it handles its business. Those who wish to transact in cryptocurrencies legally can only hope that IRS heeds the advice of the IRPAC and implements clearer regulations in the coming months.
Recent news shows Delaware playing an important role in the capture of British hacker Grant West. U.K. Authorities caught West last year and recovered $700,000 worth of Bitcoin.
According to a report by Delawareonline, undercover U.K. officials caught West last year while he was traveling by train. West was convicted of fraud, in addition to other crimes.
Catching West “was the first time London Metropolitan Police arrested a cybercriminal” reports Delawarenewsonline. This case dates back to activity in 2015, with West hacking over 100 different companies.
The same report also uncovers the U.S. Secret Service of Delaware having a part in West’s capture. Roughly one year ago, Delaware helped British police uncover some of West’s stolen capital, finding an account with close to $217,000,000 of value in Bitcoin.
“Delaware for years has been the site of large numbers of government seizures of dollars from the bank accounts of suspected criminals because so many banks keep their central servers in the First State. Now, that has expanded to include bitcoin and other cryptocurrency”, reported Delawareonline.
Grant West – A Formidable Opponent
West – aka Courvoisier, hacked “websites of companies such as Sainsbury’s, Uber, Ladbrokes and others. After gaining access into the companies’ websites, he would then obtain personal information of customers for companies”.
West stole the private data of these companies’ clients, via phishing emails, and then proceeded to sell that information online.
A separate report by Delawareonline explains that West was able to cover his tracks by storing his stolen funds in Bitcoin and spreading them out into multiple wallets. During West’s capture, authorities were also able to apprehend his computer, which contained many of the pertinent passwords and information needed to access the stolen funds.
West had stolen private information from close to 165,000 different people, including specifics from 63,000 different payment cards, detailed one BBC report.
One of West’s most notable scams were his phishing emails, disguised as emails from the popular online food service Just Eat. West’s efforts were so vast, that the judge on the case described West as “a one man cyber crime wave” according to BBC. West’s efforts led him to accrue the equivalent of over $2 million in cryptocurrency.
West was given 10 years and eight months in jail for his criminal activities, as stated by computing.co.uk.
The public continues to see repeated news of criminals apprehended in the cryptocurrency space this year. Chinese police arrested hackers guilty of $87 million in stolen crypto funds, stated by an August report . July also saw reporting on Russian agents hacking emails, in hopes of Bitcoin keeping them anonymous.
Zcash’s core differentiator, shielded transactions, are computationally heavy – so much so that most users and exchanges can’t support it.
Heralded as a privacy breakthrough in the crypto community, shielded transactions run a type of cryptography named zk-snarks in order to obscure transaction data. But a new upgrade, predicted to activate on October 29, is being touted as a significant improvement of the usability of the protocol overall, but specifically for the use of these privacy-enabling transactions.
Dubbed Sapling, the hard fork upgrade has been the primary focus of the Zcash Company, the for-profit responsible for developing on the cryptocurrency, since its launch in 2016.
Due to the technical changes included in Sapling, exchanges and wallets will be more readily able to accept shielded transactions. Light and mobile wallets will also be a possibility – meaning that users can send anonymized transactions straight from their mobile devices.
Speaking to the gains, CTO of the Zcash Company Nathan Wilcox, told : “The Sapling protocol will allow shielded transfers to be completed with about 100 times less memory and probably six or more times faster.”
It’s a notable step given currently, shielded transactions are only possible for users running a full node. And with the upgrade, the team at the Zcash Company hopes it can ultimately remove transparent transactions, the non-private zcash transactions that can be damaging to zcash anonymity when used together with shielded transactions.
Eventually, this will usher in an era of “privacy-by-default,” according to developers.
“We hope to see a migration toward shielded Sapling adoption, and as that migration continues we hope to transition to privacy-by-default when the time is right,” Wilcox said.
Continuing, Wilcox said:
“All [Sapling] is doing improving the performance and the security. Who wouldn’t want that?”
Light and diversified
Saying zcash without the Sapling code changes “is just too inefficient and too cumbersome,” Wilcox said that the ability to support light clients will be huge for the cryptocurrency.
Light clients are those that don’t store the full data from the blockchain but still have the assurance of being secure. These are typically clients working on a mobile device, which doesn’t have as much storage space or computing power as laptop or desktop computers.
Still, these clients “won’t just appear during the activation day,” Wilcox said.
Instead, this will require some development work. For example, if not coded carefully, light clients can reveal transaction information to its wallet host.
Describing that as “dangerous,” Wilcox said the Zcash Company is working on a proof-of-concept Sapling wallet that demonstrates how the code can be trustless.
“Our goal is to make a light wallet that has privacy protections even against a service provider,” he told. “The goal is for us to design a whole [user experience] all around Sapling specifically and make sure that we can have the usability and the privacy work really well together.”
This wallet though might not be released to end users, but instead only serve as a guide for third-party implementations by developers.
Another feature Sapling includes that will encourage more use of shielded transactions is so-called “diversified addresses,” which make it easier for exchanges to support more users utilizing the transaction type. Simply put, diversified addresses allow exchanges to issue multiple addresses for the same wallet.
In the future, the upgrade may have positive implications for privacy, Wilcox said, as wallets may deploy the feature to allow users to generate multiple addresses for the same account.
“It’s the same amount of work [as one wallet], but the exchange will be supporting a million users while doing that,” he said.
Finally, Sapling will introduce a feature named a viewing key to selectively reveal transactions. According to Wilcox, that allows users to benefit from optional transparency, but do so in a way that comes with less inherent risk.
“If we have a privacy-by-default chain and you want to have an account that’s public you can just publish the viewing key to the world,” Wilcox said,
“That’s the world we want to move to.”
A turnstile audit
There is some subtlety involving the Sapling release, though.
In order to take advantage of the upgrade, users need to migrate funds from the earlier version of zcash, dubbed Sprout, into a new Sapling address – a move which will reveal user funds.
While the exposure of funds could come across as “surprising” to users, Wilcox said, it was done intentionally, in what he called a “turnstile audit.”
“It’s actually done intentionally because there’s always the possibility that the Sprout ceremony was compromised,” Wilcox said.
Stepping back, when zcash launched Sprout in 2016, it underwent a ceremony called a “trusted setup,” where the zk-snarks underlying its private blockchain were generated. This has been criticized for being vulnerable to attack. The concern is, if the ceremony had been compromised, it would allow users to print nonexistent zcash tokens.
As such, the company is running this turnstile audit during the Sapling migration. Wilcox said, “as sort of a check on that risk we want to do a sort of global audit to make sure that no counterfeiting has occurred.”
Towards this goal, the Zcash Company is releasing a migration tool and urging users to wait until this tool has been completed before migrating their funds. If users all migrate using the tool, the overall privacy will be better, because the actions of individual users are merged into one flow.
The tool won’t be completed for a number of months, meaning that for now, Sapling and Sprout addresses will continue to be supported by the zcash protocol.
Sprout addresses will be retired at some point in the future.
Yet, Wilcox stressed that the eventual retirement will not impact user funds. Once retired, users will be no longer able to receive transactions on Sprout addresses – but sending outward transactions to a Sapling address will function perfectly.
Still, this doesn’t mean that there are two different networks running concurrently. Users are still expected to upgrade their software to Sapling, and because of the new code’s superiority, Wilcox doesn’t expect there to be any problems here.
Speaking to that, Wilcox concluded:
“It’s not scalability of the base protocol, but it allows exchanges and wallets and things of that nature to support many users more efficiently.”
India’s Supreme Court, the country’s apex court, has directed the central government to present its official stance on cryptocurrency within two weeks.
In a telling move that seeks to end the ambiguity over the legality of cryptocurrencies like bitcoin in India, the government has been ordered to release its report on the cryptocurrency sector by the Supreme Court.
The Supreme Court has been inundated with multiple petitions filed by cryptocurrency exchanges and industry groups that have challenged a banking blockade enforced by the central bank in April, a crippling policy that has largely shuttered the domestic crypto sector.
While the Reserve Bank of India (RBI) has issued multiple cautions against the use of cryptocurrency over the years (from as early as 2013), they aren’t illegal in the country.
As reported previously, the Reserve Bank of India has shunned responsibility when asked to provide clarity on the legal status of cryptocurrencies. It was a policy matter for the government, the central bank argued.
According to an Economic Times report on Friday, a legal counsel representing nine cryptocurrency exchanges demanded the government bring some clarity.
“We have got employees. There are jobs,” counsel Nakul Dewan for the sector argued, in the same week wherein the co-founders of India’s largest exchange, Unocoin were arrested for installing a cryptocurrency ATM in the city of Bangalore.
An advocate for the central bank countered by claiming that the authority was ‘only trying to discourage the use of cryptocurrencies,’ insisting it was ‘a policy decision’ for the government.
The legality debate at the Supreme Court may be nearing its end. After hearing the arguments presented, the Supreme Court’s bench of Justices has demanded the government place its position before the court in two weeks’ time.
Crypto Matter heard today in Court no. 8 as item no. 19.
Counsel for Union of India apprised that Committee is going to come up with a report on Crypto.
Court has directed the Govt. to file Counter Affidavit within 2 weeks.
Matter to be listed after 2 weeks now. #RBI
— Crypto Kanoon (@cryptokanoon) October 25, 2018
Cryptocurrency mining firm Bitfury is considering an initial public offering in Amsterdam or London as early as 2019. The move would make Bitfury the first major crypto IPO listed in Europe.
The Amsterdam-based blockchain startup could seek a valuation of $3 billion to $5 billion, sources told Bloomberg. The company is speaking with several investment banks to explore its options, including debuting on a Hong Kong exchange.
No final decisions have been made. Bitfury has been making key moves to expand its business, even as the cryptocurrency market remains sluggish.
Bitfury Rival Recently Launched IPO
Bitfury, which launched in 2011 as a bitcoin mining company and maker of crypto-mining gear, has since expanded into blockchain research. It expects to report revenue of $450 million for the last fiscal year.
Last month, Bitfury rolled out a new SHA256 application-specific integrated circuit (ASIC) chip that can achieve a hashrate of 120GH/s with a power efficiency of 55mW/GH.
Two days later, Bitfury’s much-larger rival — Bitmain Technologies — unveiled a new 7nm ASIC mining chip for the SHA256 algorithm used by bitcoin, bitcoin cash, and other virtual currencies,
With its proposed IPO, Bitfury is following in the footsteps of Bitmain — the world’s most valuable cryptocurrency company. In September 2018, Bitmain filed for an initial public offering in Hong Kong with a potential valuation of up to $3 billion.
CNBC Analyst: Coinbase Mulls IPO
Meanwhile, Coinbase, the largest U.S. cryptocurrency exchange, may be preparing to go public,
Crypto analyst Ryan NeuNer, who hosts the show “CryptoTrader” on CNBC South Africa, promised to reveal details of Coinbase’s purported IPO soon.
CNBC Cryptotrader exposes details of the Coinbase IPO raise tomorrow on a Cryptotrader exclusive. pic.twitter.com/YG4UOP3ju8
— Ran NeuNer (@cryptomanran) October 25, 2018
NeuNer recently predicted that bitcoin prices were “about to explode,”citing bullish market buzz about the near-term possibility of an SEC-approved bitcoin ETF.
Since then, BTC prices have remained generally flat.
In February 2018, Ran Neuner predicted that bitcoin prices would top $50,000 by the end of 2018. So far, that forecast appears unrealistic given current market conditions.
For the record, I am pinning this tweet. Bitcoin will finish 2018 at $50 000.
— Ran NeuNer (@cryptomanran) February 2, 2018
The traditional financial industry has slowly but gradually started recognizing cryptocurrencies as a viable asset class as its mainstream popularity continues to escalate.
The lack of an established regulatory framework has been cited as a key reason for Wall Street’s hesitation in throwing its full support behind the burgeoning market.
That said, there are signs that a sea change afoot. Fidelity Investments, whose assets under management tops $2 trillion, plans to launch a separate company to provide cryptocurrency custody and institutional trade-execution services.
“Our goal is to make digitally-native assets, such as bitcoin, more accessible to investors,” Fidelity CEO Abigail Johnson said. “We expect to continue investing and experimenting, over the long-term, with ways to make this emerging asset class easier for our clients to understand and use.”
According to @cnLedger, who follows Chinese cryptocurrency news, Andreas Antonopoulous’ book, Mastering Bitcoin, was recently recommended on Chinese television as a way to get introduced to cryptocurrency and the blockchain.
.@aantonop 's "Mastering Bitcoin" was recommended on China's official TV channel today to national wide audience. However, the book title in the Chinese version was changed to "Blockchain: The Path Towards Digitized Assets". No #Bitcoin mentioned at all!https://t.co/NjtizGipeT pic.twitter.com/a16i2dI5tb
— cnLedger (@cnLedger) October 25, 2018
The tweet mentions that the Chinese version of the book, as made available in the Asian nation, has a completely different title – Blockchain: The Path Towards Digitized Assets.
Antonopoulous, widely considered one of the leading experts on Bitcoin and professional speaker on the subject who has made numerous major media appearances, was nevertheless pleased with the news. He considers himself the “open blockchain expert.”
How cool is this: "Mastering Bitcoin 1Ed", on Chinese national TV. Even with a slightly sanitized title (no mention of Bitcoin), the content is the same.
Hoping to visiting China next year. Maybe this brings more opportunities and conference invitations. https://t.co/SHOBoaiF9a
— Andreas M. Antonopoulos (@aantonop) October 25, 2018
The book is meant to introduce a newcomer to Bitcoin and help them become a “master” of the subject. Of course, there’s no mastery of something which remains in development, the book does a great job of helping people get acquainted with the subject. There are numerous complexities within Bitcoin which the book helps to iron out, from the first chapter on, such as the following:
Bitcoin is a distributed, peer-to-peer system. As such there is no “central” server or point of control. Bitcoin are created through a process called “mining,” which involves competing to find solutions to a mathematical problem while processing bitcoin transactions. Any participant in the bitcoin network (i.e., anyone using a device running the full bitcoin protocol stack) may operate as a miner, using their computer’s processing power to verify and record transactions. Every 10 minutes, on average, a bitcoin miner is able to validate the transactions of the past 10 minutes and is rewarded with brand new bitcoin. Essentially, bitcoin mining decentralizes the currency-issuance and clearing functions of a central bank and replaces the need for any central bank.
Readers who are interested can read the book for free.
Andreas Antonopoulous travels the world giving talks on the subject of Bitcoin and has long been considered an authority on it. Whenever the Bitcoin community is facing a serious dilemma, his opinion carries a great deal of weight.
Bitcoin is nothing new in China. It has long been one of the top mining hubs and its regulatory landscape has been a subject of keen interest. It is home to several of the major exchanges and mining hardware producers. It is, of course, where most of the hardware used in Bitcoin is produced, regardless if the companies are based in China.
Several Chinese people have become notable figures in important debates and topics within the Bitcoin space, including Jihan Wu and Samson Mow, both of whom played prominent if opposite roles in the great Bitcoin scaling debate which eventually culminated in the Bitcoin Cash fork.
Throughout the past ten days, the Bitcoin price has remained in a tight range from $6,300 to $6,500, rarely initiating a noticeable movement.
The 1-day price chart of Bitcoin, as shown below, demonstrates nearly two weeks of stability in the lower price range of the dominant cryptocurrency, unable to engage in a short-term upside movement to confirm a breakout above a major resistance level.
In the past 24 hours, the volume of BTC has fallen back to $3.1 billion from $3.5 billion, by more than 10 percent. The lack of trading activity in the cryptocurrency exchange market can be attributed to the tendency of traders to prevent the initiation of high-risk and high-return trades in a period of extended stability and low volatility.
According to prominent cryptocurrency trader and technical analyst Peter Brandt, the price trend of BTC throughout the past ten days demonstrates a classic Wyckoff hinge, which suggests that buyers are in control in the market that has been dominated by bears and sellers since early 2018.
“Wyckoff would classify these past 10 days as classic hinge behavior,” Brandt said.
However, for the hinge to materialize, an abrupt increase in the price of Bitcoin to the $6,800 to $7,000 range to breakout of the $6,800 resistance level is required, which traders are observing at this time.
Due to the low volume and trading activity of the cryptocurrency exchange market, a sudden breakout of Bitcoin in a higher price range is becoming increasingly unlikely, at least in the short-term.
As for technical indicators and minor price movements of Bitcoin, since August 9, the asset has barely made any movement outside of the $6,300 to $6,800 range, portraying the lowest rate of volatility in recent years.
Often, the stability in the price of BTC leads to an increase in value of small market cap cryptocurrencies and tokens. But, the low volume of the crypto market has prevented traders from engaging in risky trades in a market that is highly unpredictable.
Most tokens including Wanchain, Golem, Funfair, Aelf, and Zilliqa have made 2 to 8 percent gains across the board over the last 24 hours.
Positive Development Out of China
Throughout the past several months, with the imposition of a ban on Alipay in settling cryptocurrency-related transactions, the government of China has cracked down on the crypto market, strengthening the existing blanket ban on the asset class.
On October 26, CnLedger, a trusted cryptocurrency source in China, reported that a local court ruled Bitcoin to be a property and protected under law, reaffirming the legality of owning and holding BTC.
“Chinese court confirms Bitcoin is protected by law. Shenzhen Court of International Arbitration ruled a case involving cryptos. Inside the verdict: China law does not forbid owning & transferring bitcoin, which should be protected by law because of its property nature and economic value.”
While the ruling of the court does not change the inability of investors in China to legally invest in BTC, it is possible to rely on over-the-counter (OTC) markets to purchase crypto and hold onto them.
- ETH price did not move higher above the $201 and $203 resistances against the US Dollar.
- Yesterday’s highlighted important bearish trend line is in place with resistance at $200 on the hourly chart of ETH/USD (data feed via Kraken).
- The pair could decline sharply if there is a downside break below the $196-197 support.
Ethereum price is under pressure against the US Dollar and bitcoin. ETH/USD must stay above $196 to avoid a downside break in the near term.
Ethereum Price Analysis
During the past few hours, there were mostly range moves below $201 in ETH price against the US Dollar. The ETH/USD pair failed to move higher above the $201 and $203 resistances, and declined slowly. There was a bearish structure formed after the price failed to break the $200.65-201.00 zone. The price also failed to clear the 50% Fib retracement level of the last drop from the $204 swing high to $198 low.
More importantly, yesterday’s highlighted important bearish trend line is in place with resistance at $200 on the hourly chart of ETH/USD. The price is also trading well below the $201 pivot level and the 100 hourly simple moving average. If there is a break above the trend line, the price may struggle near $201-202. It represents the 61.8% Fib retracement level of the last drop from the $204 swing high to $198 low. A convincing close above the $201 level and the 100 hourly SMA is needed for buyers to start a decent recovery. On the downside, the $196 and $197 levels are important supports. Below these, the price may drop sharply towards the $185 level.
Looking at the chart, ETH price is clearly following a bearish structure below $201. To recover, the price must break the $200, $201 and $202 resistance levels in the near term.
Hourly MACD – The MACD is still in the bearish zone.
Hourly RSI – The RSI is showing no recovery signs below the 50 level.
Major Support Level – $197
Major Resistance Level – $201
An arbitration body in China has ruled that despite the central bank’s ban on cryptocurrency trading, bitcoin should still be legally protected as a property with economic values.
The Shenzhen Court of International Arbitration published a case analysis on Thursday via WeChat, detailing its ruling on a recent economic dispute that involved a business contract relating to possession and transfer of crypto assets.
