Union Bank of Nigeria PLC, Nigeria’s sixth largest bank by assets has issued a general notice informing its customers that henceforth all accounts linked to cryptocurrency trading activities will be monitored and may be subject to restrictions going forward.
Originally owned by Barclays Bank before becoming locally owned in 1979, the bank is one of the oldest in Nigeria, with a history going back over 100 years, and it is ranked as Africa’s 14th largest bank as well as the world’s 556th largest bank.
The pronouncement comes at a time when the Nigerian cryptocurrency ecosystem is in the news for a potential government regulatory framework promised by the main opposition candidate in next year’s elections. A few days ago, Atiku Abubakar, the presidential candidate of the People’s Democratic Party (PDP) promised in his campaign policy document that comprehensive cryptocurrency and blockchain regulation would be a key policy focus of his government if he becomes president in 2019.
Union Bank Announcement and Consumer Backlash
The notice, which went out to hundreds of thousands of depositors on Tuesday said:
The Central Bank of Nigeria (CBN) has advised that cryptocurrency is not a legal tender in Nigeria and has cautioned against transacting in them.
In order to guarantee the security of our customers’ funds, Union Bank will monitor accounts being used for cryptocurrency transactions and may impose restrictions including closure of such accounts.
We appreciate your patronage and we are committed to providing you with simpler, smarter banking services that best protect your interest and guarantee the security of your funds.”
Responding to questions from customers on Twitter later on, the bank further stated:
The Central Bank of Nigeria (CBN) has advised that cryptocurrency is not a legal tender in Nigeria and has cautioned against transacting in them.
For more information on this, kindly refer to their website https://t.co/X07jOuAiXe
— UNION BANK (@UNIONBANK_NG) November 27, 2018
It is important to note that while the Central Bank of Nigeria (CBN) has indeed issued several statements disavowing cryptocurrencies as legal tender in Nigeria, it has also never recommended any regulatory action against holders or users of cryptocurrency, instead only saying that they transact with crypto “at their own risk”. Indeed, a number of Nigerian Fintech startups are making use of cryptocurrency to facilitate payments, and most banks in the country have chosen not to carry out action against cryptocurrency-related accounts.
The reaction to the announcement by its customers on Nigerian and international social media platforms has been unanimously condemnatory, with many suggesting that the over 100 year-old bank which began its existence as a British colonial trade financier in 1909 is out of touch and geared toward a past era.
Is union bank even a bank.
Bank of pensionairs I guess. I rather dig hole and hide my money than transact with this yeye bank 😡
— Aroluyo Ayodeji (@aroluyoa) November 27, 2018
Some users pointed out that the CBN has never in fact recommended any such action, and others simply stated that the bank will lose their business if it does not revise its stance.
Is union bank even a bank.
Bank of pensionairs I guess. I rather dig hole and hide my money than transact with this yeye bank 😡
— Aroluyo Ayodeji (@aroluyoa) November 27, 2018
Like seriously? I have been in several meetings where CBN has always been present. They have never asked individuals not to trade crypto. Only you banks were told not to trade with our money in your bank. Time for many believers to ditch you @UNIONBANK_NG
— Linzsolutions1 (@Linzsolutions11) November 26, 2018
@UNIONBANK_NG Unionbank_Ng just lost me as a customer. I don't have time to be begging anyone for my own hard earned money.
— Ibmacky (@ibmacd) November 26, 2018
Despite the regulatory ambiguity on the subject cryptocurrency in Nigeria, Nigerians are among the world’s most prolific peer-to-peer bitcoin traders, driven by instability of the Naira, which shed 85 percent of its value between 2015 and 2017.
A blockchain-based trading platform that could assist oil majors and trading firms to drastically reduce costs is now operational.
Known as Vakt, the platform which was created last year by a consortium consisting of Anglo-Dutch oil giant Shell and British Petroleum (BP), went live on Wednesday, according to Reuters.
Other members of the consortium include global commodity trading firm Gunvor Group, Norwegian energy firm Equinor and energy trading firms Koch Supply and Trading Mercuria Energy Group. Financial institutions such as Societe Generale, ING and ABN Amro are also part of the consortium.
Next Feature? Financing
While the platform will initially digitize and centralize the paperwork generated by all the parties to a deal, a financing feature will be added when it is linked to Komgo, a financing platform that was unveiled earlier in the year.
“Vakt is the logistical arm…Once a deal is executed through our book of records, it gets pushed through Vakt,” Eren Zekioglu, a senior executive at Gunvor Group, said. “The next leg is the financing and the link-up with komgo gives access to several banks.”
Initially, the Vakt platform will be restricted to contracts for five crude grades from the North Sea. Plans are afoot, however, to include oil products from northern Europe and the United States.
Vakt is not the only blockchain platform that has been developed for the oil sector in the recent past. In March this year, the energy industry had invested approximately US$300 million in developing blockchain applications.
Ondiflo by ConsenSys and Amalto
Some of the blockchain platforms for the energy sector which have received prominent coverage include Ondiflo, an application aimed at digitizing and automating various oilfield services on the Ethereum blockchain. It was developed by blockchain software firm ConsenSys in partnership with software developer Amalto.
Specifically, the Ondiflo blockchain platform was designed to streamline and improve the order-to-cash processes in the upstream, midstream and downstream sectors of the oil industry that are still heavily reliant on paper. Benefits of the platform include faster transaction times and an enhanced overall efficiency which would help cut costs in an industry with razor-thin margins.
“As one of our first ventures into the oil and gas supply chain industry, Ondiflo will offer a solution where all operators and service companies can benefit from digitization, automation and the seamless exchange of data and immutability of their records…” the co-founder of ConsenSys, Joe Lubin, said at the time.
- Ripple price is placed nicely above the $0.3700 and $0.3615 support levels against the US dollar.
- Yesterday’s highlighted crucial ascending channel is intact with support at $0.3620 on the hourly chart of the XRP/USD pair (data source from Kraken).
- The pair remains supported on dips and it could continue to move higher towards $0.4000 and $0.4200.
Ripple price is positioned nicely for more gains against the US Dollar and Bitcoin. XRP/USD is likely to accelerate gains towards the $0.4200 level in the near term.
Ripple Price Analysis
Yesterday, we saw a nice upward move above the $0.3900 resistance in ripple price against the US Dollar. The XRP/USD pair even spiked above the $0.4000 resistance and traded as high as $0.4014. Later, there was a downside correction and the price traded below the $0.3900 and $0.3850 levels. However, the price remained well supported above the $0.3600 support and the 100 hourly simple moving average.
A low was formed at $0.3669 and later the price started trading in a range. It slowly moved higher and traded above the $0.3700 level. There was a break above the 23.6% Fib retracement level of the recent decline from the $0.4014 high to $0.3669 low. Besides, the price broke a connecting bearish trend line with resistance at $0.3750 on the hourly chart of the XRP/USD pair. It seems like the pair could continue to move higher towards $0.4000 or $0.4200. An immediate resistance is near the $0.3880 level. It represents the 61.8% Fib retracement level of the recent decline from the $0.4014 high to $0.3669 low.
Looking at the chart, ripple price is still following yesterday’s highlighted crucial ascending channel with support at $0.3620. As long as there is no close below $0.3600, the price may continue to grind higher.
Looking at the technical indicators:
Hourly MACD – The MACD for XRP/USD is slightly placed in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for XRP/USD is back above the 50 level.
Major Support Level – $0.3620
Major Resistance Level – $0.4000
Liechtenstein cryptocurrency exchange LCX has been granted a license to provide crypto trading services for utility and payment tokens. The exchange will be offering four main crypto services including a custody service and a fiat-to-crypto exchange in partnership with Binance.
A Regulated Exchange
LCX announced on Tuesday that it has been granted “a business license of the Liechtenstein Ministry of Economic Affairs to conduct its business in Liechtenstein (Gewerbebewilligung).”
An LCX representative told news.Bitcoin.com:
With this license, we got the permission from the regulator to provide crypto exchange trading services for utility and payment tokens. So, we can offer an exchange to investors, to safely trade utility and payment coins (stable coins for example), that is approved by the regulator.
The representative added that LCX can now offer “services that other crypto exchanges offer … in a regulatory compliant manner.” As a regulated exchange, LCX says that it will apply the “highest technology standards for KYC [know-your-customer] and AML [anti-money laundering] to safeguard fulfillment of all regulatory requirements for AML and KYC.”
The Liechtenstein Blockchain Act defines three different types of tokens: utility, payment, and security.
“We also want to offer security token trading to our clients,” he emphasized, noting that LCX has increased its nominal capital from 100,000 CHF (~$100,400) to 1,000,000 CHF in order to apply for additional licenses, such as the Financial Market Authority (Fma) license, to be able to trade security tokens and offer other regulated services.
The company plans to offer four key products. One is a trading platform for security tokens and other cryptoassets. The second is a crypto custody service called LCX Vault.
The third is called LCX Terminal which integrates the APIs of major exchanges — such as Binance, Bittrex, Coinbase, Poloniex, and LCX’s own exchange — into a single trading desk. This product recently entered the closed-beta phase. The company described it as “a trading desk for crypto assets equipped with portfolio management, analytics platform, auto trading functionality and audit reporting — [an] integration of major exchanges.”
The fourth is a fiat-to-crypto exchange unveiled in August in partnership with Binance. This exchange will offer the trading of Swiss francs and euros against major cryptocurrencies.
The LCX representative explained to news.Bitcoin.com:
The moment we decide we’re ready to integrate our exchange into the terminal we can go public with this product … All other products are in development and will be announced and made public in the near future.
Furthermore, he noted that LCX’s exchange services “can be offered in a global manner,” adding that “we will be setting new standards in terms of KYC and AML, which every client of LCX should pass.”
A Pakistani-American woman who bought bitcoin and other cryptocurrencies using fraudulently obtained credit cards before wiring the funds to ISIS has pled guilty to charges of offering financial support to a terrorist organization.
According to court filings, Zoobia Shahnaz made a couple of wire transactions last year to fronts for the Islamic terror outfit ISIS in China, Pakistan and Turkey. Besides the financial contributions to ISIS, Shahnaz was also planning to travel to join the terror group in Syria. She was intercepted at the JFK Airport in New York on her way to Istanbul, Turkey – a common entry point for ISIS recruits from the West.
Part of the amount that she wired to ISIS fronts was obtained by dishonest means. Per the prosecutors, between March and July last year, Shahnaz used ‘materially false pretenses, representations and promises’ to obtain a US$22,500 loan from a financial institution.
Shahnaz also got multiple credit cards from various financial institutions including Discover, American Express, TD Bank and Chase Bank by false pretenses. She then used the credit cards to buy bitcoin and other cryptocurrencies worth approximately US$62,000 from exchanges before converting them to cash.
“She also fraudulently applied for and used over a dozen credit cards, which she used to purchase approximately $62,000 in Bitcoin and other cryptocurrencies online,” a press release from the U.S. Department of Justice read. “She then engaged in a pattern of financial activity, culminating in several wire transactions totaling over $150,000 to individuals and shell entities in Pakistan, China and Turkey that were fronts for ISIS.”
Shahnaz, who has been in custody since she was arrested last year in December, could be sentenced for up two decades in prison.
The case highlights the fact that fears that cryptocurrencies could be used to fund terrorism are overblown since despite using bitcoin to launder the money, Shahnaz had to resort to a wire transfer in her attempts to get the money in the hands of the terrorists.
Cash Rules in Terrorist World
As reported in September, part of the reason why bitcoin has not proved useful to terrorists is that they are usually located in places that lack the infrastructure necessary to conduct cryptocurrency transactions. This has seen cash take an almost monopolistic hold as the most anonymous method of financing terror.
However, according to intelligence analyst, Yaya Fanusie, this could change in the future and there is a need for the U.S. government to ensure that Anti-Money Laundering and Know Your Customer regulations are rigorously enforced.
“By preparing now for terrorists’ increasing usage of cryptocurrencies, the U.S. can limit the ability to turn digital currency markets into a sanctuary for illicit finance.”
An influx of research and development is beginning to form around ethereum 1x, a proposed upgrade that aims to more quickly improve the usability of the world’s third-largest blockchain.
While the exact code changes that will comprise the upgrade have yet to be settled, active discussions suggest a myriad of different proposals could be activated by June 2019, should a final proposal ultimately be formulated, proposed and approved by users of the ethereum network.
Still the plan, is in its early stages of development.
Indeed, there’s even been a suggestion by Afri Schoedon, release manager for the Parity ethereum client, to release the upgrade on its own, separate blockchain network. Nevertheless, there are many voices contending ethereum 1x ought to be activated on the existing blockchain – and soon.
Originally thought to be an addition to an upgrade called ethereum 2.0 – ethereum creator Vitalik Buterin has referred to it recently by an older name “Serenity” – the roadmap for this upgrade changed in June to include new design specifications that are projected to delay activation.
As explained by Schoedon, developers are now more certain ethereum 2.0 will not go into production before the year 2020. According to Schoedon, developers “started panicking and saying, ‘Hey we really need to find intermediate solutions’” – creating the impetus for new ideas able to be implemented in the near-term.
And though ideas for ethereum 1x may “sound too radical or controversial” for now, Schoedon said that the goal is to discuss any and all ideas inclusively with community stakeholders such that “none of the upgrades will be controversial in the end.”
With plans for ethereum 1x originally discussed during in-person meetings at an ethereum developer conference, Devcon4, earlier this month, certain members of the community were disgruntled at the lack of public involvement. Still, the controversy has been set aside for now with the creation of public forums to openly discuss ethereum 1x.
In addition, meetings to coordinate efforts on this proposed upgrade are expected to proceed under Chatham House Rules, meaning public disclosure of the content of discussions must exclude speaker attribution.
With the intent of encouraging open discussion among developers, the first of these meetings will occur tomorrow at 14:00 UTC.
“We need to to be very sensible about how we do this,” Schoedon told, adding:
“We need to be very inclusive with everyone in the community and be very open and transparent about talking about all the ideas and discussing what might be the best approach.”
A big state
According to meeting minutes from earlier discussions at DevCon4 published by Dan Heyman, the program director of ethereum blockchain development group PegaSys, there are currently four different working groups tasked with advancing ethereum 1x.
One of these groups, led by ethereum core developer Alexey Akhunov, is leading the effort to introduce storage rent to the ethereum platform. Storage rent is a mechanism discussed by developers in detail back in March. Its purpose is to curb the growth of the ethereum “state” – otherwise understood to be all of the active applications and accounts operating on the blockchain network.
Given the fast acceleration of decentralized applications (dapps) built on ethereum through smart contracts – self-deploying lines of code – the amount of data being stored on the blockchain to support these contracts is also increasing.
This presents an issue for new users wanting to participate in the network by deploying software called nodes that download and maintain a full copy of the active blockchain state.
The larger the state, as Akhunov told, the longer it takes for new computers joining the ethereum network to download such copies and maintain them.
Adding to this, Schoedon estimated the size of ethereum blockchain data to be currently sitting at around 125 gigabytes, with the active running state of the network being roughly 10 gigabytes.
“It’s growing at a pace that we’re probably looking at 200 or 300 gigabytes of chain data by end of next year and a massive state,” said Schoedon.
As such, the proposal to charge a fee to users who are storing smart contract data on the blockchain is aimed at mitigating the speed at which the ethereum blockchain is currently growing and thereby ensure accessibility of the network for all users at least in the short-term.