According to the case analysis, the unnamed plaintiff signed a contract agreement with the defendant, which allowed the latter to trade and manage a pool of cryptocurrencies on the plaintiff’s behalf.
However, the plaintiff said the defendant failed and refused to return the cryptocurrencies after an agreed deadline, and hence brought the case to the arbitrator, demanding for the return of the assets with interests.
The cryptocurrencies at dispute included 20.13 bitcoin, 50 bitcoin cash, and 12.66 Bitcoin Diamond, worth around $493,158, the plaintiff said.
While there’s no specific law in China governing cryptocurrencies, the arbitrator’s analysis offers a window into its thinking on the nature of this emerging technology.
The arbitrator said one main argument made by the defendant was that the ban from the People’s Bank of China (PBoC) on cryptocurrency trading and initial coin offerings essentially means crypto payments and transactions should all be illegal in China. As such, the entire contract, by default, would become invalid.
Further, with the trading ban, the defendant said there was no venue to trade and send the assets to the plaintiff.
However, the arbitrator disagreed, explaining the nature of the case is about the contractual obligation for returning cryptocurrencies, which does not fall under the cryptocurrency trading or initial coin offering categories outlined in the PBoC’s ban in September last year.
The arbitrator added there’s no law in China that prohibits the possession of bitcoin and its transactions between individuals. Further, it said there should be no technical difficulties for sending bitcoins as long as one has an address and the private key.
“The Arbitration Court noticed that after September 2017, major bitcoin exchanges operating in China at the time suspended their businesses. But technically, that fact does not prevent the defendant from sending the bitcoin and bitcoin cash at dispute to the plaintiff upon the agreed deadline,” the arbitrator added.
Hence, it concluded that whether bitcoin is a legal tender or not, does not have an impact on the fact that bitcoin should be protected legally based on China’s Contract Law, adding:
“Bitcoin has the nature of a property, which can be owned and controlled by parties, and is able to provide economic values and benefits.”
The arbitrator is one of the Arbitration Committees established in China after the country enacted a law in 1995 enabling city governments to form such entities to rule on economic disputes relating to contract issues in areas such as business, finance, and real estate.
Australia’s Digital Transformation Agency (DTA) doesn’t appear to be impressed with the current state of blockchain technology. According to its chief digital officer, the technology is being pushed not by governments or users, but by vendors.
BLOCKCHAIN AT THE “TOP OF A HYPE CYCLE”
Earlier this year, Australian Government provided AUD $700,000 to its Digital Transformation Agency in order to “investigate areas where blockchain technology could offer the most value for Government services.”
Almost half a year later, the DTA seems less than impressed with the current state of blockchain’s capabilities. Speaking at a Senate estimates hearing, the chief digital officer of DTA Peter Alexander said:
It’s an interesting technology but it’s early on in the development. It’s at the top of a hype cycle. A lot of the engagement [with the agencies] is comparing blockchain against existing technologies.
He also added that “without standardization and a lot more work, for every use of blockchain that you would consider today there is a better technology.”
It’s interesting, though, that while DTA was conducting the half a million dollar research, the Australian government chose IBM as a technology partner in a $740 million deal for providing services related to automation and blockchain technologies.
In a slightly awkwardly worded statement, Mr. Alexander outlined that governments are not, in fact, pushing for blockchain adoption:
It would be fair to say that a lot of the big vendors are pushing blockchain very hard and internationally most of the hype around blockchain is coming from vendors and companies, not from governments and users and deliverers of services.
And while it’s unclear what the difference between a “vendor” and a “deliverer of services” is, one thing is undeniably true and proudly acknowledged: those AUD$700,000 are being “absorbed”:
We actually costed that with the application of the team staff, and we’re absorbing that funding. We were doing some work on it, we have a team that will do that and we costed the staff effort.
In other words, half a million dollars and 6 months later, DTA determined that blockchain is “early on in the development.” Profound.
India’s supreme court has brought up the case against the cryptocurrency banking ban by the Reserve Bank of India after one-and-a-half months of delay. The court has reportedly asked the government to submit a report of the findings from the committee it had set up to understand the crypto space and recommend regulatory measures.
Supreme Court Hearing
The Supreme Court of India originally planned to hear the petitions against the cryptocurrency banking ban imposed by the country’s central bank, the Reserve Bank of India (RBI), on Sept. 11. After repeatedly postponing the case, the court finally brought it up on Thursday, Oct. 25.
“The matter came up for hearing today briefly. So some progress in the case finally,” Nischal Shetty, the CEO of Indian crypto exchange Wazirx, told news.Bitcoin.com. He described:
Supreme court has asked govt. to file an affidavit related to the findings of the crypto committee set up by them. They’re supposed to submit this within 2 weeks.
He elaborated, “The government of India had set up a crypto committee previously to understand this space. The supreme court has asked the government to submit the committee report.”
“We don’t know what the committee report contains as of now,” Shetty continued, adding that either the government will submit the report in court for all to see or they will “just inform the court about what they will be doing for crypto in India.”
“So regardless, what we can expect is much more clarity about crypto from a government point of view. That’s a good step forward,” he concluded.
The head of the committee, Subhash Chandra Garg, had previously said that the crypto guidelines would be ready in September. However, subsequent reports suggest that they will not be finalized before the year’s end.
Crypto India Marches On
The RBI issued its infamous circular on April 16, banning financial institutions under its control from providing services to crypto businesses. Soon after the circular was issued, a number of industry participants filed petitions against the ban, which went into effect in July. Banks subsequently closed the accounts of crypto exchanges.
A number of local exchanges have come up with their own solutions to bypass the banking ban including exchange-escrowed peer-to-peer (P2P) services. Several of them claim they are seeing rapid growth in trading volumes on their P2P platforms.
Last week, a major crypto exchange in the country, Unocoin, launched its INR deposit and withdrawal kiosk. However, police soon seized the machine and arrested two founders of the company, including the CEO.
Meanwhile, Zebpay halted its exchange activities in India due to the banking problem on Sept. 28 and proceeded to set up operations in Malta. On Oct. 18, Silvio Schembri, Malta’s Junior Minister for Financial Services, Digital Economy and Innovation, tweeted in response to the news of Zebpay moving to his country. “Welcome to #Malta. I look forward for the 1st of November for the Maltese regulators to start accepting applications for licensing.”
The head of an Indian nonprofit trade organization said cryptocurrency is “illegal,” and urged businesses to obey the law, local news daily the Hindu reported Thursday, Oct. 25.
Debjani Ghosh, the president of the National Association of Software and Services Companies (NASSCOM), was cited by the Hindu saying that cryptocurrencies are illegal from NASSCOM’s perspective. NASSCOM is a nonprofit trade association of over 2,000 member companies for the Indian IT and business process outsourcing industries.
“It is [the] law of the land and hence, we have to work with it,” Ghosh claimed about cryptocurrency’s ‘illegal’ status. She added, “If we do not agree, we have to go back to the government and speak about why cryptocurrencies aren’t correct.” However, Ghosh noted that the “illegal” status of crypto is the result of the government’s failure to keep up with innovation:
“The genesis of this problem, however, lies in the failure of policy making not keeping pace with rapid technological changes. NASSCOM’s focus would be to say, how do you synergize technological development and policy making. I think that will be our focus.”
Cryptocurrency is currently legal in India, but in July the Reserve Bank of India (RBI) banned the country’s banks from servicing businesses involved in exchanging or processing digital assets. At the time, RBI cited risks to financial stability and the security of investors as being the main reasons behind the ban.
Following the crackdown, commentators were quick to note that, while banking activities for crypto business were suspended, it was not a ban on crypto in India outright. The country’s supreme court continues to uphold the ban even after hearing a raft of petitions.
Since July, the ban has had severe repercussions for the industry. Exchanges in particular have faced difficult conditions, with major platform Zebpay halting operations and relocating to crypto-friendly Malta.
Ghosh’s comments come after police clamped down this week on a project from crypto exchange Unocoin, arresting its co-founders after they installed a Bitcoin ATM in a Bangalore shopping mall.
Various media outlets have cited authorities who reportedly explained that the ATM “had not taken any permission from the state government and is dealing in cryptocurrency outside the remit of the law.” According to a police official quoted by the Times of India, the central bank considers cryptocurrency “illegal.”
Here’s something we don’t hear every day: a Swiss bank has opted to enable its clients to participate in initial coin offerings easily.
The bank, Swissquote, has previously allowed customers to trade in cryptos. This is, to say the least, an unusual service for a fiat banking institution. Additionally, Swissquote offers traditional FOREX trading and the range of services that traditional banks offer.
The first ICO to be offered as an investment option on the banking platform is LakeDiamond, a lab-grown diamond company which is raising funds to purchase new equipment. They will offer more ICOs in the future.
The pre-sale of this ICO is ongoing and offers a 10 percent bonus up to 4 million CHF (just under $4 million).The regular public sale will not open until January. Presumably, buyers will not have the opportunity to realize any gains or exchange their tokens for other cryptocurrencies before the spring.
The token itself is pegged to the cost of diamond production. Each token is meant to be equivalent in value to “1 (one) minute of growth reactor operating time, which produces lab-grown diamonds. One minute is the smallest possible unit, so the tokens are non-divisible past this point. If a diamond plate takes 180.5 minutes to grow, it will consume 181 LKD.”
While this is not an ICO Review, LKD tokens are priced around 50 cents each. There will be a maximum supply of close to 6.8 million. The funds raised will be used to improve and expand the firm’s operations. Within the system, the tokens will have utility.
Lab-grown diamonds are a growing industry which markets themselves as more ethical. The movie Blood Diamond speaks to the reason that the ethics of traditional diamonds can be seen as questionable. Like all industries which require entry into disadvantaged countries and massive labor forces, the diamond industry has its share of detractors. Nevertheless, not everyone feels they are more ethical. There is the fact that they require less labor and if they became the norm, many thousands of people would find themselves without a livelihood.
You Don’t Need a Bank to Invest in ICOs
Yet, there’s certainly nothing unethical about investing in a firm to help it grow. LakeDiamond is meeting a demand and wants the public’s help to get there. SwissQuote feels it is a good investment opportunity for its account holders, and so they have partnered.
All the same, cryptonaughts have invested in ICOs since before banks even took notice of bitcoin or any other cryptocurrency. While it is certainly positive to see a bank be so forward-thinking, ultimately banks are not necessary for investment into ICOs and are furthermore decreasingly necessary for anything at all as the blockchain revolution moves on.
Cryptocurrency web wallet provider Blockchain has struck a deal with hardware wallet producer Ledger to manufacture a custom hardware device that will allow Blockchain users to seamlessly manage their online and offline funds through a single familiar interface.
Unveiled on Thursday, the Blockchain Lockbox, is, according to an announcement, a “first-of-its-kind hardware and software” solution. Leveraging the strengths of both companies, the Lockbox will provide Blockchain users with a way to move a portion of their funds offline, further securing them from hacks, while also having the option to leave funds in the firm’s non-custodial web wallet, which can be accessed apart from the hardware device.
“The Lockbox is a reflection of what our companies both do best. We’ve created an elegant software and hardware integration that offers more functionality than previously existed in our space. We’re thrilled to offer the Lockbox to Blockchain users so they can easily manage their funds online and offline seamlessly,” said Peter Smith, CEO and co-founder of Blockchain.
The device appears to utilize Ledger Nano S hardware, though it features custom Blockchain firmware rather than the standard version. Ledger said that deliveries of the device, which is now available for preorder for $99.99, should begin in mid-November.
“With stories about crypto hacking continuing to dominate headlines, it’s obvious that security must be top of mind for all stakeholders in the crypto space,” added Pascal Gauthier, president of Ledger. “With the combined forces of Blockchain and Ledger, users are truly getting the best of both worlds. Our partnership with Blockchain is the first of its kind, but as two companies hyper-focused on crypto security, it’s one that’s a natural fit.”
Notably, the announcement said that existing Ledger customers will have the option to pair their Nano S wallets to the Blockchain wallet, providing them with the abilities to manage their online and offline funds together as well as access Blockchain’s inter-wallet trading feature.
Trezor, another large cryptocurrency hardware wallet manufacturer, recently updated its wallet management interface to allow users to trade between cryptocurrencies via brokerage services ShapeShift and Changelly.
However, both Ledger and Trezor could soon face a stiff challenge from electronics giant Sony, who, this week unveiled a cryptocurrency hardware wallet system that it said it plans to “commercialize” in the future. Sony’s wallet, which is the size of a credit card, uses contactless IC technology to store private keys offline while allowing users to easily sign transactions from NFC-enabled mobile devices.
Mastercard has gone all the way through the stages of the resistance proverb — “first they ignore you, then they laugh at you, then they fight you, then you win.”
Cryptocurrencies & Mastercard: A Turbulent History
Like most financial companies, Mastercard never expected the blockchain, and by the time they took note of it, they were unprepared for the changes it could and will bring. So their earliest reactions were, to say the least, not positive. A massive firm, however, they were at the same time studying the technology and looking for ways to utilize it, as well as looking for ways to legally make use of cryptocurrencies.
The company has been all over the place on the issue, eventually admitting that it could be “good.”
The Ultimate Irony: Fractional Reserve Blockchain
Now, some years after initially associating cryptocurrencies with crime, Mastercard is seeking a patent for fractional reserve management of blockchain assets. You read that right, and there are likely a number of cryptonaughts laughing their heads off as they digest this. Fractional reserve banking is one of the problems Bitcoin was designed to solve. It is a practice which most who gravitate toward cryptocurrencies would prefer to see eradicated.
In general, Bitcoiners are not fans of debt-based currency. Bitcoin and most other cryptocurrencies are therefore regarded as sound money.
A Step Beyond Not Owning Your Keys: Not Even Being Sure the Institution Has Your Funds
The patent Mastercard is seeking — application 20180308092 — describes a system which will simultaneously track crypto assets and fiat assets. Essentially, it’s a web wallet with a combination of cryptocurrency and fiat accounts.
Bitcoin banking institutions like Coinbase have had trouble gaining traction with cryptocurrency natives over the years for the simple reason that the user/owner of the funds does not then hold the keys. In the cryptonaught’s eyes, not holding the keys to your coin is the same as not holding your coin at all. It can disappear, and there is nothing you can do about it. Thus, the largest component of Coinbase’s customers has been newcomers looking for convenient ways to acquire Bitcoin.
The patent essentially describes a cryptocurrency credit card network.
“Thus, there is a need to improve on the storage and processing of transactions that utilize blockchain currencies. Existing payment networks and payment processing systems that utilize fiat currency are specially designed and configured to safely store and protect consumer and merchant information and credentials and to transmit sensitive data between computing systems. In addition, existing payment systems are often configured to perform complex calculations, risk assessments, and fraud algorithm applications extremely fast, as to ensure quick processing of fiat currency transactions. Accordingly, the use of traditional payment networks and payment systems technologies in combination with blockchain currencies may provide consumers and merchants the benefits of the decentralized blockchain while still maintaining security of account information and provide a strong defense against fraud and theft.”
They see a benefit to mixing traditional and cryptocurrency technologies, and the system described would likely include their existing products and payment networks.
“Transactions that may be performed via a payment network may include product or service purchases, credit purchases, debit transactions, fund transfers, account withdrawals, etc. Payment networks may be configured to perform transactions via cash-substitutes, which may include payment cards, letters of credit, checks, transaction accounts, etc.”
Mastercard seeks to do what it does best: process transactions. In the same way, funds can be moved around an exchange or a gambling site instantaneously once their deposits are cleared, Mastercard would like to make this possible for merchants. In this respect, despite the problems associated with fractional reserve anything, Mastercard could potentially make a massive contribution to the Bitcoin economy by enabling millions of existing clients to accept cryptocurrency payments.
Patents take time to process, so we will see how this develops.
Data from the Bank of Canada and the Ontario Securities Commission has revealed that bitcoin adoption and general crypto awareness in Canada is growing steadily, with the percentage of Canadian poll respondents who own bitcoin rising from 2.9 percent in 2016 to 5 percent in 2017.
According to a recently released report by the Bank of Canada titled “Bitcoin Awareness and Usage in
Canada: An Update,” Canadians between the ages of 45 and 54 were the group that reported the largest growth in bitcoin ownership over the period, multiplying nearly four times from 0.9 percent in 2016 to 3.5 percent in 2017. Similarly, an OSC report shows that about 1 in 10 Ontarians either currently hold or used to hold cryptoassets.
The Bank of Canada report shows that the gender gap for bitcoin ownership widened considerably over the period in question, with female bitcoin owners in Canada remaining at 2 percent of the population, while the male bitcoin ownership figure nearly doubled, jumping from 4.2 percent to 8.1 percent. Significantly, ownership did not only grow in heavily populated provinces with urban centres like Ontario and British Columbia but grew across all provinces including Manitoba, Saskatchewan, and Alberta. It also showed that the number of holders of small bitcoin amounts has increased by a wider margin than that of people holding more than 10 BTC.
The OSC’s data estimates the total number of Ontario residents holding cryptoassets at 500,000 by extrapolating the sample respondents to the population of the entire province. Of these, 63 percent say they own bitcoin, followed by 35 percent for ether, 18 percent for litecoin, 17 percent for bitcoin cash, and 13 percent for ripple (XRP). Very significantly, the report was able to ascertain from respondents when they first purchased their crypto holdings, which revealed that, unsurprisingly, a large percentage purchased their first coins in late 2017 or early 2018.
According to the survey, which was conducted in March 2018, 35 percent of crypto holders reported having made their first purchase of cryptocurrency within the previous three months, and a further 37 percent say they first obtained crypto within the past year. Just 27 percent indicated having purchased their crypto more than a year ago, which means that 72 percent of crypto holders in Ontario have bought in over the past one year. This tells a significant story about the growth of crypto adoption in Canada’s most populated province.
As cryptocurrencies continue to grow in popularity and spread across Canada, regulators are also keeping an eye on the new opportunities and threats presented in the country, which was recently described as “more blockchain-friendly than the US.” Canadian and American regulators are collaborating on a joint cross-border operation targeting ICO and cryptocurrency scams called “Operation Cryptosweep.”
Ripple Labs has unveiled their quarterly market report, and things appear positive overall. Between its two major operations, Ripple Labs and Ripple II, which caters to institutional investors and is fully licensed, the firm moved more than $160 million in ripple (XRP). Interestingly, these sales accounted for less than half a percent of the total volume of the market, meaning that trading in ripple has been on a volatile upswing.
The ripple price has risen dramatically over time, currently sitting at over 40 cents a token. With a total market supply of some 100 billion tokens, the network as a whole is currently priced around $40 billion (though just $18.5 billion of those funds are currently in circulation).
As with all crypto assets, however, liquidity for a figure of that sort is unlikely. Actual liquid cash convertible from XRP might be in the low hundreds of millions as opposed to billions. Nevertheless, this is a vast improvement over the days when it would have taken 200 XRP to make a dollar.
Last year, Ripple locked up 55 billion of its own XRP supply to create stability in the trading markets. The move appears to have played well with the psychology of the cryptocurrency investment community.
Over the past three months, 3 billion of that 55 billion have returned to the hands of Ripple, with 2.6 billion being thus returned to escrow. The report explains:
“In Q3 2018, 3 billion XRP was again released out of escrow (1 billion each month). 2.6 billion XRP was subsequently put into new escrow contracts. […] The remaining 400 million XRP not returned to escrow is being used in a variety of ways to help support the XRP ecosystem.”
An interesting factoid from the report is that for most of the third quarter of this year, Maltese exchanges led the way in terms of trading volume.
“Over the last six months, Malta has proposed a number of rules that create a clear legal framework for the trading of digital assets. Additionally, Malta lets international companies pay as little as 5 percent in corporate taxes. Prime Minister Dr. Joseph Muscat has called cryptocurrencies ‘the inevitable future of money.’ This has led to a number of large crypto firms, including Binance and OKEX Technology, moving their operations to the Mediterranean island nation.”
Ripple continues to be one of the leading digital currency outfits, and the firm touts regulatory compliance as its modus operandi. The firm has frequently butted heads with traditional cryptocurrency advocates due to its outspoken propensity for government oversight as well as claims that the network itself is centralized. Nevertheless, Ripple appears to be flourishing.
Electronics giant Sony has developed technology that it believes will help cryptocurrency users store their assets more securely, and that technology might just be coming soon to store near you.
The Japanese tech conglomerate this week announced that its Computer Science Laboratories division (Sony CSL) had developed a cryptocurrency hardware wallet that could be used to store bitcoin and other digital assets in a secure offline environment while retaining the convenience of less-secure online crypto storage systems.
Unlike conventional cryptocurrency hardware wallets like the Trezor One and Ledger Nano S, which connect to the user’s PC or mobile device using a USB cord, Sony CSL’s wallet would store the user’s private keys on a contactless IC card, enabling the user to easily sign transactions from an NFC-enabled mobile device.
“This IC card type hardware wallet is small, portable and useful, unlike typical existing hardware wallets that connect to PCs via USB. In addition, it is possible to securely generate and store a private key with a highly reliable tamper-proof module within the IC card.”
The release further noted that this type of wallet card would have “multiple possible applications,” including allowing a user to sign a blockchain transaction authorizing the use of their personal information.
Perhaps most notably, Sony’s development of cryptocurrency tech does not appear to be a mere research project, or, as is often the case, an instance of a company seeking to position itself as an innovator in cutting-edge technology, even though it has no plans to convert its research into real-world products and applications.
Earlier this year, Sony applied to patent a system that uses blockchain technology for digital rights management (DRM). Just this month, the company unveiled the production version of that system, which will build on Sony Global Education’s already-existent DRM platform for sharing educational data.
In its latest announcement, the firm said it plans to work toward the “commercialization” of its cryptocurrency wallet, with the ultimate aim of furthering the spread of blockchain technology.
The company said, “Sony CSL will continue advancing towards the commercialization of that ‘cryptocurrency hardware wallet technology’ that allows for safe and secure transactions of digital assets including cryptocurrencies with the aim of further…adoption of blockchain technology.”
Japan’s primarily financial regulator is mulling a leverage cap on the amount of funds investors can borrow for margin trading with cryptocurrencies.
In a marked effort to clamp down on speculative trading to minimise volatility risks for investors, the Financial Services Agency (FSA) is considering leverage caps on margin trading, the Nikkei reported on Thursday.
There are presently no restrictions on margin trading borrowing currently in domestic Japanese markets, enabling some exchanges to offer traders up to 25 times the deposit as leverage, the default upper limit margin for foreign exchange trading. By contrast, the financial regulator is reportedly considering caps between two to four times the deposits, with limits as low as 2:1 also proposed.
According to the FSA’s own data from April this year, Japan is home to over 3.5 million active cryptocurrency traders, with a majority aged from 20 to 40 years.
While annual domestic trading in bitcoin – the world’s first and most traded cryptocurrency – rose from $22 million in 2014 to $97 billion in 2017, a majority of the total domestic trading volume in 2017 occurred in derivatives trading. Margin traders represented a significant majority behind the $543 billion traded in 2017.
The Nikkei report adds that seven of the sixteen licensed cryptocurrency exchanges provide margin-trading platforms. Incidentally, a self-regulatory body representing those licensed exchange operators has already enforced a 4-to-1 limit on margin trading earlier in July.
“This is just a provisional measure — I don’t think a ratio of 4 is adequate,” Japan Virtual Currency Exchange Association (JVCEA) chair Taizen Okuyama said.
The JVCEA now has the ability to monitor and self-regulate the sixteen licensed exchanges after being approved as a “certified fund settlement business association” following scrutiny over a two-month review by the FSA yesterday.
Travel commerce platform Travelport has deepened its partnership with IBM by moving to the next phase of using blockchain technology.
UK-based Travelport announced on Wednesday it was expanding its partnership with US tech giant IBM after the successful use of IBM Blockchain in a proof-of-concept (PoC) trial to automate validation, distribution, and settlement processes for hotel content between hotels, travel agencies, and its platform.
The two companies will continue their joint work by collaborating on technological innovations focused on the travel industry. In a second program under the collaboration, Travelport is using the IBM Watson Data Platform to customize user experience by applying new instruments and traveler recommendations.
In the first program, Travelport achieved success with the trial and is now moving to the next phase to improve the hotel experience. The current development is focused on traveler needs. In the past few years, more people have been looking for a special experience as they want to share the related content through social media channels. Blockchain can help travelers, hotels, and travel agencies improve the management of the so-called long-tail content, which is essential for increasing online visibility.
Travel agencies have found it challenging to handle settlements across multiple suppliers, and processing a full transaction often requires time. Sometimes, they cannot sell the long-tail content because of issues with the travel experience and the high price of processing. Meanwhile, content suppliers are dissatisfied with the limited potential for offering a unique experience to travelers prior to their arrival at the hotel.
Travelport and IBM concluded that blockchain could enable the content to be managed in a way providing travel agencies with flexibility and building confidence in the travel experience. The technology also allows long-tail content suppliers to become more active in the ecosystem.
Mike Croucher, Travelport’s chief architect, commented:
“One challenge facing our industry in the new digital world is that onboarding content from smaller suppliers can be costly and take time. We know unique experiences are what modern travelers are looking for. Using blockchain to access these experiences is a value-adding deployment of this new technology.”
Croucher went on to explain:
“With IBM, we’re removing barriers that limit travel choice. We’re putting the ability into the hands of the operator to upload bookings and work through contracts and administrative tasks within the blockchain network rather than manually managing and owning these tasks, which is normally the expensive part of transactions.”
Blockchain adoption might help Travelport improve its platform. The company operates a travel commerce ecosystem that offers travel and tourism-related solutions like distributions, technology, and payment. The platform connects global travel providers with consumers through a B2B marketplace.
Elizabeth Pollock, industry client leader at IBM Travel & Transportation, stated:
“The benefit of blockchain in travel is that it provides the ability to put a smart contract across a distributed ledger. By implementing a smart contract, settling payments within the network and so forth, the technology significantly lowers the processing time, because it manages diverse ledgers across multiple companies in a way that takes manual processing and other processing out. The other benefit here is that you are also adding transparency to the system across all parties in the travel network.”
IBM is one of the tech companies most active in promoting and providing distributed ledger technologies (DLTs). In March of this year, it said its blockchain solutions had been used by over 400 enterprises
A 23-year-old woman has been arrested by the Sydney police for stealing $65,000 worth cryptocurrencies from a 56-year-old man.
Brisbane Times reported that the woman hacked the victim’s email account in January 2018. She used the two-step verification feature by changing the password and verifying it with her mobile number. She then sent 100,00 XRP to her account in China from the crypto accounts connected to the email account. The XRP were converted into Bitcoins and transferred to multiple e-wallets. The victim was able to acquire his account after two days, however, the woman had drained all his funds by that time.
Arthur Katsogiannis, Cybercrime Squad commander, said, “It’s a very significant crime and it’s the first we know of its type in Australia where an individual has been arrested and charged for the technology-enabled theft of cryptocurrency.”
Katsogiannis said that even though this crime is the first of its kind, it will become a norm in the coming years. He added that such incidents will prove to be dangerous for investors interested in cryptocurrencies.
news.com.au reported that the Public Order and Riot Squad (PORS) caught the woman at her parent’s house in Ebbing and seized all of her electronic devices. The woman is set to appear at Burwood Local Court on November 19.
Crypto Crimes Continue to Haunt Authorities
Last month, Oklahoma police arrested two men for allegedly stealing $14 million worth CMCT tokens from blockchain-based IT company Crowd Machine. The men got hold of the victim’s SIM card and replaced it with a fake one to use the former to access the crypto wallet.
In September 2018, Japanese crypto exchange Zaif lost 6.7 billion yen ($60 million) worth cryptocurrencies stored in hot wallets. This hack bore a resemblance to crypto exchange Coincheck’s hacking incident earlier this year. The exchange lost $530 million worth NEM stored in hot wallets, while the funds stored in cold wallets remained safe. Following the hack, the Financial Services Agency (FSA) of Japan sent business improvement orders to 6 crypto exchanges including Zaif.
Japan’s National Police Agency (NPA) recently published a report which explained that 158 crypto crimes were reported in the first half of 2018 alone. The agency added that 60% of these cases occurred due to the use of similar account and password details in various online accounts. With a total of 60 billion yen (approximately $534 million) stolen this year, XRP and BTC are considered the most targeted cryptocurrencies.
The U.S. Securities and Exchange Commission (SEC) has suspended trading in a firm for making several false cryptocurrency-related claims. Among them are the firm’s partnership with an SEC qualified custodian, regulated cryptocurrency transactions, and tokens that are fully registered with the commission.
The SEC announced on Monday that it has temporarily suspended trading in the securities of American Retail Group Inc. (ARGB) “for making false cryptocurrency-related claims about SEC regulation and registration.”
Referencing ARGB’s two August press releases, the SEC described:
The company [claimed it] had partnered with an SEC qualified custodian for use with cryptocurrency transactions that would be ‘under SEC regulations,’ and that the company was conducting a token offering that was ‘officially registered in accordance (with) SEC requirements.’
Formerly known as Resource Acquisition Group, ARGB is a Nevada corporation with stock quoted on OTC Link, a regulated alternative trading system owned and operated by OTC Markets Group Inc.
According to ARGB’s filing with the SEC, “the company’s purpose is to seek, investigate, and … acquire an interest in business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of an Exchange Act registered corporation.”
The firm is now also known as Simex Inc., after it acquired the Nevada-based company on May 16. According to ARGB, Simex has “developed and is commercializing a multi-functional online international digital asset management, investment and trading platform that is capable of buying and selling cryptocurrencies, tokens and conventional currencies.”
No SEC Endorsement
The SEC issued an investor alert earlier this month, warning about companies making false claims of its endorsements used to promote cryptocurrency investments. Robert A. Cohen, Chief of the SEC Enforcement Division’s Cyber The SEC does not endorse or qualify custodians for cryptocurrency, and investors should use vigilance when considering an investment in an initial coin offering.
The agency explained that under the federal securities laws it “can suspend trading in a stock for 10 days and generally prohibit a broker-dealer from soliciting investors to buy or sell the stock again until certain reporting requirements are met.”
American Retail Group issued a statement on Tuesday confirming that the SEC has suspended trading in its common stock from Oct. 22 to Nov. 2.
The group explained that Prime Trust, the entity in its two August press releases, “stated that it is a ‘qualified custodian.’” ARGB admitted it now understood that the “statement was not intended to imply that Prime Trust was registered with or regulated by the SEC as the company incorrectly stated in its press releases,” noting:
The company recognizes that the SEC does not endorse or qualify custodians for cryptocurrency or other forms of currency. The company has terminated its relationship with Prime Trust.
Furthermore, ARGB declared that “it had not registered a public offering of any of its securities or a cryptocurrency with the SEC or any state regulatory authority as stated in its press release of August 22, 2018.”
Vassili Oxenuk, the company’s president, stated his company still aims to “register an offering of a security convertible into a cryptocurrency for sale” with the SEC. However, he noted that registration is highly unlikely in the foreseeable future. “Given the inherent risk in cryptocurrencies and the uncertainty surrounding the future of cryptocurrencies, particularly in the United States, it would not be appropriate for the company to undertake such an offering,” he clarified.
The Spanish Ministry of Finance has closed a legal loophole allowing holders of bitcoin and other cryptocurrencies to skirt asset declaration laws. Announcing a draft anti-fraud law approved by the Council of Ministers earlier today, Finance Minister María Jesús Montero explained that the new law will mandate “the identification of the holders and the balances contributed by these virtual currencies,” obligating crypto asset holders to declare all cryptocurrency asset holdings.
Spanish daily newspaper ABC.es reports that Montero further stated that all Spaniards with offshore currency holdings in fiat or crypto must declare these holdings in an annual declaration to Spain’s Agencia Tributaria.
New Spanish Taxation Measures Affecting Crypto Holders
The draft law is intended to raise a further 850 million euros in tax revenue at a time when Spain is in desperate need of extra government revenue to fund investment and welfare spending in a country with 33.8 percent youth unemployment.
To assist revenue generation efforts, the Spanish government has introduced a draft bill to impose a 0.2 percent tax on purchases of listed shares valued at more than a billion euros. Whether this will have any impact on cryptocurrency investment remains unclear at the moment as no further information was forthcoming at press time.
In what may possibly be significant news for crypto traders depending on the Spanish government’s interpretation of crypto trading as a commercial activity, the so-called “Tobin tax” provision in the draft bill states that intraday net transactions will be taxed, which means that users buying and selling several assets in the same session will only be taxed based on their position at the start of trading and at close, regardless of the number of trades that took place during the period in question.
ABC.es also reports that a taskforce made up of 200 officials will be mobilized to monitor tax evasion and tax defaulters who owe the Spanish Treasury 600,000 euros or more, which is significantly down from the previous threshold of 1 million euros. This effort will be assisted with the creation of a framework for supplying VAT information immediately. The list of countries designated as tax havens will also be expanded as the Spanish government looks to block all available loopholes for tax avoidance.
Five countries namely, the UK, US, Australia, Canada and the Netherlands created the Joint Chiefs of Global Tax Enforcement (J5) partnership aimed at combating transnational tax evasion and money laundering.
An Indonesian financial firm is looking to put Sharia compliant bonds called sukuks on the blockchain to fund social projects.
Blossom Finance, a microfinancing platform for social causes using Sharia models, is planning to issue a blockchain-based sukuk in coming months, according to a Reuters report Wednesday.
While the size of the initial issuance may not be large, the use of blockchain tech is expected to lower issuance costs and attract more retail investors, chief strategy officer Khalid Howladar at a recent Islamic accounting event, according to the report.
While the size of the initial issuance may not be large, the use of blockchain tech is expected to lower issuance costs and attract more retail investors, said Howladar, adding:
“Technology allows you to on-board customers in a far cheaper way than you could ever do before. The sukuk would use a profit-sharing structure and carry a profit rate of around 10 percent.”
Unlike traditional bonds that are debt instruments with an interest component, sukuks are tradeable instruments based on a profit sharing model, much like stocks.
Blossom Finance also plans other blockchain-powered bonds to fund a green waste disposal project and a hospital expansion, the post adds.
Blossom Finance first introduced its “Smart Sukuk” platform in May to standardize and automate legal, accounting and payment aspects of the bonds. The platform utilizes ethereum smart contracts to “increase the efficiency and reach of sukuk issuance globally,” the firm said at the time.
Blockchain and smart contracts are seeing increasing attention in the bonds markets. A World Bank trial in August raised $81 million through its first blockchain-based bond.
The city council of Berkeley, California, was looking to approve the issuance of a blockchain-based microbond in May, as a way of funding local initiatives. And JPMorgan Chase in April partnered with National Bank of Canada and other major firms to trial a blockchain platform aimed to improve the debt issuance process.
The blockchain lead at National Bank of Canada said in a statement at the time that blockchain technology “has the potential to bring about major change in the financial services industry.”
A college freshman is coming after your cryptocurrency – but not to steal your coins, just to prove that someone could do so pretty easily.
According to a crypto enthusiast and security researcher going by the handle “geocold51,” most small-scale cryptocurrencies are at risk from the industry’s most feared vulnerability – the 51% attack. During this attack, a miner takes over more than half of a cryptocurrency’s mining power, which then allows them to erase a past transaction and replace it with another transaction – called a double spend.
While the ecosystem that’s been built up around bitcoin and other top-tier cryptos make them resistant to these kinds of attacks, other cryptocurrencies with less of a community of miners aren’t as secure.
Sure enough, on smaller coins, these kinds of attacks are getting more common. In a new report, Group-1B found $20 million worth of crypto theft accomplished with such attacks in 2018, as TNW reported.
On Saturday, October 13, geocold51 decided to display just how easy it was – livestreaming his attempt to 51% attack Bitcoin Private, a crypto with close to a $47 million market cap (at the time of writing).
Speaking to, geocold51 said, if a cryptocurrency can be so easily attacked, “it’s sort of a misvalue of a given currency by different investors.”
Geocold51 estimates he spent $100 to get to the point where he could have done a demonstration double spend on bitcoin private, but he stopped because his livestream got pulled.
Just to be clear, geocold51 wasn’t interested in stealing, and so he set up the demonstration where he’d send the bitcoin private he owned to two different wallets he owned. In that way, no user or exchange provider gets ripped off.
For him, it’s about displaying that many coins are vulnerable and, therefore, perhaps vastly over-valued.
That said, he estimates that to make a profit off a 51% attack, it would cost a malicious attacker roughly double – so around $200 – to buy some bitcoin on an exchange with his bitcoin private and then make another transaction on the longer chain that invalidates the first transaction, giving him his bitcoin private coins back and leaving the exchange coming up short.
While going through the exchange process costs more, the 51% attack has still become quite economical due to the rise of cloud computing. According to geocold51, without access to cloud mining, an attack like he did on bitcoin private would have cost him about $100,000 in hardware.
“Nicehash and the ability to rent hashing power fundamentally changes the landscape of 51% attacks,” geocold51 told, adding:
“If there’s not a lot of hashing power to secure it, but there is a lot of value associated with it, that’s where you can do a 51% attack.”
Still, the livestream didn’t work exactly as planned, and because of that, geocold51 said he would run a complete attack later. He told he will do it without a stream this week and release a recording of his demonstration on YouTube shortly after.
The young security researcher’s handle might remind some of another security guru.
According to geocold51, he was inspired by one of the most legendary hackers of recent years: geohot, who famously jailbroke the original iPhone, which means the restrictions on carriers and apps were removed.
These days, geohot likes to livestream himself searching for vulnerabilities.
And geocold51 figured he could start doing the same within the cryptocurrency ecosystem.
Geocold51 has a good knowledge of crypto. Back when GPU hardware was still lucrative for hobbyist miners, geocold51 mined quite a bit of bitcoin. He then began trading money on Cryptsy, before the exchange’s CEO allegedly walked away with millions of dollars in its user’s money.
In that, he lost nearly all his bitcoin.
But he still remained interested in the space, and continued to study up on how it all worked. And as the industry divided into hundreds and thousands of different cryptocurrencies, geocold51 thought he might be able to shine some light on the security pitfalls.
And others were interested in that too. His Reddit post about the challenge garnered 1500 upvotes and over Twitch, he received $888 in donations.
The day of the attack
What’s also interesting is that bitcoin private wasn’t his first target.
Instead, geocold51 had intended to go after einsteinium, a volunteer-run litecoin fork with a $19 million market cap and $598,000 in trading volume per day, at the time of this writing.
He announced his intent publicly, and as he got ready for the attack, commenters within his Twitch feed noted that the cryptocurrency’s hash rate was spiking.