However, this is not the only proposal currently being discussed among developers. An alternative proposal suggests moving certain portions of smart contract data off-chain. This would effectively push the responsibility of data storage to dapp developers.
The mechanism – called “stateless clients” – to facilitate off-chain smart contract data would be simpler to implement than storage rents, Akhunov concedes.
Still, there are concerns with this proposal as it relates to how dapp developers share and update off-chain data.
“I have a problem with stateless clients at the moment. People think they are actually easier to implement and they are easier to implement in terms of protocol upgrade,” said Akhunov. “But they will be much harder for the dapp developers to support.”
In addition to storage rent, another 1x-focused group is exploring proposals to archive old information stored on the blockchain in a bid to relieve the pressures of a growing state.
But outside of ethereum’s data storage mechanisms, a third team of developers – called “the simulation group” – aims to “analyze the issues that happen through the blockchain when block size grows or when the latency increases,” Akhunov said.
This is particularly relevant due to code optimizations that have increased the speed of block propagation on ethereum presently. As a result of new blocks being relayed throughout the network more quickly, ethereum miners are also expected to be able to add in a greater number of transactions per block and collect a larger amount of transaction fees.
Akhunov said that studies suggesting exactly how much more the maximum amount of transaction fees collected by miners – called the “gas limit” – are few and far between.
“There are only a few studies that have been done to analyze how blocks propagate through the network and what would happen if you raise the gas limit,” said Akhunov.
Some of the development efforts going into ethereum 1x are focussed on running simulations to test higher gas limits, given that it’s a key area of research around the wider progress toward relieving scaling pressures faced by the network today.
As such, ethereum 1x – outside of addressing issues to do with blockchain state size – is also expected to feature improvements to transaction throughput on ethereum. Indeed, the two issues go hand-in-hand in the context of supporting more network activity.
According to Akhunov, ethereum 1x is an “ensemble” of different proposals that are only effective when deployed together.
“We want to solve these problems together and not just one thing. It has to be solved as an ensemble rather than one thing at a time.”
Out of the box
The dovetailing nature of the groups also covers the fourth working team, which is looking into decreasing the cost of smart contract deployment. The idea is that such efforts could lead to ways to balance out a potential increase to smart contract storage costs with proposals like the rent one.
By putting forward an early implementation of eWASM – a new virtual machine that processes smart contract code – ethereum developers aim to leverage the new technology and create so-called “precompiles” more easily.
Precompiles are commonly deployed smart contract operations that are optimized to run natively on ethereum for a fixed fee, or gas cost. And as Akhunov explains, there are currently only a handful created on the ethereum network.
But the demand is high for more to be added to streamline smart contract development.
With a “limited number of people in the core development team,” Akhunov admits that “if we try to start implementing all the precompiles people are asking for, we’re never going to be able to do anything else.”
One of the biggest hurdles when it comes to developing precompiles is deciding what a fair gas cost for a particular smart operation should be.
Normally, developers create formulas to gauge the energy and time precompiles take to execute. But through leveraging the eWASM engine, this process of pricing is done automatically.
As Akhunov highlighted:
“The eWASM engine will do something called metering. It will meter the operation and it will charge exactly as much gas as being consumed by the operation.”
Predicting the construction process of precompiles to get much “easier” for ethereum core developers through the technology, Akhunov also added that once fully-tested, “the plan is to open eWASM for all smart contract developers.”
Indeed, the longer-term goal is to do away with the need to create precompiles all together. Among other benefits to smart contract developers, the eWASM engine as previously reported is expected to run all smart contract operations at native network speeds and efficiency.
Still, until that future is realized, etheruem 1x is envisioned to sustain the ethereum network with what Parity developer Afri Schoedon calls “out of the box” solutions.
And while all these solutions are projected to be activated on “a very accelerated timeline,” Schoedon highlights that, on his part, no concrete action will be taken until a “broad consensus in the community” is reached.
Russian Economic Development Minister Maksim Oreshkin has stated that while bitcoin has deflated like a “soap bubble,” it has impacted the world positively by boosting investment in new technologies. Speaking to the media on Wednesday at Russia Calling, an investment forum organised by VTB Capital, Oreshkin said that despite the woes of the crypto market, the conversation around it has successfully driven significant international interest in a vast number of projects in new fields, principally blockchain technology.
Giving his comments at the event, he said:
“You may recall what I said, for example, last year, when Bitcoin’s price jumped up to $20,000, and now it is lower than $4,000, we said very simple things. Bitcoin itself is a soap bubble, it deflated, that’s what happened. […] Unfortunately, many people were affected [because of their investments in cryptocurrency], but again, in terms of new technologies, new businesses, it gave a positive impetus.”
His line is in keeping with the general Russian state reaction to the growth of cryptocurrency. Until now, the legal status of crypto trading, ICOs, and mining has not been firmly established in the country, with Russian authorities doing little more than issuing vague disclaimers and investment advisories from time to time.
While a number of prominent voices have advocated blockchain adoption for reasons as varied as using a gold-linked cryptocurrency to protect its arms export industry to adopting DLT to eliminate customer abuse in the pension fund industry, this still remains far from happening. Thus far, the Russian state’s interest in bitcoin has been largely restricted to facilitating foreign missions in need of hard-to-trace cash.
In March, three draft bills aimed at correcting the regulatory gap were submitted of reading in Russia’s parliament, although the proposed laws included a clause that stipulated that Russia does not recognise digital financial assets as legal tender in the country. Despite this, it has been reported in the past that the country is examining the possibility of skirting US-imposed sanctions using cryptocurrency as a primary solution.
Speaking in June, President Vladimir Putin stated that while the state continues to look at the crypto “phenomenon” with great interest, it cannot at the moment issue or sanction the issue of such tokens since, by definition, they fall outside the regulatory scope of relevant government agencies. That notwithstanding, during this year’s FIFA World Cup which held in Russia, it was announced that hotels and selected hospitality spots would accept cryptocurrency as millions of fans from around the world arrived in Russia.
Earlier this week, US Securities and Exchange Commission (SEC) Chairman Jay Clayton said at a conference in New York that to approve a Bitcoin exchange-traded fund (ETF), the SEC needs to see a market that is free of manipulation.
“What investors expect is that the trading in that commodity that’s underlying the ETF is trading that makes sense, is free from the risk or significant risk of manipulation. Those kinds of safeguards don’t exist in many of the markets where digital currencies trade.”
The SEC believes most cryptocurrency exchanges in the global market have not implemented safeguards to eliminate the risk of manipulation, making it increasingly unlikely for an ETF based on a cryptocurrency exchange to be approved by the SEC.
In July, the Bitcoin ETF filing of the Winklevoss twin was officially rejected by the SEC. At the time, the commission said that Gemini, a heavily regulated cryptocurrency exchange based in the US, is vulnerable to manipulation and emphasized that cryptocurrency exchanges, in general, are not mature enough to handle an ETF.
The SEC’s stance towards cryptocurrency exchanges has been clear to the public since the rejection of the Winklevoss Bitcoin ETF. As such, various organizations including ProShares attempted to circumvent the SEC’s ruling by introducing an ETF on top of a futures market.
A futures-based ETF was also rejected by the SEC in August, as the commission found that the futures market is not of significant size to support an ETF.
In February, a Bitcoin ETF filing by VanEck, an investment management firm headquartered in New York with over $47 billion assets under management, is set to have its ETF evaluated by the SEC. The VanEck ETF is different from previous ETF filings because it bases the price of Bitcoin on the over-the-counter (OTC) market through an index.
No ETF in the past attempted to use the OTC market to find the base price of Bitcoin. According to Gabor Gurbacs, a digital asset director at VanEck, OTC trading desks tend to be more robust, regulated, and liquid than exchanges, which could meet the requirements set forth by the SEC.
“The OTC trading desks are more robust, efficient and liquid, as well as better regulated, than most of the crypto trading platforms. They are an important and often unsung heroes in institutional crypto space,” Gurbacs said.
Emphasizing that his statement reflects his personal view, not the stance of VanEck, Gurbacs also added that the comments issued by the SEC can be appropriately addressed by an ETF:
“I believe that the comments raised on pricing, surveillance and custody all have appropriate answers. Digital asset market structure is developing rapidly and towards the right direction.”
Will VanEck be Approved?
Whether the VanEck Bitcoin ETF will be approved by the SEC or not remains uncertain. But, it represents an innovative attempt to propose to the SEC that the OTC market, which is considered to be at least two to three times larger than the cryptocurrency exchange market, could provide sufficient liquidity to an ETF.
Pro boxing champ Floyd Mayweather Jr. and music producer DJ Khaled agreed to pay the Securities and Exchange Commission a combined $767,500 to settle charges of illegally promoting ICOs.
These are first cases the SEC has brought violations involving ICO promotion. The SEC noted that using celebrity endorsers was a crucial part of the ICO issuers’ promotional strategy.
In a November 29 statement, the SEC said Mayweather and Khaled each failed to disclose payments they had received for promoting various ICOs (initial coin offerings).
SEC: Mayweather Illegally Promoted 3 ICOs
In Mayweather’s case, the SEC found that he did not disclose promotional payments he received from three ICO issuers, including $100,000 from crypto startup Centra Tech Inc.
In April 2018, the SEC charged the co-founders of Centra Tech with securities fraud. Regulators accused Sohrab “Sam” Sharma and Robert Farkas of raising more than $32 million through a sham crypto token sale promoted by Floyd Mayweather and DJ Khaled.
The SEC also found that Mayweather never disclosed that he was paid $200,000 to promote two other ICOs.
— Floyd Mayweather (@FloydMayweather) August 23, 2017
Mayweather heavily promoted the ICOs on his popular social media accounts, including Instagram and Twitter, where he has millions of followers.
In an August 2017 tweet, Mayweather suggested that he would make a windfall on an ICO. “You can call me Floyd Crypto Mayweather from now on,” he boasted.
No Admission of Wrongdoing
Without admitting or denying any wrongdoing, Mayweather agreed to pay the SEC a $300,000 penalty, $300,000 in disgorgement, and $14,775 in pre-judgment interest.
In addition, Mayweather agreed not to promote any securities — digital or otherwise — for three years.
In a separate case, the SEC concluded that DJ Khaled failed to disclose a $50,000 payment from Centra Tech, which he rabidly promoted on his popular social media accounts.
Khaled agreed to pay a $100,000 penalty, $50,000 in disgorgement, and $2,725 in prejudgment interest. The recording artist also agreed not to promote any securities for two years.
— Neeraj K. Agrawal (@NeerajKA) September 28, 2017
The SEC said Mayweather and Khaled were required to disclose that they were paid to promote the ICOs because not doing so gave their followers the impression that their endorsements were unbiased.
“These cases highlight the importance of full disclosure to investors,” said Stephanie Avakia, co-director of the SEC’s enforcement division. “With no disclosure about the payments, Mayweather and Khaled’s ICO promotions may have appeared to be unbiased, rather than paid endorsements.”
Lawyers Warn Celebrity Endorsers
Steven Peikin, the co-director of the SEC’s enforcement division, cautioned investors to be wary of any celebrity endorsements for investment vehicles.
“Investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements,” said Peikin.
“Social media influencers are often paid promoters — not investment professionals — and the securities they’re touting — regardless of whether they are issued using traditional certificates or on the blockchain — could be frauds.”
As CCN reported in April 2018, legal experts warned that celebrity endorsers of ICOs and other cryptocurrency products could face legal action as regulators crack down on fraud.
“[The lesson for celebrities is to] “know what you’re endorsing,” said Beth-ann Roth, a former SEC prosecutor and partner at Capital Fund Law. Roth said celebrities who endorse products could be charged with aiding and abetting fraud if the products they promote turn out to be shams.
Read the charges against Floyd Mayweather below; click here to read the charges against DJ Khaled.
The FINNEY phone came out today at a launch event in Barcelona.
The $999 phone is the first of its kind, integrating blockchain technology at its core in order that its users may can securely use blockchain products. The product aims to address issues that cryptonaughts face in mobile computing, particularly those related to securely transacting, and it is the latest in a projected long line of offerings from the makers of SOLARIN.
The phone runs on SirinOS, which is a fork of Android with the express intention of more deeply integrating blockchain capabilities and a decentralized application (“dApp”) marketplace. It sports a secondary screen called a “safe screen” which is two inches in size and allows the user to securely access a built-in cold storage wallet. In shape and design, it is not unlike the SOLARIN.
SirinOS will not be limited to the FINNEY, as SIRIN LABS said in their launch statement today that they are “also looking for strategic OEMs to implement SIRIN OS™ in additional consumer devices.” This means that the launch could attract interest from other phone manufacturers like ASUS, Motorola, or Huawei. HTC has already announced its own intentions to bring a phone to market, but they also have a history of supporting multiple operating systems, having at one time had both a popular Windows phone and several Android phones on the market. Dedicated HTC users have even managed to get Blackberry’s operating system running on the hardware.
Sirin simultaneously launched a “concept store” in London which will double as an educational hub for users. That is: people who buy this phone for its other features (such as security and competitive design) will be able to have all their questions answered at this place. The pre-launch website bills an “incentivized learning” platform or “learn and earn.” The description amounts to a blockchain-based Apple Genius Bar.
In anticipation of SirinOS, the FINNEY Phone, and the stores being launched, the SRN token has been available for some time on several exchanges. It is described as a “utility token” which acts as the cornerstone of the presented ecosystem. Exactly what role it plays was outlined in their March release of the whitepaper:
“[…] purchasing SIRIN LABS’s products, applications and services from the moment the SRN tokens are issued and distributed to crowdsale participants (24hr. after crowdsale ends). Moreover, special discounts will be given to SRN Token holders who pre-order or purchase products from SIRIN LABS using their SRN tokens.”
True to their word, those who purchase the FINNEY with SRN tokens will receive a 10% discount today. The token was trading at around ten cents Thursday morning.
Speaking of Apple, Sirin has gone into business with the same manufacturer as Apple, using Foxconn to mass-produce the world’s first blockchain phone on the market. In an interview with CCN, SIRIN CMO Nimrod May said:
“By choosing Foxconn to build the FINNEY, we’re demonstrating the public’s desire to have a mass-market smartphone that is able to safely and securely operate within blockchain and cryptocurrencies.”
A Native Mobile Platform for DApps?
There are inherent limitations to requiring every application installation to have a separate wallet implementation, and so forth. SIRIN’s phone seems to be one effort in reducing this friction – with crypto built in at the core, developers will now have a target device replete with a decentralized applications market to get listed in. Whether or not the FINNEY is a successful product, the introduction of a fully-developed crypto OS for phones is an important milestone for cryptocurrency as a whole.
$999 Price Point
There was a time when $999 would sound like too much for a phone, even an executive-class phone which puts next-generation financial management solutions in one’s pocket, but these days it is a price point which can be considered competitive when all of the features, unique and industry-standard, are considered. The FINNEY sports a 12MP camera, 128GB built-in storage (expandable), the noted “safe screen,” the ability to run regular apps from Android, and, of course, a world of possibilities through the decentralized applications forthcoming.
The US Securities and Exchange Commission (SEC) has charged boxing legend Floyd Mayweather and recording artist DJ Khaled with illegally promoting initial coin offerings (ICOs).
The two celebrities,had been among the most prolific ICO promoters, pumping crypto tokens on social media while sometimes failing to disclose that the posts — which in several cases promoted illegal securities offerings — were paid-for advertisements.