Because he had announced the attack in advance, the einsteinium community boosted the hash rate because it was worried that such an attack could cause a chain split and create a second blockchain that people could get stuck on, according to Ben Kurland, one of the project’s board members. At that time, einsteinium was in the middle of a wallet upgrade. If users or exchanges did not upgrade their wallets in time, the blockchain split could have caused property loss.
Seeing the increased hash power, geocold51 decided to attack bitcoin private instead.
According to geocold51, he got up to 60,000 views during the Twitch livestream, before Twitch shut the stream down. The team at Twitch, he said, temporarily suspended him under the “attempts of threats of harm” section of its community guidelines.
He got another livestream up on Stream.Me a half-hour later.
Once broadcasting there, he was able to hire miners through Nicehash to mine bitcoin private. In fact, he almost immediately mined a block. And in very little time, he was controlling more than 50 percent of the hash power on the blockchain.
Pretty soon an account called “CommunityWatch” popped up in the stream and wrote: “Just a quick question: I’m assuming everything we are doing here is legal?”
Minutes later, geocold51’s video feed on Stream.Me cut out.
Geocold51 told that he had already gotten about two-thirds of the hash rate on bitcoin private. He’d transmitted his first transaction to a second wallet he controlled. And he had written another transaction onto an offline chain that went to a third wallet he controlled.
He was about to send this longer chain to the network, but since the whole point was to show people the attack could be done easily, he stopped once the livestreams shut off.
Protected in another way
Still, geocold51 is determined to follow through with his mission, and so will record his next attack to share on YouTube soon.
And while this vulnerability is likely to be worrying to many in the community, geocold51 noted that there is another way these coins are protected based on cryptocurrency game theory.
If someone tried to sell any significant volume of the coins, their price would likely plummet, since the community isn’t robust enough and doesn’t have huge amounts of liquidity. As such, geocold51 argued, even if it is easy to buy hash power and take over a network, it might not be feasible to make a lot of money from an attack.
Nevertheless, geocold51 is committed to continuing, using the donations he received to maybe even try to 51% attack more cryptocurrencies as well.
In fact, he told , he may intentionally attack some cryptocurrencies that have set up preventative measures for 51% attacks, to test them in production. For instance, the team developing Horizen (formerly zencash) believes it’s found a way to disincentivize 51% attacks by introducing certain miner penalties.
Geocold51 said he would be happy to fail against some of these measures.
Running the demonstrations privately and adding some production value on the final recording will likely make for more edifying content, according to geocold51, but he’s still a bit disappointed that his original plan didn’t pan out.
“There is something kind of neat about it being live.”
Mount Kenya provides visitors with a picturesque appeal reminiscent of the ambiance in a world of utopia. Beyond the charm and aura lies a tech-savvy Kenyan restaurant that has incorporated cryptocurrencies for facilitating payment.
Betty’s place puts its culinary skills into effective use in “nyama choma,” a tantalizing goat meat barbeque that many Kenyans savor.
Situated in the rural town of Nyeri, roughly 150km (90 miles) from the sprawling federal capital, Nairobi, it is one of the few startups in the country that has embraced blockchain technologies by allowing customers make payment with two cryptocurrencies – Bitcoin and Dash.
The Proprietress of the restaurant enthused on her ability to latch onto the big picture.
“Since the world is becoming more global, my place is also becoming a global restaurant,” she said.
The dividends of her ingenuity include the traffic of visitors who stop by at her restaurant from different parts of the world.
“I attract different customers from different parts of the world, whichever coin they have. As long as it’s a viable coin, we accept it.”
Ms. Wambugu ventured into trading in Bitcoin some years back, and within the space of 24 months, her working capital became large enough to purchase the two-story Nyeri hotel which she renamed Betty’s Place.
Strategically located along Nyeri’s major road axis, Betty’s Place has a commanding aesthetic appeal with its bright mustard-colored walls and magnificent windows. The design itself is a luring invitation to the libido that wells in the stomach. Hungry patrons fall to the bait of such irresistible aroma of meat on the grill. When you add the melodious symphony of the Kenyan orchestra, you can imagine why many have found the place as a resort.
Betty’s Place is not just a place where you enjoy the unique culinary cuisine of Kenyans, and it is also becoming a citadel for learning the rudiments of Bitcoin. Ms. Wambugu prides herself as a crypto-currency pioneer, and it will be out of place if she is faulted since she is putting her nous into effective use.
She introduced tutorial sessions on bitcoin for interested individuals, and the classes hold every Sunday at her restaurant.
“I’ve set aside one day where I can teach my customers. Whoever asks about cryptocurrencies: How does it work? What is Bitcoin? I train them.” she said.
Blockchain Technology Used In Housing Scheme
Cryptocurrency adoption in Kenya keeps rising despite a recurrent warning by the country’s apex bank, advising its citizens on the dangers of dealing with digital assets. While the country’s central bank has warned citizens against cryptocurrencies, the State’s Housing and Urban Development has rolled out plans to incorporate blockchain technology for the distribution of Government housing units.
The latest innovation is aimed at developing a scheme that will efficiently allocate houses using sophisticated ledger for proper management.
Australia’s leading market operator, ASX Limited disclosed plans being put in place to release blockchain technology for settlements in 2021. The company, however, does not feel overwhelmed by the deja-vu that has trailed the nascent technology, according to a Bloomberg report.
ASX Limited has subscribed to the Clearing House Electronic Subregister System (CHESS) over the years but is now ready to replace it with the more novel and innovative blockchain, a digitized, decentralized and distributed ledger technology. The overhauling is part of the exchange’s upgrade which deputy chief executive officer Peter Hiom described as an approach that has barely deviated from the norm.
CHESS is still being used to facilitate the legal ownership of a security from a seller to a buyer and also for processing monetary transactions involving the two parties. In spite of being an electronic book register, the innovation which blockchain is expected to bring on board will yield more efficiency.
“We’re not entering the fourth dimension here,” Hiom stated in an interview.
“It’s a database that lets you do a bunch of things more efficiently than you can do at the moment.”
Blockchain application should provide the required backup ensuring data are kept up to date and synchronized in such a way that removes the inconsistency. Hiom attested to this fact saying:
“There is a blockchain that is synchronizing my data store with yours, but the data store itself is a database that exists today. The innovation is the decentralized ledger that lets a client see ASX’s data. It’s taken an awful lot of risk and cost out of your back office because it is never the case that what you’ve got doesn’t match what I’ve got.”
Meanwhile, the Australian Stock market today closed 0.2% lower at 5269, recording a decline for a fourth consecutive season. The recent slump has been ascribed to the fall in the price of crude oil and plummeting shares of some other notable companies on the exchange.
While ASX executives are not willing to make any fuss about their imminent transition to the blockchain, there are a good number of other organizations who see such development as a big deal that could help ease the process of stock issuance and trading.
Earlier this week, Canada’s stock exchange operator TMX Group Limited adopted distributed ledger technology in clearing and settling securities on an integrated platform which is part of a more significant project known as the Jasper Research Initiative.
ASX sees it as an improvement but not necessarily as a feat. “It’s a very clever architecture, but it is just a database architecture. It doesn’t sound very sexy when you say it that way, but that’s kind of what it is,” Hiom added.
For several decades, banks and financial advisors have searched for ways to get those without vast resources to invest and save their money. An early example was Bank of America’s Keep the Change program, which rounded up purchases and moved the change to savings accounts.
The Need for Passive Investment
A few years back, the Lawnmower app came to fruition, enabling users to do a similar thing, except their spare change went to buy a small amount of Bitcoin. It later expanded to allow for numerous blockchain assets, though it is no longer available. In the traditional investing space, the Acorns app is all the rage, enabling users to do the same thing with the traditional stock market.
Everyday Americans have been increasingly interested in venture capitalism since the dawn of the dotcom boom, and CNBC’s Shark Tank, now in its tenth season, while a poor example of how VC meetings go, has the popularity to demonstrate this fact. Occasionally, technological innovations cross the stage of Shark Tank, and this week’s episode featured a creation of interest to crypto enthusiasts: the Bundil app, a Lawnmower-style application that enables users to invest their spare change in cryptocurrency.
Passive investment options like Bundil and Acorns are an important part of the 21st-century financial landscape. In the past, the best an everyday person could do was hire someone they hoped could manage their money successfully. Too many examples of fraud and theft took place in that era to list. Whenever you put a great deal of value in a centralized location and give one person or a small group of people in full control of it, bad things can and will happen. The era of the blockchain makes such instances rarer.
Kevin O’Leary Goes in for $100K
Of Shark Tank’s investor lineup, Mark Cuban is the most likely to invest in blockchain technologies. However, already having money in several including the untraceable messaging platform Dust and being an advisor on the Mercury protocol, he said he’s already invested in a similar platform to Bundil and passed on the offer.
Perhaps the heel of the show, Kevin O’Leary is often mocked by his fellow Shark Tank investors and rarely actually strikes a deal on the show. Being that all the other sharks backed out, O’Leary was Bundil creator Dmitri Love’s last hope. Love was offering a 10% stake in his company for $100,000, thereby valuing the application at $1 million.
O’Leary asked a surprising question for a balding millionaire investor: “Which cryptos does it support?” Love responded that it supports Bitcoin, Litecoin, and Ethereum. O’Leary was no nicer to Love than he is to anyone, and demanded 50% of the company in exchange for $100,000, effectively devaluing the company by 80%. He said, “You are going to fail within 36 months.” Matt Higgins suggested that Love should partner with existing exchanges to expand his reach, and Cuban notably said this was a good way to kill the business while trying to grow it. Higgins said that competing products were too easy to build.
After all the other sharks had backed out, O’Leary reiterated that he would be a 50/50 partner at $100,000, or he would also back out. Love seemed displeased with the offer, noting that “50% is a lot,” but ultimately accepted the investment from Kevin O’Leary. This effectively means that Bundil now has the star power and reach of a famous investor.
Love created Bundil as an answer to friends and family who continually pestered him about the perils of investing in cryptocurrency. It’s hard to convince people that they should risk real money on something they hardly understand. Acquiring Bitcoin and other cryptocurrencies comes with its own set of hurdles, so by the time an only-casually-interested party gets to where they can actually buy some coin, they’ve probably lost interest. In this way, passive investment apps are extremely important for the viability of cryptocurrency as a whole.
Love told the sharks:
“I thought, ‘Man, you know, anyone that’s trying to invest in cryptocurrency has to go through all these steps to try to figure out how to buy it. And I thought there could be an easier way for it to be done.”
Bundil costs $3 per month or $24 per year. It connects to your chosen payment method and slowly grows your Bitcoin balance. For those cautious or cash-strapped, it and other similar methods are potentially the only realistic way to introduce themselves to the important new world that is cryptocurrency.
DexFreight, a blockchain start-up that is building a freight transportation platform using Rootstock (RSK), has announced that it successfully facilitated a shipment of frozen food between Medley and Sunrise, Florida. DexFreight’s smart contracts, which rely on the Bitcoin blockchain rather than the more-often used Ethereum, enabled the successful delivery and automated the payment to the carrier, Arel Trucking.
From their press release on the subject (emphasis added):
“For this first truckload shipment, dexFreight partnered with Netuno USA, one of the fastest growing seafood wholesalers, Arel Trucking, Inc., an asset-based motor carrier with over 180 trucks, and RSK, the first smart contract platform secured by Bitcoin. Funds for the transaction were held in escrow by the smart contract on the integrated RSK platform and were automatically released to the carrier upon delivery.“
This last part is perhaps the most important part for the trucking industry. In two respects, it represents major possibilities. The first respect is that carriers who down the road integrate the technology can be paid reliably. The second respect is that of transparency and competition. Although the platform is nascent, it could eventually develop into a thriving and competitive market where smaller outfits can compete for business they could not have previously procured due to the tendency of shippers to stick with who they know.
A merit-based system where real-time statistics of delivery times, damages, and the like would give any company an equal chance at competing for business. Moreover, smaller outfits that cannot necessarily wait weeks or months for contracts to be paid out would no longer have to do so, and bidding becomes a realistically easy process — potentially as easy as sending an e-mail.
The truckers appear to be excited about the prospect, with Arel Trucking CFO Robert J. Julia being quoted as saying:
“dexFreight solves the issue of false documentation by making our transactions with shippers completely transparent, and so we can get paid for the service we provided. This technology is the way of the future for the whole trucking industry.”
Decision to Use RSK/Bitcoin Instead of Another Token Platform
An immutable ledger such as the Bitcoin blockchain (or any blockchain with sufficient hashrate/security) presents important possibilities for various industries, especially those which involve the moving and tracking of physical goods. While on a consumer level this means knowing beyond a shadow of a doubt where one’s package is or where your home goods are when you move, on an industrial level this means a much more robust ability to track performance and productivity. Trucking and shipping companies in particular stand to benefit from the transparency of an immutable ledger.
A ledger in and of itself isn’t good for much beyond tracking transactions, generally of a monetary sort. However, when you build on smart contracts, basically anything is possible. This is the model that Ethereum followed, building the Ethereum Virtual Machine from the outset complete with its own Turing-complete programming language so that it could process more than just transactions.
The popularity of the Ethereum platform incentivized the development of numerous other token platforms, from NEO (general purpose) to WaltonChain (aimed at industries which use RFID tracking technology). It has also encouraged developers to create smart contract platforms which could harness the amazing power of the Bitcoin blockchain itself — possibly the most powerful computing platform in history (and perhaps one of the most expensive to use, historically speaking). RSK is one such platform, and it is the basis of the dexFreight application. Another option developers can consider is Qtum, which is the Ethereum Virtual Machine adapted to run on the Bitcoin network (the best of both worlds.)
Such platforms work in a similar way to Ethereum. The base token of the platform is required to operate smart contracts and applications on their network, and these are generally exchangeable for the blockchain’s native token — in the case of Rootstock, Bitcoin.
The dexFreight platform itself, as a service, plays an important role to both consumers and providers in the freight transportation industry. Firms can pay a fee to the dexFreight network to have the tokens they’ve earned exchanged into fiat cash. As a result, the barrier to entry is drastically lowered. Another important service that they are developing is the use of machine learning to help clients select providers.
“The way of the future for the whole trucking industry,” among several other industries, indeed.
It’s been 10 years since bitcoin creator Satoshi Nakamoto published his white paper on bitcoin, and the global economy hasn’t been the same since. The original cryptocurrency now boasts a market cap of more than $112 billion, while bitcoin’s dominance hovers at more than 53%.
But if you ask Nigel Green, founder and CEO of financial advisory firm deVere Group, which boasts $10 billion in AUM, the next 10 years will look a lot different than bitcoin’s first decade. He’s quick to attribute the “crypto revolution” to bitcoin, saying that it has changed the way money is transacted forever. Green’s outlook, however, is a mixed bag, with bitcoin’s “influence and dominance of the cryptocurrency sector” expected to “drastically reduce” while the value of the broader crypto market is poised to expand by 5,000%, which would attach a combined market cap of $20 trillion in the coming decade. Green stated in a press release:
“[While] I don’t wish to rain on anyone’s parade, I believe that Bitcoin’s influence and dominance of the cryptocurrency sector will drastically reduce in its second decade. This is because as mass adoption of cryptocurrency grows, more and more digital assets will be launched – by organizations in both the private and the public sectors. This will increase competition for Bitcoin and dent its market share.”
Ripple (XRP) and ETH to Steal Bitcoin’s Shine
Green, whose firm is based in Dubai but has offices around the world, pointed to other reasons for the forecast, such as better technology, features, and solutions to problems that competing cryptocurrencies will provide, coins like ripple (XRP) and ethereum. He told :
“I believe that…XRP will be one of the main digital assets to dent Bitcoin’s market share over the next few years due to its apparent focus on integrating with banks and other financial institutions.”
XRP already muscled ETH out of the No. 2 spot for cryptocurrencies on CoinMarketCap more than once this year, though it has since fallen back to the No. 3 spot. Meanwhile, despite the fact that ETH has fallen out of favor with the crypto community of late, Green remains bullish on the future though he falls short of calling for a “flippening” event.
“Another one would be its current main challenger Ethereum. This is because a growing number of platforms are adopting Ethereum as a means of trading; there’s an increasing use of smart contracts by Ethereum; and due to the decentralization of cloud computing.”
Even if bitcoin’s dominance fades, Green says there is a clear shift among retail and institutional investors away from fiat money and into crypto, one whose momentum will only intensify in the coming decade. As a result, he expects “the market will have grown beyond recognition when Bitcoin celebrates its 20th anniversary.”
Until recently, Germany’s Federal Financial Supervisory Authority (BaFin) classified bitcoin as a financial instrument, but a subsequent court ruling disclaimed this categorization and decided that the cryptocurrency does not meet this definition under the terms of the German Banking Act (KWG).
Bitcoin Unrecognizable to German Legal Framework
The Berlin Court of Appeal in September dismissed a criminal proceeding against the operator of a local bitcoin trading platform. The German enforcement had arrested the administrator for facilitating the trades of financial instruments like bitcoin without obtaining a BaFin permit. While the Berlin-Tiergarten had sentenced the accused for providing financial services, the Berlin Regional Court reversed the judgment, stating that BaFin misinterpreted the legal status of bitcoin. According to Mondaq, The 4th Criminal Division of Berlin Court of Appeal favored the regional court’s ruling, confirming that the German regulators extended the scope of criminal law to bitcoin without synchronizing it with the banking acts.
Citing Section 1(11) of the KWG, the appeal court stated that neither the central bank nor any public authority issues bitcoin. The digital currency lacks general recognition and a stable value that could allow its use to compare goods or services. Therefore, it cannot gain the status of units of account – or financial instruments — contrary to what was enforced by the BaFin in May 2018.
The judgment also shed light on the matters related to the sale and purchase of bitcoin in Germany. The court, reading Section 1(32), ruled that bitcoin trading is not subjected to permits or licenses, and consequently – per Section 1(54) – was not a criminal offense. Due to these facts alone, BaFin couldn’t extend the scope of criminal penalties on the accused.
The appeal court also criticized the financial regulator for crossing the boundaries of federal authorities, stating that it was not their responsibility “to exercise a modifying influence (in particular) on criminal laws.”
Regulatory Inconsistencies Deepen
The court ruling has deepened the inconsistencies in the ways each European country interprets bitcoin law. The European Union has passed a motion in 2016 that enabled taxation of cryptocurrency holdings, investments, and profits. The provision, however, didn’t settle any definition for cryptocurrencies as a whole. Individual countries in the Eurozone awarded bitcoin a legal status in their jurisdictions, but the digital currency never attained a particular Europe-wide regulatory framework for itself.
Jörg von Minckwitz, President of Bitwala, a blockchain banking service based out of Germany, believes each European country should get on the same page before writing the first bitcoin bill.
“In the past years, Bitwala has repeatedly spoken out in favor of legal clarity and a regulatory level playing field in the EU,” he said in a statement provided. “As digitization affects society across borders, this can only be done in unison. Currently, every EU country seems to have their interpretation, which results in regulatory arbitrage to the detriment of German consumers and innovators.”
BaFin, after the court ruling, cannot penalize people holding or trading cryptocurrencies unless it joins hands with lawmakers to create new legal provisions to modify the KWG. As for now, bitcoin and similar digital assets will be subjected to European regulations.
At a meeting with the US Securities and Exchange Commission (SEC) commissioner Elad L. Roisman, representatives from SolidX, VanEck, and CBOE presented five major reasons why the commission should approve the Bitcoin exchange-traded fund (ETF) filing of VanEck and SolidX.
VanEck, an investment management firm headquartered in New York that has decades of track record in the traditional finance sector and hundreds of ETFs filed under its name, outlined the following points the SEC should consider in approving its Bitcoin ETF:
- There now exists a significant regulated derivatives market for bitcoin
- Relevant markets – CBOE, bitcoin futures, OTC desks – are regulated
- Concerns around price manipulation have been mitigated, consistent with approval of prior commodity-based ETPs
- CBOE’s rules are designed to surveil for potential manipulation of Trust shares
- Promotes investor protection
Significant Volume and Trading Activity in the Futures Market
Previously, the SEC rejected the Winklevoss Bitcoin ETF primarily due to its reliance on a public cryptocurrency exchange in Gemini to find the base price of BTC. The SEC deemed cryptocurrency exchanges to be insufficiently regulated and liquid to handle an ETF.
As a response to the rejection of the Winklevoss Bitcoin ETF, ProShares and two other companies filed 9 ETFs, basing the BTC price of the ETFs on the futures market operated by CBOE and CME Group. At the time, the filling of ETFs by the three companies was considered a smart move as it considered the SEC’s concerns regarding cryptocurrency exchanges.
However, the SEC rejected the 9 ETFs and stated that the futures market is not of significant size to support an ETF.
During its presentation, VanEck, SolidX, and CBOE representatives told the SEC that the futures market is able to handle the operation of an ETF through the Depository Trust & Clearing Corporation (DTCC), which was especially relevant given the involvement of CBOE in the filing.
VanEck also emphasized that the approval of an ETF would reduce counterparty risk for investors and it would provide a simple solution for investors seeking price exposure, by increasing the stability of the market.
“As of now, no CCPs support the clearing of bitcoin Investors are left facing absolute counterparty risk. Such risks are often unacceptable to many investors An ETF provides a straightforward solution for investors seeking price exposure without facing counterparty risk, as the ETF would be cleared through DTCC Furthermore, in creations and redemptions, the Trust always requires APs and trading counterparties to settle their leg of the trade before the Trust will do so.”
The claim of VanEck directly supports the statement of SEC commissioner Hester Peirce, who previously stated that the current structure of the cryptocurrency exchange market only allows a selected group of investors with specific know-how and knowledge in the market to trade and benefit off of the liquidity in the market.
“This complexity means that only a very particular type of investor can pursue the diversification opportunities such assets can provide. Entrepreneurs are developing new products through which people can access cryptocurrencies indirectly or hedge their cryptocurrency holdings. Bitcoin futures, for example, began to trade recently,” she explained.
VanEck Has the Highest Chance
Throughout the past several months, analysts have given VanEck and SolidX the strongest chance of having an ETF introduced in US markets given the history of VanEck in successfully filing hundreds of ETFs with the SEC.
Over the past 24 hours, the crypto market has added $2 billion to its valuation, rising to $210 billion.
The Bitcoin price has experienced a slight increase in price from $6,370 to $6,430, supported by a minor rise in daily trading volume.
Still, the volume of the cryptocurrency exchange market remains weak, with the daily trading volume of Bitcoin remaining below $3.5 billion on Coinmarketcap and $2.42 billion on CoinCap.
XRP, the native currency of the Ripple blockchain protocol, has surged by around 3 percent on October 24, possibly due to the approval of Coinbase Custody by the New York Department of Financial Services to operate as a regulated custodian facilitating investments in Bitcoin, Ethereum, Bitcoin Cash, Ripple, and Litecoin.
“Coinbase Custody Trust Company will operate as a standalone, independently-capitalized business to Coinbase Inc. and will be held to the same compliance, security and capital requirements as traditional fiduciary custodial businesses like the DTC,” Coinbase Custody product lead Sam McIngvale said.
Same Trend For Months
Since August, the price trend of Bitcoin has remained in the range of $6,300 to $6,800, failing to break out of the $6,800 resistance level apart from one occasion in mid-September.
As such, technical analyst DonAlt stated that in a period of stability, rather than initiating high risk trades, it is safer to observe the market and the short-term price trend of Bitcoin.
“Updating the daily chart doesn’t really make much sense, it’s been the same thing for days now. That’s why you get the 4H chart with the zones I’m watching. Before any of these anything but longing S and shorting R makes little sense.”
Most traders in the cryptocurrency community echoed a similar sentiment, emphasizing that until the dominant cryptocurrency engages in a major price movement on the downside and the upside, it will be difficult for traders to predict the trend of the market.
“Look for longs in the lower 1/3 of the range and shorts in the upper 1/3 of the range. Rinse and repeat until it doesn’t work any more. It really can be that easy,” cryptocurrency trader Mayne said.
In previous weeks, when the price of Bitcoin made a move near the $6,700 to $6,800 range, the volume of the asset increased to around $4 billion, which it held relatively well throughout August and September.
Yet, over the past two weeks, BTC has struggled to see an increase in its volume, remaining below the $3.5 billion mark.
Where the Market Goes Next
Investors expect the prices of major cryptocurrencies to increase in the months to come, particularly in December, as interest towards the Bakkt BTC futures market rise prior to its launch.
In terms of market development and infrastructure strengthening, the cryptocurrency market is in an ideal position to initiate a short-term rally, supported by the months of stability demonstrated by BTC.
Still, due to the lack of momentum and trading activity in the market, the trend of major digital assets remains uncertain.
Australia is not likely to see a central bank digital currency (CBDC) any time soon as the country’s reserve bank is of the view that the existing system ‘works well’.
Speaking at this year’s Swift International Banking Operations Seminar (SIBOS) currently underway in Sydney, the assistant governor of the Reserve Bank of Australia (RBA), Michelle Bullock, said that the apex bank has yet to find a convincing reason to create a digital version of the Australian dollar.
According to the Financial Review, Bullock also added that the RBA is not interested in having a digitized version of the Australian dollar for domestic use since the system already works well and users don’t really need access to direct settlement in order for them to carry out transactions.
Burden of Proof
However, Bullock, pointed out that central bank digital currencies could play some limited specific roles though the fintech sector would bear the burden of proving the advantages of the new tech over existing systems.
“We do have more of an open mind on the issue of wholesale and whether or not central bank digital currencies should play a role in assisting with perhaps supply chains, cross border …” said Bullock. “But it remains for industry to demonstrate to us really why what we have got available in terms of payments systems, including those still coming on board, can’t actually deliver that already.”
Though untested, one of the touted benefits of CBDCs for central banks is that the technology would allow reserve banks to run negative interest rates and thereby overcome the monetary policy problem known as the zero lower bound. This is a problem experienced when interest rates are at or near zero thereby diminishing the capacity of the central banks to stimulate economic growth as a result of the resulting liquidity trap.
Flight to Safety
However, even though CBDCs could solve this problem, at least in theory, they may also complicate the management of monetary policy and liquidity for central banks in times of crises such as a bank run, per Bullock. This is because depositors would flock to a CBDC as they flee commercial banks seeking a ‘safe haven’.
“That would take liquidity out of the system and centre it in the central bank,” said Bullock. That might make the management of liquidity and monetary policy more difficult in those circumstances.”
RBA’s stance on CBDCs stands in contrast to several central banks spread across the globe which are exploring the idea of digitized versions of their national currencies. As previously reported by CCN, this includes Thailand under an initiative known as ‘Project Inthanon’. Others are Norway and Sweden, two Scandinavian countries which are currently grappling with a problem of low cash usage levels. The Bahamas and Canada are also exploring CBDCs.
While a majority of crypto-related news is sculpted for public consumption, in juxtaposition to the transparency that public blockchains provide, recently-released documents from the U.S. Securities and Exchange Commission (SEC) indicate that a paramount closed-door meeting recently occurred.
VanEck: Our Bitcoin ETF Issues Have Been Resolved
Two weeks ago, stowed far away from the prying eyes of the crypto public, the SEC and a number of representatives from CBOE Global Markets, VanEck, and SolidX convened to further the conversation surrounding Bitcoin exchange-traded funds (ETFs). While this meeting went undisclosed for an extended period of time, on Tuesday, exactly 14 days after this fateful occurrence, the financial regulator released VanEck’s slide deck, coupled with a memorandum of the event, to give the public some insight on this closed-door meeting.
The memorandum revealed that the meeting, which occurred on October 9th, was attended by Commissioner Roisman, who has been classified as “pro-crypto” by some, four legal counsels, and five representatives from the three aforementioned finance-focused firms.
In the 11-part slide deck, New York-based VanEck, which has been working on a Bitcoin ETF with SolidX Partners since 2017, explained the history and status of the collaborative effort between itself and SolidX. Establishing that it is qualified to propose a crypto-backed ETF from the get-go, VanEck pointed it that it is a well-known fund issuer that manages $46 billion in assets.
Earlier this year, crypto investors across the globe were disappointed when the SEC delayed its verdict on a VanEck-backed Bitcoin ETF proposal for multiple months. Due to a variety of documents released by the regulatory body, it was widely believed that a lack of investor protection, market surveillance infrastructure, and liquidity led the body to not immediately release a verdict on the matter.
Now, in the midst of a key stage of the SEC’s decision-making process on the proposal, VanEck has claimed that the issues of yesteryear, which were outlined in previous disapproval orders, “have been resolved.”
Firstly, the slide deck revealed that its proposed ETF’s share price will be set at 25 Bitcoin a piece, or approximately $170,000 at the time of writing. This high barrier to entry has been set to seemingly calm the SEC’s concerns that the retail cryptocurrency sub-sector isn’t prepared to properly allocate capital to an ETF.
Then, knocking down the SEC’s most-pertinent concerns in one fell swoop, in a slide titled “VanEck SolidX Bitcoin Trust Should Be Approved,” the representatives from the firms noted that monumental progress has been made towards solving regulatory qualms. Most notably, VanEck claimed that there now “exists a significant regulated derivatives market for Bitcoin,” adding that CBOE’s rules dictate that market surveillance will be a priority in the proposed fund.
No comments from the SEC were issued on VanEck’s slide decks, but many investors are hopeful that the attendees of the forum were pleased with what was presented.
But still, almost as if this rendezvous flew under the radar of nearly every SEC agent, Commissioner Stein, who wasn’t in attendance, recently took to Bloomberg to express that ETF hopefuls will likely be fighting an uphill battle. Stein, whose tenure at the SEC is slated to end in December, told the media outlet:
“At the end of the day, whatever fund presents a concept to us will have to show how they can get accurate valuations, how they make sure that there is physical custody, and how to make sure that there is adequate liquidity, especially in a 40 act fund context, where investors can get the money when they need their money.”
Regardless, while Stein may have not acknowledged the gathering, contrary to popular belief, the cryptocurrency industry has seen its fair share of developments in recent weeks, even if the stagnating market has catalyzed traders to spin a different story.
The partnership’s announcement triggered a price spike of the blockchain project’s own token TaTaTu (TTU) on Tuesday.
Johnny Depp’s film-making company Infinitum Nihil has teamed up with TaTaTu, a cryptocurrency entertainment project of Italian-Canadian film producer Andrea Iervolino, US media reported on Monday. Depp’s firm will produce digital content together with the blockchain-based video on demand (VOD) platform.
The first joint project between TaTaTu and Infinitum Nihil is the adaptation of the world’s famous J.M. Coetzee’s novel “Waiting for The Barbarians.” The film will star Depp along with Mark Rylance and Robert Pattinson. Colombian filmmaker Ciro Guerra will be the director of the project, which production should begin later this month in Morocco.
“Johnny has the ability to conceptualize material in a way that few can, and is unburdened of conventional industry formulas that dictate the projects that get made, traditionally,” Iervolino said as quoted by Deadline.
Iervolino started TaTaTu at the end of last year. The project, which is in its beta version, rewards users with its own tokens TaTaTu (TTU) for watching videos, referring their relatives to the platform and voting for the future content.
TaTaTu has claimed that it sold $575 million worth of TTU during an Initial Coin Offering (ICO) pre-sale earlier this year. Prince Felix of Luxembourg, virtual asset venture company BlockTower Capital, and Bacardi rum heiress Monika Bacardi, who is a partner of Iervolino in film production company AMBI Media Group, backed TaTaTu.
AMBI Media Group is a co-producer of Depp’s first project with the cryptocurrency startup.
“In this era of democratized entertainment, I admire the imaginative ethos of Andrea and look forward to collaborating together in a liberating, progressive manner that will respect the principles of our respective entities,” Depp.
The deal between Infinitum Nihil and TaTaTu triggered a significant spike of TTU price nearly 24 hours after the announcement. TaTaTu changed hands at $0.13 per coin, which was an increase of 18.44% on a daily basis as of 10:54 UTC on Tuesday.
The project clocked $159, 426 million in trading volume from two markets, HitBTC and Liqui, as per Coinmarkertcap data. HitBTC TaTaTu pairs with Bitcoin (BTC), and Ethereum (ETH) accounted for $102, 491 (more than 64%) of it while Liqui trading in BTC, ETH, and Tether (USDT) achieved $56,935.
Currently, TaTaTu coin ranks number 302 in the market capitalization list with nearly $13 million in value.
Japan’s primary financial regulator has formally granted the cryptocurrency industry with a self-regulatory status by allowing an industry body to police domestic exchanges.
The Financial Services Agency (FSA) on Wednesday approved the Japan Virtual Currency Exchange Association (JVCEA), a body comprised of all 16 licensed domestic cryptocurrency exchanges, to become a ‘certified fund settlement business association.’
In doing so, the regulator has bestowed the industry body with the means to create guidelines for domestic exchanges including strict measures to curb insider trading and money laundering while implementing security standards to safeguard customer assets.
The industry association confirmed its accreditation in a statement today, stressing it has “enforced self-regulation rules on the same date.”
“With the acquisition of the accreditation, we will continue to make further efforts to create an industry that you can trust from everyone who uses virtual currency with members [exchanges].”
The FSA’s approval comes at a time when Japanese authorities are reviewing their own regulatory approach toward the industry in the aftermath of two seismic crypto thefts this year.
This story is developing and will be updated shortly.
Indian cryptocurrency trading platform Unocoin has found itself amidst heated controversy over the launch of its first cryptocurrency kiosk in Bengaluru. While the existence of the machine had already been leaked prior, the company officially unveiled it roughly ten days ago, on October 14. This is the first time that a physical machine has aided the purchase and sale of cryptocurrency in India
Unlike other Bitcoin ATMs installed around the world, the kiosk is only accessible by users that have previously registered with Unocoin’s trading platform. As long as that requirement is satisfied, users can use the machine to deposit or withdraw a minimum of 1,000 Indian Rupees (INR) per transaction. In the case of cash deposits, these funds can be used to trade or purchase digital currencies on Unocoin or the company’s crypto to crypto trading platform, Unodax.
Crypto Kiosk or Bitcoin ATM
Shortly after the kiosk went live, however, questions regarding the machine’s legality began pouring in from local publications and social media. Most of the concerns had some merit, given the Indian financial regulator’s strict stance on cash handling, ATM establishment and cryptocurrency trading. However, other rumors were vaguer and alleged that the machine was being investigated by the Indian cyber cell division.
The sudden influx of criticism naturally did not go unnoticed by the company. A Twitter statement published October 21 read:
“Our Machine didn’t go well with few mainstream media reports who projected it under a negative light. The machine is still under final testing mode and it will be up and running in the upcoming week.”
Following this, the company proceeded to move the machine to an undisclosed location, presumably to avoid further backlash in the interim.
We reached out to Unocoin CEO Mr. Sathvik Vishwanath to understand the company’s position on the matter and how it has managed to stay within the confines of the law. He responded that the machine has been intentionally designed to not function as a typical automated teller machine (ATM). He instead believes that the term ‘kiosk’ would be better suited for Unocoin’s installation. According to Vishwanath, the distinction allows the machine to fall outside the scope of the banking network and by extension, the regulation on ATMs.
Vishwanath chose to not comment on the rumors, asserting that they were unsubstantiated and were not grounded in reality. When asked about plans for expansion in other parts of the country, he said that Unocoin will look into adding more kiosks in Mumbai and Delhi in due time.
The Revival of Crypto Trading in India
Digital currency trading was effectively dealt a huge blow earlier this year by the Indian central bank, Reserve Bank of India (RBI). After issuing several cautionary circulars between 2013 and 2017, the regulator directed all financial institutions operating in the country to cease relationships with cryptocurrency companies within a three month time frame. Since the ban came into effect on July 6, Indian cryptocurrency exchanges have not had access to banking services or a way to process crypto-fiat transactions.
Unocoin was one of the several cryptocurrency exchanges affected by the ban. Shortly before the regulation was fully imposed, however, it announced the launch of Unodax, a crypto-crypto trading platform that eliminates the need for fiat currency. However, other exchanges decided to introduce peer to peer trading to continue providing fiat liquidity. Structured similarly to LocalBitcoins, both WazirX and Koinex Loop offer users the ability to buy and sell cryptocurrency directly from each other. Notably, both platforms require their respective users to complete KYC verification.
Investing in Initial Coin Offerings (ICOs) in Taiwan could soon be as easy as putting money in stocks.
This is according to the chairman of Taiwan’s Financial Supervisory Commission (FSC), Wellington Koo, who has said that regulations for governing ICOs are currently being drafted with a view of simplifying the process for investors as well as making tokens just as liquid as stocks.
Speaking during a finance committee meeting of the country’s legislature, Koo also revealed that the draft copy of the regulations will be ready by mid next year, according to the Taipei Times. This was after a legislator, William Tseng, asked whether the Taiwanese government was planning on regulating ICOs.
Alarming Levels of Fraud
Tseng was prompted by a report that was released earlier in the year by Satis Group, an ICO advisory firm, which claimed that 81% of ICOs had turned out to be scams.
The planned ICO regulations will, however, not apply to all tokens. Notably, the Financial Supervisory Commission will spare utility tokens as it has no intention of regulating them.
“…tokens exchanged for goods, such as those used in accruing points at convenience stores or mileage points accepted by airlines, would not be covered by the standards,” wrote the Taipei Times.
According to Koo, this is to prevent enacting legislation that would discourage innovation in the nascent sector.
“The commission has no intention of curbing the creativity and productivity associated with cryptocurrencies if they are not used as securities,” said Koo.
During his tenure as the chairman of the FSC, Koo has mostly been supportive of the cryptocurrency sector. A year ago, for instance, the FSC chairman told the Taiwanese parliament that he would not place outright bans on crypto-related activity in the country like had been the case in other countries in the region such as China and South Korea. At the time Koo indicated that he preferred having an enabling environment that would boost the development and adoption of blockchain technology and cryptocurrencies in Taiwan.
Koo’s position was similar to that of Taiwanese legislator Jason Hsu, who had called on the government to follow a different path to that of China and South Korea.
“Just because China and South Korea are banning, doesn’t mean that Taiwan should follow suit – there is a huge opportunity for growth in the future. We should emulate Japan, where they treat cryptocurrency as a highly regulated, highly monitored industry like securities,” a Taiwanese publication quoted Hsu as saying at the time.
As the days draw closer to the scheduled Bitcoin Cash upgrade, affiliated organizations are preparing for the hard fork. Data websites like Coin Dance have added statistics for feature support, upgrade voting, and public opinion. Meanwhile, the Nchain-backed SV-Pool has officially announced that its pool is now open to public miners.