The two celebrities each agreed to pay disgorgement, penalties, and interest to the SEC, though neither formally admitted to or denied the findings. Moreover, Mayweather and Khaled agreed to refrain from promoting securities for three years and two years, respectively.
“Investors should be skeptical of investment advice posted to social media platforms, and should not make decisions based on celebrity endorsements,” said Enforcement Division Co-Director Steven Peikin. “Social media influencers are often paid promoters, not investment professionals, and the securities they’re touting, regardless of whether they are issued using traditional certificates or on the blockchain, could be frauds.”
Mayweather and Khaled have also been named in a lawsuit over their involvement in promoting the Centra Tech ICO, which a judge ruled was an illegal securities offering and whose founders the SEC has charged with fraud.
The Asia-Pacific Head of Trading at foreign exchange brokerage Oanda has predicted that bitcoin price will fall as low as $2,500, claiming the behavior of the asset over the past few months has not demonstrated to investors that a bottom is in.
Speaking on Bloomberg Markets: Asia, Stephen Innes stated that despite the pronouncements of “soothsayers”, the current situation remains a decidedly negative one for investors, who will consequently continue to sell or avoid buying bitcoin.
Responding to a question about how low bitcoin will fall before bottoming, Innes remarked that for a variety of reasons, cryptocurrency remains an unattractive buy in the near term. The key factor behind this according to him is the atmosphere of uncertainty about where the market is headed as bitcoin continues to its protracted bear run.
In his words:
“What I’m really looking at here is the way coins have been trading over the last few months. It’s indicated that the bottom is not in so therefore I don’t think any mature investor is willing to catch this falling knife. And that tells me there is more room to go and as soon as we hit some of these key round figure inflection points like $3500 and $2500, the psychological impact will weigh on more inexperienced traders.”
Going further, he remarked that while he remains optimistic on blockchain as a long-term concern, the current atmosphere of uncertainty makes cryptocurrency unappealing in the near term to both experienced and inexperienced traders, which will have a knock-on effect on the bitcoin price.
This he said, is amplified by the continued reluctance of Wall Street to get fully involved in cryptocurrency investment, a tightening regulatory landscape and the recent Bitcoin Cash hash war, which collectively add up to produce the current situation.
Summing up his thoughts on the current state of the market, he said:
“Given the momentum we’ve had over the past year, this price action is not positive, and despite what soothsayers say, it’s not a good time to go in because we can’t quantify what we’re really buying at these levels so this is the issue I have with trying to understand coins at specific inflection points.”
While bitcoin continues its slide, falling a further seven percent on Tuesday morning, not all market participants are pessimistic. Reported on Tuesday that NASDAQ, the world’s second largest crypto exchange has announced plans to launch a bitcoin futures market in Q1 2019.
It would seem that tech entrepreneurs like James Ju aren’t put off by the current state of the cryptocurrency market, so much so that he has rounded up a group of investors to fund his latest venture of opening a crypto exchange.
Ju, who worked as the Chief Technical Officer at Huobi, recently announced that he would be launching a cryptocurrency exchange by the end the year. The exchange, which will be called BHEX, raised $15 million in equity from a wide array of institutions (such as OKEx and Huobi, Ju’s former employers). The exchange also ran a token round, which attracted high profile funds including DHVC, Dfund, BlockVC and Genesis Capital.
According to its press release, the founding members of the crypto trading platform BHEX bring extensive experience from “first-tier technology and financial companies” including Google, Alibaba, and others.
Ju explained that the Blue Helix technology would be open-source, once development is completed. With this technology, BHEX will be able to create a community-managed custody and clearing managed system.
BHEX is touted as a next-generation digital asset trading platform, which would be powered by the decentralized asset custody and clearing technology developed by Blue Helix, a company Ju also controls. The exchange is establishing offices in Singapore, the United Kingdom and the United States.
The digital asset platform will provide crypto-to-crypto trading, as well as over-the-counter (OTC) options and pairs of fiat currencies. Fiat to crypto option in Yuan (CNY) will be available, and this is seen as a major advantage to Chinese crypto enthusiasts who are banned from trading within the borders of their country.
A former executive at Huobi, Ju was instrumental in the redesigning and upgrade of Huobi’s crypto trading system, streamlining the processes and making it easier for traders to use, propelling the exchange to the world’s largest exchange by trade volume. On leaving Huobi, Ju was hired as Vice President of Technology at X Financial, a financial service provider that is listed on the NYSE. Not satisfied with his achievement in the crypto sector, Ju left X Financial to start Blue Helix, a crypto-based firm which aimed to develop a new digital asset custody and trading system.
Ju’s team at Huobi also included Tyler Wu, the current Global Managing Director at BHEX. At Huobi, Wu served as the Managing Director of the company in Singapore.
A decentralized application (dApp) based on the Ethereum (ETH) network will begin rewarding residents of Manila, the Philippines, with ETH for cleaning up a heavily polluted beach in the capital city of the nation.
Joseph Lubin, an Ethereum co-creator and the CEO of ConsenSys, the largest blockchain software development firm in the world, said:
“In Manila, participants will be paid in ETH for spending a few hours cleaning up one of the most heavily polluted beaches in the world. Bounties Network and ConsenSys Impact are proving a new model where people fund causes directly without intermediaries.”
Why the Philippines is a Great Place to Start
Bounty has been recognized as a viable application of blockchain technology because participants are compensated transparently using the public ledger of a blockchain network.
Bounties Network, a dApp on Ethereum, enables anyone on the platform to create bounties and reward participants with ETH, supporting various causes and initiatives.
Recently, ConsenSys Impact, a subsidiary of the New York-based ConsenSys, introduced a non-profit initiative called “Bounties for the Oceans: Philippines Pilot – Sustained, Verifiable Plastic Cleanups” to promote the usage of the blockchain in the country.
“Plastic pollution costs the lives of 1 million seabirds and 100,000 marine mammals per year. Fish eat plastic, and we eat the fish. Plastic causes $8 billion in damage to marine ecosystems each year. With Bounties for the Ocean, we are asking people everywhere to submit verifiable proof of their direct plastic cleanup contribution as a way of fostering widespread and long-term behavioral shift. Do not depend on centralized organizations, go out there and do it yourselves,” the program read.
The initiative comes in a time during which the Philippines recently re-opened Boracay, a popular tourist destination in the country known for its crystal-clear seawater, acclaimed diving spots, and distinctive white sugary and powdery sand after the island suffered from heavy pollution.
The Philippines is considered an ideal region to kickstart non-profit blockchain-based initiatives because the country has adopted cryptocurrencies like Bitcoin as a legitimate form of payment and the central bank officially recognized Bitcoin as a remittance method.
As a result, the usage of Bitcoin and other major cryptocurrencies like Ethereum has increased rapidly, facilitated by the work of local platforms like Coins.ph that have provided significant liquidity to local users.
Through partnerships with major commercial banks, remittance outlets, credit card companies, electric grid operators, and convenience stores, Coins.ph has allowed cryptocurrency users to deposit and withdraw digital assets through tens of thousands of physical locations. The platform, which remains as the biggest cryptocurrency application in Southeast Asia, now has over 5 million active users.
ConsenSys and Union Bank
In May, ConsenSys also secured a strategic partnership with Union Bank, one of the largest commercial banks in the Philippines, to conduct a real-time domestic retail payment system pilot test with five rural banks.
At the time, Union Bank technology and operations chief Henry Aguda said:
“With this [blockchain platform], they don’t have to spend anything. They just have to load the application i2i in their computers, tablets, or smartphones then they can transact bank-to-bank connected to blockchain.”
A large number of companies including Consensys and several high profile conglomerates in South Korea are working with individuals, businesses, and cryptocurrency ventures in the Philippines to help the local market sustain its exponential rate of growth.