SV-Pool Goes Public
The Bitcoin Cash hard fork slated for Nov. 15 is getting closer and network participants are preparing for the upgrade in several ways. On Oct. 22, the mining initiative SV-Pool, supported by Nchain and the firm’s chief scientist Craig Wright, announced the pool is now open to the public. This means that Bitcoin Cash miners can direct their hashrate towards the SV-Pool and get paid by an initial pay-per-last-n-shares (PPLNS) system. The pool details it plans to add more payment structures this November. At the time of writing, according to Coin Dance statistics, SV-Pool has been capturing around 2.6 percent of the global BCH hashrate over the last seven days.
According to the pool’s recent announcement, SV-Pool says it stands by a “miners’ choice, miners first philosophy.” During that time, the Bitcoin SV team launched its codebase and the Bitcoin Unlimited (BU) team also launched a new client. The latest BU code is prepared for the Bitcoin ABC team’s ruleset changes and the team stated on Twitter that SV ruleset compatibility was “pending.” BU’s plan is to let the miners vote for features by using a system called the BIP135 bits standard.
Explicit Mining Pool Support and Public Opinion
Following the recent announcements concerning new clients and BIP135, the statistical data website Coin Dance has prepared its website for things like explicit mining pool support by proposal and a new politics and public opinion section. The explicit mining pool support section, which seems to incorporate the most important data to most BCH proponents, currently says that “Voting should begin shortly.” The politics and public opinion section is a different story as it shows a list of BCH-supporting businesses and organizations revealing specific proposal stances.
As of Oct. 23, there are 15 organizations listed on the page which Coin Dance details is a “weighted community-managed support breakdown by company for each active Bitcoin Cash proposal.” The three choices include support for BIP135, Bitcoin SV, and Bitcoin ABC’s ruleset proposals. Companies and organizations represented on the list include Bitcoin ABC, Unlimited, XT, Cryptograffiti, Coingeek, Nchain, Coinex, Blockchain Ventures, and more. People visiting this weighted support breakdown can see whether or not each firm supports a certain ruleset proposal. Coin Dance is allowing company submissions and a form can be filled out that requires the organization to be publicly accessible, indicate explicit choices, and source references.
There are only 23 days left until the scheduled hard fork, and so far it is hard to determine how the upgrade will play out, even for those constantly watching and listening to the BCH community. Most BCH supporters are more concerned with the miners’ explicit decisions over a weighted community-managed poll system. Miners don’t have to run BU in order to vote using the BIP135 bits standard, as they can also set the bits in their block version fields using mining pool software.
Indian police force in the city of Bangalore has raided an ATM operated by local cryptocurrency exchange Unocoin just weeks after it was set up.
The Times of India said in a news report on Wednesday that Harish BV, co-founder and chief technology officer of the Unocoin exchange, was arrested on Tuesday as he was operating the ATM which was installed in a shopping mall and revealed on Oct. 14.
According to the report, the Central Crime Branch of the local police seized the ATM, two laptops, a mobile, three credit cards, five debit cards, a passport and Indian rupees worth about $2,500.
Unocoin is one of the several cryptocurrency exchanges in India that have survived a bank ban issued early this year by the Reserve Bank of India (RBI), the country’s central banking authority.
As domestic banks stopped offering financial services to cryptocurrency exchanges, Unocoin launched the ATM that would allow investors to directly deposit Indian rupees to their accounts with the exchange. The company said last week it was planning to open several more ATMs in Mumbai and Delhi.
Yet, the police claimed Unocoin is not authorized to operate this type of ATM.
In another news report from Bangalore Mirror on Wednesday, Alok Kumar, a commissioner from the Bangalore city police was quoted as saying:
“They [Unocoin] did not have any license from RBI, Sebi [Securities and Exchange Board of India] or any other agency to carry out the bitcoin transaction. They were running it without obtaining any trade license from the BBMP [Bangalore government].”
However, Unocoin’s co-founder and CEO Sathvik Viswanath, denied this accusation, saying in the Times of India report:
“The [Finance] Minister’s statement was clear: cryptocurrencies are not legal tender in India. He did not say ‘illegal tender’. There’s a huge difference. It means you bear the risk of your investment and there’s no regulation for the industry.”
Twitter took the unusual step of locking Elon Musk’s account yesterday after the billionaire Space X and Tesla founder posted a lighthearted tweet asking a follower if they would like to buy bitcoin. Revealing this in a tweet posted earlier today, Musk said:
Twitter thought I got hacked & locked my account haha
— Elon Musk (@elonmusk) October 23, 2018
Musk made the tongue-in-cheek quip about offering bitcoin for sale in response to a question from a follower about whether Tesla accounts would soon begin utilising 2-factor authentication for added security. The joke was made in reference to the 2-factor authentication security protocol commonly deployed by crypto trading platforms like Coinbase and Circle, but Twitter apparently did not see the funny side of it. His account was temporarily locked on suspicion of being hacked while the platform investigated and eventually unlocked it.
Elon Musk and Twitter
Over the past few months, Musk has faced a series of controversies linked to his activity on Twitter. His declaration that he could take Tesla private for $420 a share which he made on Twitter ultimately landed him in trouble with the SEC, leading to a $20 million fine and an order to step aside as Tesla chairman for at least 3 years. He also famously got into a war of words with a diver involved in the Thai cave rescue, describing him as a paedophile – an action that led to legal action on the part of the diver.
Earlier in October, following the settlement of his case with the SEC, Musk also took a dig at the agency, describing it as the “Shortseller Enrichment Commission”.
Just want to that the Shortseller Enrichment Commission is doing incredible work. And the name change is so on point!
— Elon Musk (@elonmusk) October 4, 2018
A number of people, ranging from Tesla investors to fellow billionaire Richard Branson have publicly urged Musk to stop tweeting, believing that his sometimes erratic behaviour on the platform could have a significantly negative investment impact on them. Indeed, it is estimated that his tweet that originally drew the SEC’s attention ultimately led a Tesla share price loss of more than 10 percent in the space of just one day. His followers however generally like engaging with him on the platform and he currently has more than 20 million mostly millennial followers, making him one of the most influential tech personalities on social media.
Against this backdrop, Twitter is understandably keen to avoid having his account being used as a megaphone by cybercriminals promoting shady investments or crypto giveaway scams. The Vertcoin ICO’s twitter account was successfully hijacked by criminals promoting a fraudulent crypto giveaway scheme, and since then several celebrities have been targeted either by hijackers or by botnets using account cloning techniques.
People Capital, the venture capital arm of People’s Daily Online — the official newspaper of the Chinese Communist Party — has signed an agreement with Xunlei Limited to use the blockchain technology for innovation and to empower the Chinese economy and the world at large. The alliance between the companies is part of a global partnership agreement signed earlier this year at the China-US Entrepreneur and Investment Summit, hosted by People’s Daily Online in the United States.
People’s Daily Online is the online version of China’s largest newspaper, The People’s Daily, through which the Communist Party distributes its unfiltered views on contemporary events.
Also known as the “BitTorrent of China,” blockchain infrastructure provider Xunlei Limited started as a cloud computing company before pivoting to the blockchain technology industry. The company launched a distributed file system called The ThunderChain File System (TCFS) and ThunderChain Open Platform in July as an underlying technology to support DLT platforms.
Under the partnership, People Capital and Xunlei will build a blockchain laboratory which will be used to explore meaningful use cases for blockchain technology across various business sectors. In addition to the laboratory, the alliance will see the creation of a service platform for organizing offline fintech events, workshops, and competitions to share, identify, and promote innovation in DLT startups.
The laboratory will be under the purview of People Capital’s Blockchain Research Institute, which serves as a research platform focusing on distributed ledger technology. Speaking on the announcement, Xunlei CEO Lei Chen said the partnership highlights the company’s focus on research and development of blockchain-related technologies and the ecosystem as a whole. He also commented on the company’s ThunderChain, which it says would be developed further and launched on a mainnet.
The ThunderChain Open Platform is a decentralized file storage system, which Xunlei claims can process “over 1 million transactions per second and is embedded with strong scalability and stability.”
Last month, reported on the launch of the world’s first blockchain identity laboratory called the Blockpass Identity Lab. Launched as part of a £600,000 collaboration between Hong Kong-based blockchain-based identity firm Blockpass IDN and the Edinburgh Napier University, the research facility will apply distributed ledger technology toward the protection of personal data.
Taiwanese consumer electronics giant HTC has officially launched its first blockchain phone, which will be sold exclusively in crypto.
Called Exodus 1, the blockchain mobile phone of HTC is available to consumers at a fixed price of 0.15 Bitcoin (ETC) and 4.78 Ethereum (ETH), nearing the price of the new iPhone XS that has a starting price of $999.
The Exodus 1 is sold at around $975 based on the current price of Bitcoin at $6,500. However, as the price of BTC rises, the price of the phone will also increase substantially. BTC was valued at $10,000 less than four months ago, and if BTC reaches the $10,000 resistance level in the months to come, the value of the Exodus 1 could surge to $1,500.
Why Pegged to BTC and ETH?
The primary feature of the Exodus 1 is its security. It has been developed to operate as a hardware cryptocurrency wallet, allowing users to safely store digital assets in the local wallet of the phone.
In July, Samsung, the largest electronics manufacturer in Asia, revealed that mobile phones are significantly more secure in processing cryptocurrency payments than alternative devices and platforms such as desktop and the web because of the existence of a trusted ecosystem called the Trusted Execution Environment (TEE).
With TEE in place, which operates as a separate execution environment with its own memory and storage, it is not possible for hackers to breach into protected information stored within the TEE ecosystem in the event of a hacking attack or a security breach.
“This is why smartphones have an edge over laptops and desktops for cryptocurrency wallets: without the benefits of the hardware-based TEE, the keys are more vulnerable. There is a significant caveat: a naïve wallet developer might choose to simply store the keys on the normal internal storage of the phone, in which case there’s little additional protection from using the smartphone platform,” Joel Snyder, a senior IT consultant at Samsung Insights, explained.
Exodus 1 of HTC leverages this ecosystem along with several other security features in a mobile phone to create a secure environment for cryptocurrency users.
In regards to the decision of the company to sell the device exclusively in crypto with price pegged to BTC and ETH, Phil Chen, head of HTC’s blockchain initiative, told Hong Kong-based mainstream publication SCMP said that the company only intends to sell the device to the core audience that is the global blockchain community.
“Selling it in crypto only and being the first to do so means we are bringing this directly to the core audience and those who will want this device – the blockchain community. It reflects our belief in cryptocurrencies – in fact we had to recreate and overcome many processes internally, as well as find new distributors, so that we can achieve the goal of only accepting cryptocurrencies as the form of payment.”
In the months to come, if the price of BTC and ETH rise or decline by a large margin, HTC is expected to adjust the price of its mobile phone to maintain a realistic price tag which its consumer base can afford.
Images from HTC Exodus
Unikrn, an esports company that raised over $15 million in its ICO pre-sale last year, has obtained a betting license in the Isle of Man, which is a key step on the way to rolling out its cryptocurrency betting service around the world.
The startup raised $15 million from accredited investors including Mark Cuban, Ashton Kutcher, Elisabeth Murdoch, Guy O’Seary, Shari Redstone, Binary, Hyperspeed, Indicator Ventures, and Tabcorp, en route to a $32 million token sale, according to TokenData.
When the platform launches, users will be able to place bets on esports events, teams, and players. They will also be able to bet on their own performance in popular esports games like Fortnite, League of Legends and Dota 2.
Unikoin Gold and Unikrn Jet
Using infrastructure provided by Bittrex, users will be given the ability to seamlessly take part in betting and gaming activities using cryptocurrencies on the platform. Unikrn’s native cryptocurrency, UnikoinGold (UKG) will be deployed on the platform to give users access to exclusive benefits, as it seeks to become recognised as the default esports wagering token in more than 20 countries including 80 percent of Europe and parts of Asia and Latin America.
Speaking about the user experience on Unikrn, Andrew Vouris, the firm’s COO, said:
“This is long in the making. You can bet in fiat, crypto, or both, to bet on live markets or pre match for twenty titles and dozens of games a day on titles such as League of Legends, Dota and Fortnite.”
According to information released by the company, Unikrn has developed a fully functional wagering backend called Unikrn Jet, which is built on blockchain technology and can process over 9,000 bets per second. Unikrn Jet is already live for the platform’s play token economy and is ready for immediate deployment for regulated crypto and fiat betting.
Speaking about Unikrn Jet and Unikrn’s Isle of Man license, Unikrn co-founder and CEO Rahul Sood said:
“Unikrn built the most advanced wagering backend in the world, built by incorporating blockchain technologies, and we’re entering a segment of the global games market which exceeds $30 billion. Equally historic for esports, wagering and blockchain, we’re the first company on the planet to launch with a license including crypto and fiat betting from the Isle of Man, which is home to one of the most respected regulators for gambling.”
According to the company, live betting for esports and gaming competitions on the platform will be launched in October for both fiat and crypto customers. Using the transaction engine provided by Bittrex, users will also have a frictionless transaction experience when converting their fiat or crypto to UKG.
Coinbase has made yet another pioneering move in the regulatory morass that is cryptocurrency. The company today announced that its institutional wing, Coinbase Custody Trust Company, has received approval from New York State regulators to operate as an “independent Qualified Custodian.”
Coinbase May Operate as Qualified Custodian
A qualified custodian operates similarly to a bank, so much so that it is sometimes referred to as “custodian bank,” in that it is authorized to hold money for other people. In general, the purpose of a custodian is to minimize theft and/or loss of funds. Coinbase is among the first cryptocurrency firms to achieve this status, with BitGo having recently received approval from the South Dakota Division of Banking to operate as a qualified custodian as well.
Coinbase Custody Trust Company is legally a separate company from Coinbase. This means its funds and accounts will be organized separately from existing capital and funds held by Coinbase.
The move does not affect everyday users of Coinbase products, although larger holders may find they have new options and products available to them in the coming months. It remains to be seen if Coinbase will seek approval from other jurisdictions, such as the EU, for similar licensing. According to the New York Department of Financial Services announcement, the firm is also legally authorized to protect crypto assets.
According to Coinbase, this is an important addition for their clients, the vast majority of whom use the firm to be sure they are legally transacting in the cryptocurrency space. On their blog, the company wrote:
“For our customers, operating under a New York State Trust Company is more than just a new license — it’s an important piece of regulatory clarity that will allow us to compliantly store more assets and add new features like staking.”
The keyword here is compliance. While many in the Bitcoin community still take issue with the “Bitcoin bank” business model or the influx of traditional financial operators into the crypto space, plenty of newer converts and people interested in cryptocurrency have a much greater fear of government reprisal for the unregulated use of cryptocurrencies. The move also adds a degree of accountability to Coinbase in terms of holding a great deal of currency — with the new services they can offer larger clients they also now have a new range of penalties and investigative angles they are open to.
Cryptocurrency No Longer a Fringe Asset
Not so many years ago, to invest in Bitcoin was widely considered either foolhardy, overly idealistic, or downright outlandish. Today, however, there is no major financial firm nor entity which has not taken note of the plane-shifting asset class. The majority of them have active plans in place to deal with the new reality: blockchains are here to stay, and the tokens that power them are mighty valuable. Folks like veteran banker Jamie Dimon may continue to disparage cryptos while quietly strategizing to profit from them, but today’s smart money knows better than to believe his epithets.
Coinbase has, since its inception, understood what cypherpunks might prefer to minimize or ignore: Bitcoin and other cryptocurrencies have the best chance of survival when governments do not actively have them in their crosshairs. The establishment and licensure of Coinbase Custody is only the company’s latest move in line with this philosophical realism.
Makaveli Lindén, the primary suspect in the gruesome murder of 24-year-old Norwegian bitcoin investor Heikki Bjørklund Paltto, is in police custody following a successful international manhunt.
Swedish news outlet Aftonbladet reports that Oslo police have confirmed that Lindén, 20, has been captured more than a week after he allegedly stabbed Paltto to death in the latter’s apartment in Oslo’s Majorstuen neighborhood.
Lindén, a foreign national residing in Uppsala, Sweden, had fled Norway following the murder, allegedly returning to his home city before leaving Sweden as well. According to local reports, the suspect was ultimately arrested in France, though Norwegian police have not yet confirmed this publicly.
Initially, the crime appeared connected to Paltto’s cryptocurrency investments, which had reportedly made him hundreds of thousands of dollars in profits. Sources within the local police department said that he had sold a large amount of bitcoin shortly before the murder, and other sources said that he may have been planning to use the funds — which he was keeping in his residence — to purchase an apartment.
However, Lindén’s alleged involvement in the incident has led police to believe that Paltto may have just been a random victim. The 20-year-old suspect, who had a long rap sheet related to theft and drug abuse convictions, is also alleged to have committed another robbery at knife-point not far from the murder scene.
The Bitcoin price has fallen to the $6,300 region after failing to retain momentum in the $6,400 to $6,500 range.
The volume of the dominant cryptocurrency has experienced a minor recovery from $3.1 billion to $3.6 billion across major cryptocurrency exchanges. Yet, regardless of the settlement of seven consecutive weekly candles in the low $6,000 region, it is struggling to demonstrate any promising price movement on the upside.
Price Surge by the End of 2018 is Important
Due to the low trading activity in the Bitcoin exchange market, it will be challenging for the asset to initiate a short-term rally without the initiation of a sudden surge in price.
Months of stability often create a strong platform for an asset to engage in a strong upside movement but for BTC, its inability to comfortably breakout of a major resistance level at $6,800 since August 9 can be considered as a concerning indicator to traders in the market.
“If BTC can initiate a breakout above the $6,600 mark and potentially eye a move towards the $6,800 resistance level, then a bullish short-term trend can be confirmed. However, if it continues to show low volume and trading activity in the $6,300 to $6,500 range, it will be challenging for BTC to initiate a big spike,” the report read.
The failure of BTC to pass major resistance levels in the weeks to come could establish a dangerous precedent for the rest of the year. As cryptocurrency technical analyst who operates with the alias “Altcoin Thoreau” said, BTC could record a negative year-over-year performance for the first time in its history.
“One year ago October 21st 2017 was first time that $BTC went over $6000. If Bitcoin price stays in current range November 1st, 2018 will be the first time where Bitcoin’s price is negative on year over year basis.”
It is of utmost importance for the market to refrain from entering 2019 with negative sentiment, as it could extend the bear market throughout the first two quarters of next year.
With the launch of NYSE parent company ICE’s Bakkt Bitcoin futures market on the horizon, a recovery in the price of BTC is expected.
“ICE Futures U.S., Inc. will list the new Bakkt Bitcoin (USD) Daily Futures Contract for trading on Wednesday, December 12, 2018. The Bakkt Bitcoin (USD) Daily Futures Contract is a physically-settled daily futures contract for bitcoin held in Bakkt LLC, ICE’s Digital Asset Warehouse, and will be cleared by ICE Clear US, Inc,” ICE said.
In July, Coinbase disclosed its interest to list five digital assets including 0x, BAT, Zcash, Cardano, and Stellar.
The integration of 0x has led investors to speculate on the potential implementation of BAT, a token that is utilized as the native cryptocurrency of the Brave Browser.
However, due to the lackluster short-term price performance of BTC, the rest of the cryptocurrency market has struggled to demonstrate any positive signs of short-term rally.
A decade on from the launch of the first ever Android phone, Taiwanese consumer electronics giant HTC has taken the wraps off its blockchain-powered smartphone, dubbed ‘Exodus’.
HTC has officially announced the early access release of Exodus 1, the company’s first-ever blockchain phone. Available for preorder on its website, the phone will ship sometime in early December and can only be purchased using cryptocurrency, specifically bitcoin and Ethereum.
Genesis Block. Exodus Phone.