Blockchain voting could soon be a reality in South Korea if the trial on a system based on distributed ledger technology turns out successfully.
According to The Korea Times, the development of the blockchain-based voting system will be completed in December. The system which is the brainchild of South Korea’s National Election Commission and the Ministry of Science and ICT is aimed at enhancing the security and reliability of online voting services.
“We expect the blockchain-based voting system to enhance the reliability of voting. The ministry will continue to support the application of blockchain technology to actively utilize it in areas that require reliability,” Kim Jeong-won, an official at the Ministry of Science and ICT, said.
Besides preventing the falsification of votes, the blockchain-based system is expected to allow candidates and observers access to data. Per the Ministry of Science and ICT, the system will be applied at all the stages of online voting. Depending on how the trial pans out, the ministry and the election body will then integrate it with South Korea’s online voting system known as K-Voting.
Community Participation in Resource Allocation
This is not the first time that blockchain-based voting is being tried out in South Korea. In March last year, the country’s Gyeonggi-do Province used a blockchain-based voting system in deciding which community projects to prioritize in the budget.
The initiative was, however, on a small scale as only about 9,000 residents participated. This did not stop officials in the province from predicting the revolutionary impact blockchain technology will have on the world.
“Blockchains will change the world within a few years just as smart-phones did. We can complement the limits of representative democracy with some direct democracy systems by using blockchains, the technology of the Fourth Industrial Revolution,” Nam Kyung-pil, an official in the provincial government of Gyeonggi-do.
Other places where blockchain-based voting has been tested on a small scale include the state of West Virginia in the U.S. After announcing in April that it would offer blockchain-based voting to West Virginians stationed abroad such as military personnel during the Midterm elections, the state successfully pulled it off in the recently held polls with nearly 150 voters based overseas using the system.
Despite the enthusiasm that has been shown for blockchain-based voting, there have been reservations in some quarters. Some of the concerns include the fact that there is a potential for one’s voting choices becoming de-anonymized in the future and therefore becoming publicly available.
Additionally, it has been suggested that blockchain-based voting would increase the likelihood of vote buying as it would be possible to verify whether a voter who was bribed voted according to the ‘deal’. With voting booths, this is unlikely as only the voter knows the choices they ticked.
A South Korean lawmaker has reportedly introduced a bill to promote cryptocurrency trading and the development of crypto exchanges. In addition to requirements such as capital, manpower, and internal systems, the bill proposes establishing a committee to promote and support crypto trading.
Promoting Crypto Trading
Korean lawmaker Kim Sun-dong, a member of the National Assembly’s Political Committee, announced last week that he has initiated the Digital Asset Trading Promotion Act, local media reported. Seoul Finance elaborated:
‘The Digital Asset Trading Promotion Act’ includes a comprehensive plan for establishing a guideline for promoting the development of virtual currency exchanges and blockchain technology, tax reduction and exemption, measures against hacking damage, and prevention of market disturbances.
Kim emphasized the need for a law dedicated to promoting crypto businesses to avoid companies leaving Korea, citing Bithumb as an example. He pointed out that even though crypto transactions in Korea accounted for a large percentage of the domestic stock market transactions at the beginning of this year, one of the largest crypto exchanges, Bithumb, was recently sold to a Singapore-based consortium.
He also noted that Japan has already completed legislative procedures to institutionalize crypto transactions and the U.S. has allowed the trading of cryptocurrency derivatives.
About the New Crypto Bill
The bill first defines “virtual content with an apparent value such as online money, points, game items and virtual currencies as digital assets,” the publication detailed. It also defines the operators dealing with them as digital asset trading companies. The news outlet added:
Those who want to operate a digital asset trading business should have more than 3 billion won [~$2.66 million] in capital, enough manpower, computerized systems, and physical equipment to be approved by the Financial Services Commission [FSC].
If an exchange is hacked and its customers suffer losses of crypto assets, the bill submits that the exchange must assume the liability for damage to the traders.
The publication added that some examples of industry promotion mentioned in the bill include the establishment of a digital asset trading committee, the promotion of research and development projects, financial support, professional training, and tax reduction. According to Metro Seoul newspaper, the committee will be tasked with resolving issues requested by the FSC such as setting standards and policies relating to crypto assets, as well as coordinating between relevant administrative agencies.
Kim was further quoted as saying:
The government is focusing only on the risk of virtual currency and concentrating only on the crackdown of illegal activities … In order to lead the global trend of blockchain technology development, it is necessary to prepare laws and regulations as soon as possible.
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has taken action against two Iranian ransomware “facilitators.” The actions include publishing the perp’s cryptocurrency wallet addresses, and warning the cryptocurrency and financial communities that anyone transacting with the accused could be subject to secondary sanctions.
INVOLVEMENT IN THE SAMSAM RANSOMWARE ATTACKS
The OFAC stated that the two “Iran-based individuals,” are Ali Khorashadizadeh and Mohammad Ghorbaniyan. According to a U.S Treasury press release today they helped exchange Bitcoin ransom payments, obtained by “Iranian malicious cyber actors” involved in the SamSam ransomware scheme, into Iranian rial.
Khorashadizadeh and Ghorbaniyan are designated for:
Having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the SamSam ransomware attacks.
OFAC has identified and published the two wallet addresses associated with the “facilitators.” The cryptocurrency wallet addresses processed around 6,000-7,000 Bitcoin (BTC) $4221.06 +0.52%transactions across 40 cryptocurrency exchanges. Even at today’s Bitcoin price, this would equate to a value of over $25 million.
The U.S Department of Justice has also indicted two actors for infecting over 200 networks with SamSam ransomware in the U.S, UK, and Canada since 2015. One hospital in Indiana lost all its IT networks during storms, leading them to pay the ransom to protect patients.
The news quickly sparked a conversation on social media.
1/ BREAKING: For the first time in history, the US has sanctioned a bitcoin address. https://t.co/5iFmXAaF8l
— Marco Santori (@msantoriESQ) November 28, 2018
1/ Today, the US Department of the Treasury, through the Office of Foreign Assets Control (OFAC) took the historic step of adding two Bitcoin addresses to its list of sanctioned parties. In this thread, I'll break down what that means.
— Marco Santori (@msantoriESQ) November 28, 2018
FIRST PUBLISHING OF WALLET ADDRESSES
OFAC says that although it usually shares “identifiers” with designated people:
Today’s action marks the first time OFAC is publicly attributing digital currency addresses to designated individuals.
The operators recognizing or finding the published wallet addresses are required to comply with OFAC obligations regardless of whether transactions are conducted in fiat or digital currency:
Like traditional identifiers, these digital currency addresses should assist those in the compliance and digital currency communities in identifying transactions and funds that must be blocked and investigating any connections to these addresses.
Any property or financial “interests” of the individuals are now subject to OFAC sanctions and “U.S. persons generally are prohibited from dealing with them.”
The Treasury and OFAC actions today are part of a wider round of sanctions and “U.S economic pressure” targeting Iran “designed to blunt the broad spectrum of the Iranian regime’s malign activities and compel the regime to change its behavior.”
Treasury Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker warns:
Treasury will aggressively pursue Iran and other rogue regimes attempting to exploit digital currencies and weaknesses in cyber and AML/CFT safeguards to further their nefarious objectives.
A security bulletin released by Kaspersky Labs states that botnets are increasingly being used to distribute illicit crypto mining software.
In the note, analysts for the cybersecurity firm said Wednesday that the number of unique users attacked by crypto miners grew dramatically in the first three months of 2018. Such malware is designed to secretly reallocate an infected machine’s processing power to mine cryptocurrencies, with any proceeds going to the attacker.
According to Kaspersky, more users were infected in September than in January and “the threat is still current,” though it is unclear whether the recent collapse in the crypto markets’ prices will have an impact on the infection rate.
The firm’s analysts said that a noticeable drop in distributed denial of service (DDoS) attacks may be attributable to “the ‘reprofiling’ of botnets from DDoS attacks to cryptocurrency mining.”
As the note detailed:
“Evidence suggests that the owners of many well-known botnets have switched their attack vector toward mining. For example, the DDoS activity of the Yoyo botnet dropped dramatically, although there is no data about it being dismantled.”
A possible explanation for cybercriminals’ increased interest in crypto-mining may lie in the fact that once the malware is distributed, it’s difficult for victims and police to detect.
Of the various types of software identified and cataloged, most reconfigure a computer’s processor usage to allocate a small amount to mining, keeping users from noticing.
The organization further looked into reasons for the prevalence of this type of malware in some regions over others, concluding that regions with a lax legislative framework on pirated and illicitly distributed software are more likely to have victims of cryptojacking.
U.S. users were the least affected by the attacks, constituting 1.33 percent of the total number detected, followed by users in Switzerland and Britain. However, countries with lax piracy laws like Kazkhstan, Vietnam and Indonesia topped the list.
“The more freely unlicensed software is distributed, the more miners there are. This is confirmed by our statistics, which indicates that miners most often land on victim computers together with pirated software,” the report said.
Malaysian Finance Minister Lim Guan Eng has revealed that a new set of comprehensive regulations guiding the activities of crypto exchanges and ICOs will come into effect in Q1 2019.
Speaking in Kuala Lumpur on Wednesday at the FinTech Conference 2018 organised by Malaysia’s Securities Commission, he revealed that the new regulations are part of efforts by the Malaysian Securities Commission (SC) to catalyse the growth of alternative fundraising and investment in new asset classes.
Comprehensive Regulatory Framework At Last?
Making the announcement while delivering the keynote address at the event, he stated that the system jointly developed by Bank Negara Malaysia (the country’s central bank) and the SC would serve as a comprehensive regulatory framework for all participants in the crypto industry. Lim also remarked that amidst an atmosphere of suspicion, consumer protection took priority as the overriding factor in making the decision.
“While some parties might still be skeptical of this space, there can be no doubt that we need appropriate regulations to be put in place and enforced to safeguard the interest of investors. […] Both Bank Negara and the SC, in terms of formulating this framework will be under the auspices of the Finance Ministry. The Finance Ministry will lead the committee comprising of Bank Negara, the SC, and the MOF itself.”
According to Lim, the regulatory framework forms a key part of the Malaysian government’s efforts to spur the growth of alternative financing for “high potential and innovative MSMEs”, which is a strategic focus of the government as it seeks to encourage private sector growth and reduce government fiscal burdens.
In a financial atmosphere where conventional funding sources are either overstretched or unwilling to lend to innovation-led startups, the growth of cryptocurrency-led financing solutions such as ICOs provides a welcome alternative to Malaysia’s budding knowledge economy. Seeing an opportunity for economic growth here, Malaysian authorities have taken a series of steps designed to facilitate such alternative investment avenues.
It has provided funding for the Co-Investment Fund, a program that works with equity crowdfunding and peer-to-peer financing platforms, designed to contribute a matching 25 percent sum alongside all private investment.
In Lim’s words:
“Through this, we hope to be able achieve faster fund disbursements to support a broader range of deserving MSMEs, as well as provide greater transparency to how public funding are being utilised.”
The move potentially comes as a significant boost to cryptocurrency adoption in the country after prior hints at coming crypto regulation. Earlier in the month, Lim addressed the Malaysian parliament stating that while the government is not opposed to cryptocurrency, it wants its regulatory guidelines to be followed.
Nasdaq — the world’s second-largest stock exchange — plans to roll out bitcoin futures in the first quarter of 2019 through a partnership with investment management firm VanEck.
Gabor Gurbacs, VanEck’s director of digital asset strategy, said the companies will launch a variety of bitcoin derivatives in early-2019, including a “regulated crypto 2.0 futures-type contract.”
Gurbacs made the announcement during the Consensus: Invest conference in New York on November 27, CNBC reported.
‘Transparent and Regulated’
In a follow-up tweet, Gurbacs said Nasdaq and VanEck will unveil “transparent, regulated and surveilled digital asset products, such as bitcoin futures contracts.”
Nasdaq has been working with the Commodity Futures Trading Commission (CFTC) to make sure it fully complies with any lingering regulatory concerns the country’s main swaps regulator has.
Gurbacs confirmed that VanEck also “ran a few extra miles working with the CFTC to bring about new standards for custody and surveillance.”
@Nasdaq and VanEck’s @MVISIndices announces #index #partnership and intention to bring to market transparent, regulated and surveilled #DigitalAssets products, such as #Bitcoin futures contracts. More info to come. Share & follow us. #crypto #futures #SMARTS #ConsensusInvest pic.twitter.com/Q2oCZx4pp1
— Gabor Gurbacs (@gaborgurbacs) November 27, 2018
The CFTC, which regulates bitcoin as a commodity, has so far approved just two crypto futures products: one from the Chicago Mercantile Exchange (CME), and another from the Chicago Board Options Exchange (CBOE)
ICE Will Launch Bitcoin Futures In Q1
Meanwhile, Nasdaq’s rival ICE (Intercontinental Exchange) — the parent company of the New York Stock Exchange — is also charging ahead with its own plans to launch a physically-settled bitcoin futures product in the first quarter of 2019.
Bakkt, a cryptocurrency exchange built by ICE, plans to roll out its bitcoin futures market on January 24, after scrapping the original launch date of Dec. 12, 2018.
ICE cited an unforeseen increase in demand for its futures product, the Bakkt Bitcoin (USD) Daily Futures Contract, for the delay.
VanEck: SEC Will Approve Bitcoin ETF Soon
Separately, VanEck is still trying to win approval from the Securities and Exchange Commission to launch the first-ever bitcoin ETF.
In August 2018, the SEC rejected nine bitcoin ETF applications, dashing the hopes of crypto evangelists like the Winklevoss twins, who have repeatedly failed to win SEC approval.
In its order rejecting the latest round of bitcoin ETFs, the SEC said the applicants failed to demonstrate how they could prevent fraud and market manipulation.
Despite the recent SEC rejections, VanEck’s Gabor Gurbacs said he believes SEC approval is around the corner.
“We are the closest that we can be,” Gurbacs told Fox Business. “It is very clear to me that America wants a bitcoin ETF and we are here to build it.”
Despite the recent market slump, Gurbacs is supremely confident about the long-term future of the crypto industry. “I say bitcoin is digital gold, and we should not dismiss a potential opportunity for the next financial system,” he said.
According to David Puell, a Bitcoin and market analyst, the dominant cryptocurrency could either reach its bottom by the end of December or within the first quarter of 2019.
The $4,300 region, which Bitcoin entered after enduring a 35 percent correction from around $6,600, has been established as a comfortable region for the asset. With resistances stacked up above the $4,300 mark, the analyst explained that a pullback from the current price could trigger exhaustion in the lower range.
“Since volatility has dramatically increased, it is pertinent to have a granular view of current volume node structure. Resistances have piled up, so any pullback must be closely watched for any sign of exhaustion. The $4,300 area is the center of mass.”
Climax by December or February of 2019
Based on the steep decline in the price of Bitcoin over the past several months and the major resistance levels that have formed in the range of $4,000 to $6,000, a further drop below $4,000 could result in the market losing most of its momentum it recently gained.
A potential bottom target, according to Puell, is $2,800, which would signify an 85 percent drop from its all-time high price at $19,500.
But, Puell emphasized that a bottom can only be achieved by Bitcoin if the sell-off reaches its climax, bears lose leverage, and the market begins to show exhaustion.
Currently, the market is extremely volatile and is moving up and down by 10 to 20 percent on a daily basis. In the past 24 hours, Bitcoin surged by 12 percent while Stellar, another major cryptocurrency, spiked by nearly 15 percent.