This is official early access release to the EXODUS 1. We are inviting a community of developers and enthusiasts to work with us to keep building security. Join us in rebuilding trust together, one phone at a time. Get your early access now! pic.twitter.com/sPcNc7wnzj
— HTC EXODUS (@htcexodus) October 23, 2018
With a 6-inch, QHD+ display at an 18:9 aspect ratio and a Snapdragon 845 processor with 6 GB of RAM and 128 GB of internal storage, the Exodus 1 also packs a 3,500mAh battery with IP68 waterproof rating, comparable to mainstream Android flagships currently sold in the market by Samsung and Google and other mainstream phone makers. The device is being sold at 0.15 BTC or 4.78 ETH, about $960 – also comparable to the Samsung Galaxy Note 9 or the Google Pixel 3 XL.
Announced with much hype as the ‘world’s first native blockchain phone’ earlier in May, HTC Exodus enables support for decentralized applications (DApps) like CryptoKitties and doubles as a hardware wallet for cryptocurrency adopters.
The phone’s “secure enclave” – a locked area secluded from the rest of the phone and the Android operating system – holds the user’s private cryptocurrency keys, HTC explained. Further, a ‘Social Key Recovery’ mechanism allows the user to regain access to their crypto funds in the event of losing their private keys by picking select trustworthy contacts.
HTC is inviting cryptographers to test the early access version of its device and is also releasing APIs for third-party developers.
Speaking to CNBC, HTC’s decentralized chief Phil Chen stated:
“We believe blockchain is the new paradigm for smartphones and it will form part of HTC’s wider smartphone strategy. This marks a change in HTC, with increased focus on software and IP.”
The phone is available for pre-order in 34 countries including the US, the UK, Hong Kong, Singapore and a number of European nations, with the notable exception of China, where cryptocurrency trading and exchanges are effectively banned.
The HTC Exodus already has a competitor in its niche category, with Swiss startup Sirin Labs expected to release its own $1,000 blockchain smartphone Finney – to be manufactured by iPhone-maker Foxconn – before the end of the year.
Images from HTC.
Cayman Island-based fintech startup Caspian has completed an eight-figure ICO ahead of schedule.
Founded earlier this year, Caspian ties together the biggest cryptocurrency exchanges in a single user interface. The full-stack crypto asset management platform also offers compliance, algorithms, portfolio management, risk, and reporting. Its co-founders David Wills and Robert Dykes plan to channel 40 percent of the raised $19.5 million towards research and development.
The other 25 and 15 percent would go towards sales & marketing and application support, respectively. The founders have also allocated a considerable sum towards building new partnerships, managing accounts and legal, and miscellaneous administration costs.
The news arrives at a time when a majority of ICO rounds have failed to raise capitals for their blockchain projects. The bearish mood of the crypto market has further made it difficult for projects to attract funds. Caspian nevertheless has managed to strike the right chords among investors for plenty of reasons.
Clients and Partners
Caspian is serving to the need for tools that could simplify crypto trading for an always-rising influx of investors. The platform explicitly targets institutional grade users, including crypto trading companies and hedge funds. Fidelity Investments, for instance, will be integrating the Caspian crypto asset management solution into its custodial solution. The company would utilize the platform to manage its customers’ digital assets, believing it would be more intuitive and user-friendly for their kind of work.
Including Fidelity, Caspian revealed that around 170 customers are waiting to sign up on their platform. The company has already added 15 names to its onboarding process, including Lykke, Bletchley Park, and ex-Point 72 manager Travis Kling’s Ikigai Asset Management. Caspian has also added 15 global institutions, including Techemy, Blockstars, OSL, and Galaxy Digital, which are live and trading on its platform.
US-based crypto exchanges Coinbase and Gemini have also entered a strategic partnership with Caspian, which will enable them to offer its sophisticated trading and portfolio management functionalities to their customers. Hong Kong-based p2p crypto exchange BitMEX has also integrated Caspian for the same services.
Notable crypto figures like Mike Novogratz, Mona El Isa, and Ari Paul have also joined the Cayman Islands startup as advisors.
“Cryptocurrencies will play an increasingly big role with institutional players, yet to date, the sophisticated trading and portfolio management tools have not been available for this asset class,” Mona predicted. “It is exciting to see Caspian fill this gap with high-quality crypto-tools.”
Caspian will see a full-launch by the first quarter of 2019.
The investment fund owned by the Government of Singapore is funding Binance, the world’s largest cryptocurrency exchange, toward its expansion in the city-state.
Vertex Ventures, a subsidiary of Singapore’s sovereign wealth fund Temasek Holdings, has announced ‘a strategic investment in Binance’ that will see the two entities jointly establish Binance Singapore in the country.
The funding will enable Binance in building a fiat-crypto exchange in Singapore and support its expansion for ‘other fiat-crypto gateways and services throughout Southeast Asia,’ the venture fund said on Tuesday.
Specifically, the investment is a joint effort between Vertex Ventures China and Vertex Ventures Southeast Asia & India. The venture capital arm of Temasek Holdings – Singapore’s sovereign wealth fund which owns and manages a net portfolio of over $300 billion – Vertex Ventures is a global network of operator-investors who manage portfolios in the U.S., China, India, Israel, and Southeast Asia.
Binance chief executive Changpeng Zhao – commonly referred to as CZ – announced the beta launch of Binance’s expansion to Singapore with a fiat-crypto exchange locally.
‘Changpeng Zhao is one of the most well-respected entrepreneurs in blockchain with high inspiration to build and promote the blockchain ecosystem,” remarked Vertex Ventures China managing partner Choon Chong Tay. “He represents the new generation of China-originated entrepreneurs building products for the world.”
We look forward to working with Changpeng Zhao and his team to drive innovation in the space while building a sustainable and compliant platform in Singapore,” added Joo Hock Chua, Managing Partner at Vertex Ventures Southeast Asia & India.
Details of the investment in figures have not been revealed.
As warned earlier in the year by legal experts that celebrity ICO endorsers could face court action in future, it has now come to pass as a lawsuit has been filed against two of the more prominent ICO social media influencers of last year.
According to celebrity news publication TMZ, a class action lawsuit has been slapped against music producer DJ Khaled and boxing champion Floyd Mayweather. The suit has been filed by individuals who lost their money by investing in the Centra Tech initial coin offering. The two prominently endorsed the Centra Tech ICO on social media platforms with Khaled calling it a ‘game changer’ while the boxing champ even nicknamed himself ‘Floyd Crypto Mayweather’, ostensibly fully convinced of the ICO’s prospects.
In their suit, the plaintiffs allege that partly as a result of the efforts put in by Mayweather and Khaled, Centra Tech managed to raise approximately US$32 million in the ICO which was floated last year. The plaintiffs are now seeking to be compensated for their losses plus damages by the founders of Centra Tech as well as by the celebrity endorsers and promoters.
ICO Operators Indicted
The class-action lawsuit now raises the stakes for the founders of Centra Tech who were indicted with four counts of fraud (securities fraud, conspiracy to commit securities fraud, wire fraud and conspiracy to commit wire fraud) in May this year by the U.S. Attorney’s Office for the Southern District of New York.
In the indictment citation, the operators and founders of Centra Tech namely Raymond Trapani, Robert Farkas and Sohrab Sharma were accused of making material omissions and misstatements with a view of deceiving investors:
“…the defendants conspired to capitalize on investor interest in the burgeoning cryptocurrency market. They allegedly made false claims about their product and about relationships they had with credible financial institutions…”
From US$67 million to US$18 million…
When the Federal Bureau of Investigation arrested the three men behind Centra Tech, around 91,000 ether was seized. At the time this was worth approximately US$67 million but with the bear market the value has now plunged to about US$18 million.
The class-action lawsuit against DJ Khaled and Floyd Mayweather does not come as a complete surprise as the U.S. Securities and Exchange Commission (SEC) had already warned last year that celebrity ICO endorsements could be considered unlawful if they failed to meet certain standards.
According to the SEC, celebrity ICO endorsements were potentially in violation of the federal securities laws if they failed to explicitly disclose the arrangement the endorsers have with the ICO companies.
“These endorsements may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement,” read an SEC statement.
The Hong Kong Stock Exchange (HKEX) believes that legal frameworks around finance and cryptos should be the same.
The world’s sixth largest stock exchange in its research paper looks at the need for regulators to keep up with the pace of financial technologies. And if they lag behind, the existing laws of finance should be applicable to the companies in the FinTech space, based on their resemblance with the traditional services. Blockchain, for instance, could be brought inside the space of investment, trading, clearing, and settlement. Similarly, issuing digital assets on blockchain could be governed by an existing securities regulatory framework.
“Despite the difference in Fintech regulations among countries,” HKEX added, “the principle of consistency generally applies, i.e. financial services with the same nature are subject to the same regulations under the existing legal framework, so as to maintain fair competition, ensure regulatory effectiveness and prevent regulatory arbitrage.”
Crypto innovations can improve a system as much as it can hurt it. The HKEX paper takes instances from other countries and their blockchain testing labs. Known as “supervisory sandbox testing,” the process aims to minimize risks by deploying blockchain and crypto innovation among a privately-governed network of users with minimal adaption requirements and regulatory restrictions. A full-scale deployment ensues only after the crypto product passes on the serviceability, the security, and the regulatory front.
Noting that supervisory sandbox practices are only limited to the banking sectors in its current format, the HKEX report recommends that these testing models should be extended to non-banking sectors such as blockchain and cryptos as well. Excerpts:
“Given that Fintech Supervisory Sandbox (FSS) is timely and flexible in making a regulatory response to market innovations, it can encourage Fintech innovations and minimize the negative impact of regulatory uncertainties with effective risk prevention and control. It is, therefore, the most suitable regulatory tool for Fintech.”
RegTech: When Regulators Innovate Their Own Practices
The HKEX research paper proposes that Hong Kong regulators establish an effective regulatory technology (RegTech) system by incorporating more use cases of AI and big data. The system would include a better, face recognition-enabled KYC process, sentiment monitoring, and identifying corporate relationships.
In the context of crypto and blockchain startups, a working RegTech system would allow them to approach legalities and auditing faster than usual. They would be able to put their business papers, including “registration information, annual reports, notices/announcements and information on its shareholders/legal persons and connected companies,” online to seek approvals in a timely fashion.
“There are now some business search engines (e.g. “Handshakes”) in the market which can help regulators analyze the nexus of commercial transactions and relationships in the financial market,” the HKEX paper added.
“These business search engines can analyze public information of listed issuers faster and in greater depth with the help of technologies, providing the accurate connections between companies and discovering possible insider dealing. This would be the primary application of big data in RegTec
Binance, the world’s largest crypto exchange, has voluntarily engaged in an initiative to eliminate money laundering on its platform.
For years, despite the inherent lack of privacy measures on major public blockchain networks like Bitcoin and Ethereum that discourage the settlement of illicit transactions, a widely pushed narrative against crypto has been the suspected usage of digital assets by criminals.
Eliminating Easily Refutable Claims
Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, and many other major cryptocurrencies are not anonymous by nature. With Know Your Customer (KYC) and Anti-Money Laundering (AML) systems integrated by cryptocurrency exchanges, it is extremely difficult for criminals to utilize digital assets to settle the transfer of illegal proceeds.
Authorities and government agencies across the globe are well aware of the non-anonymous characteristic of blockchains, which could have motivated governments like the US, Japan, and South Korea to legitimate and recognize the cryptocurrency market.
This week, Binance has started to cooperate with Chainalysis, a leading blockchain analysis company that evaluates suspicious transactions and addresses, to improve its AML system and to further legitimize the cryptocurrency sector.
“Cryptocurrency businesses of all sizes face the same core challenge: earning the trust of regulators, financial institutions and users. We expect many to follow Binance’s lead to build world-class AML compliance programs to satisfy regulators globally and build trust with major financial institutions,” said Jonathan Levin, co-founder and COO of Chainalysis.
In 2018, some of the world’s most influential banks were cracked down for money laundering. Danske Bank laundered $243 billion from criminal groups, and Nordea Bank, the largest financial group in the Nordic countries, is said to have taken several illicit payments from banks in the Baltic region.
With the institutional market of cryptocurrencies growing exponentially, the tightening of AML systems employed by public exchanges is expected to solidify cryptocurrencies as a recognized asset class and the digital asset market as a well-regulated sector.
Wei Zhao, the CFO at Binance, said that maintaining the firm’s vision of increasing the freedom of money globally, the exchange will continue to adhere to regulatory mandates in the countries it operates in.
“By working with Chainalysis, we are able to continue building a foundational compliance program that enables the next phase of our growth. Our vision is to provide the infrastructure for a blockchain ecosystem and increase the freedom of money globally, while adhering to regulatory mandates in the countries we serve.”
Importance of Compliance
The cryptocurrency sector is entering a new phase of development and growth, as Zhou explained.
During the 2017 bull market in which the valuation of the cryptocurrency market surged to $800 billion, the asset class obtained significant mainstream awareness in both countries that support crypto and regions that have established impractical regulatory frameworks to prevent local blockchain markets to flourish.
In a period in which governments are introducing increasing efforts to embrace crypto and blockchain businesses as a part of the fourth industrial revolution, voluntary initiatives by companies like Binance to legitimize the industry will ease the process of governments in regulating and acknowledging the global market.
Intercontinental Exchange (ICE), the owner of the New York Stock Exchange (NYSE), will list its highly-anticipated bitcoin futures contract in less than two months, on December 12.
Known as a physically-settled daily futures contract, the contracts will be backed by actual bitcoins held in ICE’s Digital Asset Warehouse. According to a press release, each futures contract will be validated through ICE Clear U.S., the firm’s clearing venue.
The press release states in part:
“Each futures contract calls for delivery of one bitcoin held in the Bakkt Digital Asset Warehouse and will trade in U.S. dollars and others. One daily contract will be listed for trading each Exchange Business Day.”
Launched in a partnership between ICE — the operator of 23 leading global stock exchange, including the NYSE — and other household names including Starbucks and Microsoft, the Bakkt venture aims to create an open, compliant ecosystem for digital assets.
Bakkt was created to be a “regulated ecosystem” that provides protection for institutional investors who want to get exposure to cryptocurrency. At the time of the announcement in September, Bakkt had said the physical bitcoin futures would be traded against the U.S. dollar, British pound sterling, and euro.
“A critical element to price discovery is physical delivery. Specifically, with our solution, the buying and selling of bitcoin is fully collateralized or pre-funded. As such, our new daily bitcoin contract will not be traded on margin, use leverage, or serve to create a paper claim on a real asset,” Bakkt had said at the time, responding to criticisms that the contracts could mask “hidden leverage.”
For every one purchase of a USD/BTC futures contract, there will be a delivery of one bitcoin into the owner’s account at settlement. That contrasts with the bitcoin futures markets on CBOE and CME, which are cash-settled, meaning that no actual cryptocurrency assets exchange hands at expiration.
Investors in Bakkt’s platform include Mike Novogratz‘s Galaxy Digital, Pantera Capital, and others.
The Securities Exchange Commission (SEC) this morning suspended trading in the securities of American Retail Group, Inc (OTC: ARBG) as a result of allegations that the company made false statements involving cryptocurrency, including that it had partnered with an “SEC-qualified custodian.”
The accompanying statement from the agency references two August 2018 press releases from the Nevada-based firm, wherein the company claimed that its cryptocurrency products would be offered “under SEC regulations” and that its token sale was “officially registered in accordance [with] SEC requirements.”
This comes after both the SEC and Commodity Futures Trading Commission (CFTC) expressed concerns about the fact that more companies are making fraudulent claims regarding the organizations. Specifically, an investor alert was issued from the two organizations’ respective offices, the SEC’s Office of Investor Education and Advocacy and the CFTC’s Office of Customer Education and Outreach. The agencies warned about the use of their seal, or advertising advance knowledge of the markets. In addition, the alert pointed out that officials from either agency would never suggest or demand payment, or endorse any investment, product, or service, in any way.
The SEC can suspend trading in a stock for 10 days, or until reporting requirements are met, according to federal law. Robert Cohen, Chief of the SEC Enforcement Division’s Cyber Unit, said of the suspension, “The SEC does not endorse or qualify custodians for cryptocurrency,” and cautioned investors to “use vigilance” with regards to initial coin offerings.
While many believe that the main issues with regards to trading in cryptocurrency are volatility and vulnerability to hacking , false claims about regulatory organizations seem to be a growing trend. Earlier this month, the CFTC filed charges against two men for actually impersonating regulators and forging documents in an attempt to deceive investors. The complaint, filed in the U.S. District Court for the Northern District of Texas, levied charges against two persons, Morgan Hunt and Kim Hecroft, and the complaint made clear that it was unsure whether the fraud involved two individuals, or one individual utilizing two aliases.
The defendants, who operated two businesses, called Diamonds Trading Investment House and First Options Trading, contacted clients and deceived them into believing that their funds could not be withdrawn unless a tax was paid to the CFTC. Hunt not only had an associate impersonate a CFTC investigator during a phone call conversation but also subsequently forged a document that bore the official CFTC seal.
The OTC sector is much different in that the companies are not required to disclose as much information as firms listed on securities exchanges, and the SEC had made similar investor warnings in the past regarding marijuana in 2014, when many marijuana-related OTC companies were making false claims in their press releases.
Read the full order below:
Ethereum token BAT continued its dramatic week-long ascent on Monday, bolstered by positive fundamentals related to its role in Brave’s web browser ecosystem and speculation that the cryptocurrency will soon be listed on Coinbase.
BAT (short for Basic Attention Token) increased 14 percent against the dollar on Monday, briefly eclipsing $0.30 before settling down to a current value of $0.287. The token’s weekly return now stands at 56 percent, which is far and away the best return among top 50 cryptocurrency assets.
The rally may be partially connected to the recent overhaul of Brave’s desktop browser, which gave BAT a more central role on the platform and also advanced the cryptocurrency rewards program into beta.
Another popular theory is that BAT, one of five cryptocurrencies that Coinbase explicitly said it was “exploring” adding to its cryptocurrency exchange and/or brokerage service, is surging on speculation that it will be listed on the platform soon. Coinbase added the first of those five cryptocurrencies, 0x (ZRX), on its order-book exchange earlier this month, and the listing catalyzed a phenomenal ZRX price rally.
Each of the remaining for cryptocurrencies — BAT, cardano (ADA), stellar (XLM), and zcash (ZEC) — has outperformed the wider altcoin market during the past week. However, none of these coins has managed to climb more than 8 percent, much less the 56 percent gain seen by BAT. That may have something to do with the vast differences in the market caps of these cryptocurrencies.
Even after this week’s breakneck rally, BAT ranks just 31st in total market cap with a circulating valuation of $281 million, while the remaining three coins all rank inside the top 20, and two of them — cardano and stellar — rank inside the top 10. Consequently, the “Coinbase bounce” could have an outsized effect on BAT versus the others.
Moreover, the fact that Coinbase recently listed 0x, which — like BAT — is an Ethereum token programmed to the ERC-20 standard, could have speculators believing that BAT has fewer barriers to a Coinbase listing than the other three higher-priced coins.
Bitcoin mining pool operator Slush Pool is urging miners not to upgrade their Antminer S9 devices to a new firmware patch released this morning by manufacturer Bitmain, as it will render the devices incompatible with Slush Pool.
“Dear Miners, we strongly recommend you DON’T UPGRADE your S9 devices with the new Bitmain firmware. It is not compatible with BIP310 standard and as a result also not compatible with @slush_pool,” the pool operator said. “We are working hard on providing our own fix asap and will keep you posted.”
Dear Miners, we strongly recommend you DON'T UPGRADE your S9 devices with the new Bitmain firmware. It is not compatible with BIP310 standard and as a result also not compatible with @slush_pool. We are working hard on providing our own fix asap and will keep you posted.
— Slush Pool ⚡️ (@slush_pool) October 22, 2018
this morning that Bitmain had released a new firmware patch that allows Antminer S9 owners to activate overt AsicBoost, a technological upgrade that could result in a 13 percent increase in energy efficiency.
Bitmain released the firmware just days after braiins, the software development group that operates Slush Pool, published research demonstrating that Antminer S9 hardware was capable of running overt AsicBoost, though activation would require a software patch. The firm, which recently released an open-source bitcoin mining firmware system, said that it would integrate support for overt AsicBoost into that software, dubbed Braiins OS.
According to Slush Pool, Bitmain’s firmware upgrade is not compatible with the BIP310 standard, which outlines a generic mechanism for specifying stratum protocol extensions. Consequently, users who upgrade their S9s will not be able to mine on Slush Pool until the firm is able to develop and implement a workaround.
In the meantime, miners would have to shift to other mining pools that are compatible with the upgraded firmware, such as BTC.com and AntPool — both of which are owned by Bitmain.
Consequently, the timing of Bitmain’s firmware release, along with its lack of support for BIP310, has raised questions about whether the China-based bitcoin mining giant is seeking to take punitive action against Slush Pool for developing alternative Antminer firmware and encouraging users to disable the default firmware distributed by Bitmain.
Bitmain releases new Antminer firmware to enable ASICBoost 3 days after Braiins released a blogpost about S9's ASICBoost functionality: https://t.co/KkMcwWyTJG 🤔
Guess they got worried about too many miners switching to Braiins firmware which would have Slush as default pool. pic.twitter.com/238QgejKT6
— WhalePanda (@WhalePanda) October 22, 2018
However, when reached for comment, a Bitmain spokesperson told that the reasons for publishing the firmware upgrade were “nothing more or less” than outlined in the original announcement.
“The reasons for it are explained in a blog post that we published and are nothing more or less than what is written in it,” the spokesperson said. “It appears that majority of the global network can avail the benefits of this optimization and assuming that a portion that just happened to not be capable of doing that is the reason that we had decided to work on releasing this optimization is far from logic.”
Visa is integrating open-source blockchain code from the Hyperledger Fabric ahead of the commercial launch of its own blockchain service for enterprise payments in Q1 2019.
Visa B2B Connect, the payment giant’s enterprise blockchain platform that enables cross-border payments between businesses, is partnering IBM to integrate the latter’s development of the open-source Hyperledger Fabric framework.
As reported nearly two years ago to the day, Visa first announced the blockchain platform co-developed with blockchain industry startup chain Inc.., as an alternative solution to global payments rail SWIFT for making large payments between businesses across borders.
The service tokenizes a participant’s information including account numbers and other sensitive data with a unique identifier to facilitate faster transactions susceptible to fewer fraud. Fundamentally, cross-border corporate transactions sent through B2B Connect are processed from the bank of origin directly to the receiver at the beneficiary bank.
Integrating Open-Source Blockchain Tech
Hosted by the Linux Foundation, the Hyperledger Fabric was first developed by IBM and New York-based industry startup Digital Asset as a blockchain framework and formally released its production-ready software, the Hyperledger Fabric 1.0, last year.
Including the Hyperledger Fabric’s functionality into Visa’s core assets’ will help improve and facilitate financial transactions on a scalable permissioned network to ensure “a frictionless cross-border payment experience with utmost security, trust and transparency,” Visa said in a press release on Monday.
IBM Blockchain Services general manager Jason Kelley added:
“IBM Blockchain Platform and Hyperledger technology are delivering real business value today and B2B Connect is one of the most powerful examples to date of how blockchain is transforming payments.”
Last month, Thailand’s largest bank by market capitalization, Kasikornbank, became the first financial institution in the country to pilot cross-border payments using Visa’s blockchain platform.
Bitcoin (BTC) created a key bullish pattern last week, but only a move above $6,800 would put the bulls in a commanding position, according to technical charts.
Stepping back, the leading cryptocurrency clocked a four-week high of $6,810 on Coinbase last Monday before ending the week (Sunday’s UTC close) at $6,415. Despite the pullback from the multi-week highs, BTC eked out 3.7 percent higher on the week.
Essentially, it created an inverted hammer candle last week, which is characterized by a long upper shadow – difference between the weekly high of $6,810 and the weekly close of $6,415 – and a small real body represented by the spread between the weekly opening price of $6183 and the closing price of $6,415.
The inverted hammer candlestick is considered of bullish reversal if it occurs around the bottom of the downtrend and the upper shadow is two times the size of the real body. Further, the longer the upper shadow, the more likely it is that a reversal will occur.
In BTC’s case, the candlestick has appeared close to $6,000 – a level where the cryptocurrency has likely carved out a classic bottom. However, the upper shadow is only 1.7 times the real body, meaning the probability of a bullish reversal is low.
As a result, the immediate outlook remains neutral and only a move above $6,810 would confirm a bullish breakout.
At press time, BTC is changing hands at $6,400 on Bitfinex.
As seen in the above chart, the sell-off from the record high of $20,000 reached in December last year has likely run out of steam near $6,000.
A convincing move above $6,810 (last week’s high) would validate the bullish inverted hammer and boost the prospects of a sustained move higher toward $7,402 (September high).
Over on the daily chart, the volatility, as represented by the spread between the high and low, fell to $47 yesterday – just above the 17-month low of $34 clocked on Oct. 13.
A low volatility period is often followed by a big move. Therefore, a big move could happen soon, possibly on the higher side, courtesy of the last week’s bullish hammer candle.
- $6,810 (high of last week’s inverted hammer candle) is the level to beat for the bulls this week.
- A break above $6,810 would raise prospects of a sustained move above $7,402 (September high).
- On the downside, the 21-day exponential moving average (EMA) of $6,121 is key support.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
The New Economy Movement (NEM)’s platform token XEM surged 10 percent against the dollar on Monday, rising from 0.0974-fiat to 0.1046-fiat.
The XEM/USD formed a straightforward uptrend while attempting to retest the high from Sep 6 correction action. The price action corrected towards 1.000-fiat later as a part of its pullback action. The downside momentum is still fresh and is looking to establish a floor. As it does, a near-term ascending trendline could influence the pair to continue its uptrend by forming bullish poles and pennants consecutively. A breaking of a strong resistance area near 0.1091-fiat could unhook a potential upside action towards 0.1121-fiat. Thus, a bounce back from the trendline could open near-term long opportunities, considering the risks are taken care of by opening stop loss positions at a considerably opposite direction of the trade.
A break below the ascending trendline, on the other hand, it could bring XEM/USD into a free-fall towards 0.0966-fiat, followed by 0.0947-fiat, the intraday low and possibly the only moderate support level on a downside action.
The NEM Foundation has signed a Memorandum-of-Understanding (MoU) with the United Arab Emirates’ Ministry of Community Development (MOCD). The cooperation pact enables NEM to offer consultation services to MOCD on their future blockchain projects. The agreement also allows NEM to share valuable information on its blockchain research and development on various applications that could be integrated into UAE’s information technology systems.
The UAE aims to become a fully digital government by 2019.
The NEM Foundation is also launching new blockchain hubs in Melbourne and Vietnam to expand its research and development operations. The foundation has also reached an agreement with a Las Vegas Strip called Kind Heaven to become their blockchain partner.
The bullish adoption has led to XEM to two more exchanges in the recent times. BitPanda, a European crypto exchange, will list XEM against cryptocurrencies like Bitcoin, Ethereum, IOTA, and Ripple while improving the token’s liquidity against the fiat currencies on its trading platform.
Kuna Exchange, a Ukraine-based crypto exchange, is also listing XEM-to-crypto and XEM-to-fiat pairs on its trading platform, allowing users to directly exchange XEM token with Ukrainian Hyrvnia.
As seen in the case of many cryptocurrencies, the uptrend could also be a false bull action driven by traders with large hands of XEM tokens. It is recommended for retail traders to wait for a floor test before approving any long action trades.
Following the successful execution of Monero’s hard fork on October 18, average transaction fees for XMR users have fallen a massive 97 percent from 60 cents to an average of just 2 cents according to information from CoinMetrics.
Known as “Monero 0.13.0 Beryllium Bullet”, the recent hard fork implemented a trustless, non-interactive, zero-knowledge framework called “Bulletproofs” for the privacy coin, which enabled XMR transaction details to be hidden from public blockchain validation.
“Bulletproofs” Makes Monero “Unfairly Cheap”
Writing on Twitter, CoinMetrics confirmed the massive drop in Monero transaction fees, adding that average transaction size has fallen over 83 percent from 18.5kb pre-fork to just 3kb.
— CoinMetrics.io (@coinmetrics) October 20, 2018
— CoinMetrics.io (@coinmetrics) October 20, 2018
It will be recalled that on October 18, Russian news platform Forklog reported that the Monero hard fork took effect on block 1685555, with version of the software and Bulletproofs executed on block 1686275. Bulletproofs was introduced to the Monero community as the solution to a number of extant problems including providing enhanced privacy with faster and cheaper transactions, and greater resistance to ASIC miners, which the Monero development community sees as a centralisation risk.
To achieve this, Bulletproofs shrinks the size of cryptographic proofs it uses, which in turns leads to an over 80% decrease in transaction size. As a result of this, Monero now requires substantially less disk storage space than it used to. Already XMR miners have reported that mining difficulty has dropped significantly since the hard fork, which is in the line the vision of its developers to be open for mining to all users and not just corporate ASIC mining farms as is the case with bitcoin.
Speaking on Twitter after Coinmetrics released its data, Monero lead developer Ricardo Spagni said:
Monero is now unfairly cheap https://t.co/iVjsYNaV78
— Riccardo Spagni (@fluffypony) October 20, 2018
As shown in the 1-year chart covering October 2017 to October 2018, Monero’s transaction fees have dropped to an all-time low, which is a significant achievement at a time when the coin’s total market cap stands at a 3-day high of $1,730,663,942 with a 24-hour trading volume of $12,937,507 according to CoinMarketCap. Despite dropping more than 70 percent from an all-time high of about $460 in December 2017 to about $105, Monero remains popular with privacy advocates, amidst whispers of it being the coin of preference for cybercriminals carrying out illegal activities like cryptojacking.
Monero completed its first audit for the Bulletproofs protocol after it was put forward as a solution to the general scalability problem of blockchains by Stanford’s Applied Cryptography Group (ACG) alongside University College London and Blockstream.
China’s top-level internet censorship agency has set out how it plans to regulate blockchain-related service providers in the country.
The Cyberspace Administration of China (CAC) published a draft policy on Friday, called “The Regulation for Managing Blockchain Information Services” and is now looking for public feedback before it will take effect.
The rules, if enacted, would apply to any China-based entity regarded as a blockchain information service provider, and would represent one of the country’s first regulatory frameworks drawn up specifically for the blockchain industry.
In the draft, the CAC defines blockchain information service providers as “entities or nodes” that offer information services to the public – “both institutions and individuals” – using blockchain technology via desktop sites or mobile apps.
Among the 23 articles proposed in the draft, one requires blockchain service providers to register with the agency within 10 days of starting to offer services to the public.
The proposed draft also orders that blockchain startups must register their names, service types, industry fields and server addresses with the CAC. This information would become publicly available and the CAC would conduct reviews on a yearly basis.
While the agency does not clearly outline what types of blockchain startups fall under its definition, some industry experts in China have said the proposed rules could have an impact on the “supernodes” of certain blockchain networks.
Jiang Zhuo’er, founder of the BTC.TOP mining pool, posted his views on the draft over the weekend, saying:
“For example, each of the 21 supernodes of the EOS network is operated by a company or an individual. As such, they must be fully compliant [with this regulation].”
Also in the draft rules, blockchain service providers in certain highly regulated fields in the country, such as news reporting, publishing, education and the pharmaceutical industry, must also obtain licenses from relevant authorities prior to registration with the CAC.
Further, service providers would not allowed to use blockchain technology to “produce, duplicate, publish, and disseminate” information or content that is prohibited by Chinese laws.
In the past, blockchain technology has been utilized to bypass China’s heavy handed internet censorship – often dubbed “The Great Firewall”. For example, as part of the #Metoo movement and a recent pharmaceutical scandal in the country, individuals have posted information on the ethereum blockchain where it cannot be censored.
Another proposed article in the draft also requires blockchain information service providers to enforce know-your-customer (KYC) measures by gathering users’ national identification numbers or mobile phone numbers.
“Service providers must store the logs and content published by users of their blockchain services for six months and provide this information to law enforcement when required,” the draft policy states.
The public now has until Nov. 2 to submit any feedback before the draft policy takes the next step towards becoming official policy.
After a troublesome Q3 growth report on Friday and analysts signaling to the trade war between the US and rising interest rates, Chinese stocks rallied this Monday. In fact, not only rallied but are actually on track to make it one of their biggest gaining days since 2015.
This remarkable rebound on Monday came shortly after Beijing made significant efforts to buoy markets by reassuring investor confidence following the steep selloffs of recent weeks. By noon, the CSI 300 index of companies on both the Shanghai and Shenzhen stock exchanges was up by 4.4%. This makes for its largest gaining day in three years.
The trend was echoed in Hong Kong, with the Hang Seng China Enterprises Index of Chinese companies also jumping by 3.3%. This would make it its best day since October 2017. Even the technology company Tencent that’s seen its profits affected by tight Chinese gaming regulations also saw a jump of 4%.
China Stocks Rally but No End to Volatility
The crippling selloffs, particularly in tech, over the past couple of weeks, look to be over, at least for today. After a dismal period that saw 23% fall from the MSCI Asia ex-Japan index, the markets are rallying back. Global Market Strategist at JPMorgan Asset Management Kerry Craig said:
“After what has been a tense and terse month for Asia equities as a whole, they’re taking a breather, but that’s not to say volatility is going away… If China sneezes, the rest of the region catches a cold. The A-shares market has suffered a significant sell-off this year, so the rebound is expected after it’s been so volatile.”
Intervention from Authorities
Monday’s bounce-back happened after an intervention from China’s central bank, the securities watchdog, and China’s banking and insurance regulator, who told state media last Friday that the authorities would take the necessary measures to help markets, and that the slump in equities was no reflection on China’s domestic economic health.
Among these measures, the central bank pledged to ensure liquidity in the banking system and the Chinese authorities revealed temporary changes to individual income tax law including special deductions.
This attempt at bolstering confidence came on the back of a weaker-than-expected third quarter growth report of 6.5%.
China’s equity market takes the lead as the worst performing major global market this year, falling 25% from its peak earlier this year, and taking a toll on its national currency. Technology stocks have fared worse recently in the region, with Tencent shares dropping by almost 40% since their height in January.
Samsung SDS, the IT subsidiary of Korean giant Samsung, is collaborating with Dutch ‘big three’ bank ABN AMRO for a logistics blockchain pilot tracking the shipment of a container from Korea to the Netherlands.
In an announcement on Monday, Samsung SDS revealed details of a new partnership with the Netherlands bank for a joint blockchain pilot to track the multi-modal transport of a container from a factory in Korea to the Netherlands through the Port of Rotterdam, Europe’s largest shipping port by freight volume.
Specifically, the pilot will involve the linking of Nexledger, Samsung’s enterprise blockchain, and ABN AMRO’s Corda platform, developed by New York-based industry firm R3.
ABN AMRO claims the ‘special’ project brings two different blockchains together ‘for the first time in the rather short history of this technology’, adding ‘this takes place via an overarching ‘notary’ that connects entirely separate blockchains in Korea and the Netherlands.’
Traditionally, an international trade finance transaction involving shipments sees payments, administration and the physical transportation of containers occur in separate flows with a paper-intensive manual process. “We will be integrating all these flows in our pilot: from workflow management combined with track & trace to the digitisation of paper documentation such as waybills and the financing of handled freight or services” ABN AMRO’s commercial banking chief Daphne de Kluis explained.
The banking executive envisions “millions of euros” of savings in the long-term due to enhanced efficiency and transparency from blockchain-powered logistics chains.
The blockchain pilot will be entirely paperless and will electronically confirm receipt and payment of the trade alongside real-time sharing of documents that are viewable by the shipper, receiver and port operator.
The three parties, including the port of Rotterdam, will conduct the pilot in January. The Port of Rotterdam Authority, the operator of Europe’s largest and busiest shipping port, notably launched a ‘blockchain field lab’ in 2017 to research and develop applications based the decentralized technology.
Samsung SDS is already part of blockchain consortium comprising of a number of Korean authorities and logistics giants, working toward a unified goal to put all exports and imports in South Korea on a blockchain. In September this year, Samsung SDS entered an agreement with the Korea Customs Service (KCS) to develop a customs logistics service powered by blockchain technology.
In the last 24 hours, the Bitcoin price has experienced a gradual decline from $6,500 to $6,410, struggling to demonstrate momentum in the relatively low region of mid-$6,000.
The low volume of Bitcoin remains a concern for traders, as it demonstrated the lack of interest in investors in the cryptocurrency exchange market to initiate trades in a period of uncertainty and stability in a low price range.
“On Coinmarketcap, the volume of Bitcoin fell to $3.1 billion while it fell to $1.91 billion on CoinCap. The previous yearly low point of the Bitcoin volume was $3.2 billion on Coinmarketcap and $2 billion on CoinCap,” the report read.
Still no Major Movement
On Sundays, the daily trading volume of the cryptocurrency exchange market tends to dip, as professional traders and institutions prevent from engaging in major trades throughout the weekend.
Hence, many traders expected the volume of Bitcoin to rebound the following day, hopeful for a short-term price movement in the range of $6,500 to $6,800.
While the volume of BTC has increased from $3.1 billion to $3.4 billion, the magnitude of the rise in volume was lower than the expectations of investors. The low volume of BTC has affected the rest of the market, as many cryptocurrencies recorded minor drops in the range of 0.5 to 2 percent.
Cryptocurrency trader and technical analyst Cred stated that in a tight price range, traders are observing the market to provide clarity on the short-term trend of major digital assets.
Over the past seven days, Bitcoin has remained stable at $6,400, failing to show any recognizable movement on both the upside and downside. The continuous stability in BTC led traders to prevent filing trades and wait out for BTC to confirm its short-term trend, which could have led to the decline in the daily trading volume of the asset.
“Tight range — waiting for the market to provide evidence of direction. Will be looking for longs on a pullback > $6,500 or at $6,100 – $6,200. I don’t want to be a seller at low-mid $6,000s. Don’t chase trades in the chop; wait for clarity and anticipate.”
Where Does the Market go Next?
BTC is awaiting the closure of its weekly candle on October 22. Often, subsequent to the demonstration of 6 weekly candles in a tight price range, BTC has tended to initiate a notable movement on the upside.
If BTC can initiate a breakout above the $6,600 mark and potentially eye a move towards the $6,800 resistance level, then a bullish short-term trend can be confirmed. However, if it continues to show low volume and trading activity in the $6,300 to $6,500 range, it will be challenging for BTC to initiate a big spike.
In summation, it is highly unlikely for BTC to fall to the lower region of $6,000 given its strong defense of the $6,000 support level since late July. But, to secure a short-term rally, BTC will need to initiate a sudden spike in price.