“Weekly Gaussian bands (1) show a crucial confluence with the general $2,800 high value node zone (2). This gives a more detailed view of the nuances that come with that level in terms of potential swing and closing weekly price behavior. This general area is also supported by the 200-week MA and a good deal of buying positions (volume at time) back in Sept 2017,” said Puell, adding that the bear market could extend to 2019.
“Given the strength of the downtrend and current information, a selling climax may come as soon as December and as late as February.`”
Willy Woo, the founder of Woobull.com, proposed a similar time frame for the end of the Bitcoin bear market. Earlier this month, Woo stated that the market is likely to reach its bottom by mid-2019, based on fundamental indicators like the transaction volume and user activity of major cryptocurrencies.
Analysts generally agree that to recover from the intense sell-off of November that resulted in the loss of nearly $80 billion from the cryptocurrency market, a months-long consolidation period will be needed, and major digital assets will have to demonstrate a relatively high level of stability in a lower price range.
Small market cap tokens have shown a promising upward price movement in the past 24 hours, with some including ICON rising by more than 30 percent. But, most assets are still down substantially since October.
Following an announcement from Bitfinex yesterday regarding their newfound “neutrality” to tether (USDT) and intent to use other stablecoins in addition to USDT, crypto firm Tether has revived its former business model of enabling 1:1 redemption of USDT for USD on its own platform.
“Now, thanks to stronger banking as a result of our new relationship with Deltec, Tether is able to return to its original vision of having a wallet for creating and redeeming directly on its own platform without having to rely on a third party. This update allows the immediate withdrawal of Tether to fiat (1:1), with the ability to acquire coming soon.”
Users who want to cash out USDT at Bitfinex will do so at market rates, rather than 1-for-1, right along with the other stablecoins that are being offered. As we’ve reported in the past, tether occasionally divorces from its dollar peg due to market pressures, sometimes by as much or more than five cents.
Tether also published a rate card regarding the deposits and withdrawals of fiat currency on the platform. To use Tether’s withdrawal system directly, clients will need to be working with more than $100,000, at which size they are charged 0.1% to make a fiat deposit or the greater of $1000 or 0.4% to withdraw. Customers of any size may only make one fiat withdrawal per week. Transactions over $1 million are charged a 1% fee while those over $10 million are charged a whopping 3% – or a minimum of $300,000. Deposit fees are flat, however, at 0.1%, no matter the size.
Traders looking to realize gains will have to determine the best route to do so. There is no fee for moving USDT in and out of one’s official Tether account, so traders will have to develop strategies to maximize the utility of the fee structures at the dozens of places they could potentially exchange their tokens for dollars and/or other cryptos.
On the other hand, newcomer Paxos Standard (PAX) charges no fees. Withdrawals are not instant due to the way Paxos works, but they happen on a regular schedule which is published by the company. They also reserve the right to change their fee structure at any time. Similarly, Circle’s USD Coin (USDC) does not charge a fee for withdrawals. Both it and Paxos have a minimum of $100 for conversions.
Interestingly, on Binance at time of writing, Paxos Standard was trading at a premium against USDT, meaning that a user who wanted to convert from USDT to Pax in order to avoid fees would essentially do so at a 1% fee plus exchange fees. Seems anyway you go, with tether, you’re going to pay.
Nearly three months have passed since Goldman Sachs, a $73 billion investment bank based in the US, said that it is not ready to facilitate the delivery of “physical Bitcoin” to its clients. The banking giant is still not able to hold cryptocurrencies on behalf of its clients, despite growing demand from clients.
At a conference in New York, Justin Schmidt, the head of digital asset markets at Goldman Sachs, said:
“One of the things they ask me is ‘Can you hold our coins?’ and I say ‘No, we cannot. One of the things we have to take into consideration when we’re building out our business is what we can and cannot do from a regulatory perspective.”
When Can Goldman Sachs Enter the Bitcoin Market?
Goldman Sachs has been facilitating investments into Bitcoin futures for its customers for awhile. In an interview with Bloomberg TV in China, for the first time, Goldman Sachs CEO David Solomon directly confirmed that the company has been clearing Bitcoin futures contract since June.
“We are clearing some futures around Bitcoin, talking about doing some other activities there, but it’s going very cautiously. We’re listening to our clients and trying to help our clients as they’re exploring those things too. Goldman Sachs must evolve its business and adapt to the environment,” Solomon said.
The US-based bank has already entered the cryptocurrency market and has been assisting investors to trade Bitcoin in the futures market.
However, Bitcoin futures markets that are currently in existence in the US market do not promise the physical delivery of Bitcoin, meaning investors are not technically buying Bitcoin from the futures markets but rather contracts that reflect the price of the dominant cryptocurrency.
Bakkt, the cryptocurrency trading exchange developed by ICE, the parent company of the New York Stock Exchange, is set to open a futures market in January that delivers physical Bitcoin to its investors, but as of now, no regulated US futures market holds cryptocurrencies for its customers.
For Goldman Sachs to hold cryptocurrencies for its clients, it needs regulatory approval to operate as a regulated and trusted crypto custodian. Several companies like Coinbase and BitGo have implemented unique methods to be approved as a custodian.
BitGo, for instance, launched its own regulated custodian, BitGo Trust.
Goldman Sachs executive Justin Schmidt said that custody is an important component which the bank lacks, and without regulatory approval, it will not be able to directly hold digital assets for the bank’s client base.
“Custody is this foundational piece that is absolutely necessary. Custody is part of an overall integrated system where different parts need to work well with each other and safely with each other and you have to be able to trust all the different parts in that chain, from buying something to transferring it to storing it in for the long-term,” added Schmidt.
Clients are Asking
As Schmidt said, clients at Goldman Sachs have begun to ask the bank to provide custodian solutions to protect their investments in digital assets. Over time, as the space finds more regulatory clarity, the bank could find an appropriate time frame to begin operating as a custodian. But as of now, Goldman Sachs believes it is not ready to do that just yet.
Galaxy Digital Holdings LP, the cryptocurrency merchant bank founded by prominent crypto investor Mike Novogratz, announced losses totaling $41 million for Q3 2018, bringing the total losses for the year so far to $136 million. Bloomberg reports that the Q3 loss was driven by net realised and unrealised losses on digital assets, chiefly caused by losing positions of Ether, XRP, and Bitcoin in a persistently bearish year for the cryptoasset category.
While it is no secret that 2018 has generally been a bad year for cryptocurrency traders, the financial report by Galaxy Digital provides a rare window of insight into just how affected crypto traders have been by depressed and falling asset prices that have persisted throughout the year.
Bad Year Set to Get Worse?
Earlier in the month, Novogratz expressed frustration at the current market situation, stating that trying to build a crypto-focused business amidst the carnage “sucks.” According to him, Galaxy Digital faces a completely different set of challenges to a conventional merchant bank, chief of which is that every downward price spike acts as an existential threat to the business and has staff looking over their shoulders.
After losing $134 million in Q1 2018, the company posted an improved performance report in Q2 2018, recording a net income of $35 million and trading losses cut to just $1.5 million. The latest figures, however, show that the company’s position is still far from great, with Q4 figures expected to be even worse following the market rout that has taken place over the past month.
Speaking in its filing, the company identified solid trading volumes and increased competition for arbitrage opportunities as the principal reasons for its poor Q3 performance. It also revealed that the fair value of its digital asset holdings stands at $90.6 million net of short positions, significantly less than the $172 million that the assets cost.
An excerpt from the report reads:
“While we continue to improve and strengthen our trading business, lack of overall trading volume in cryptocurrencies has been a headwind.”
Galaxy Digital’s shares are currently trading at an all-time low after tanking 55 percent in November, but founder Novogratz continues to be bullish on cryptoassets, stating recently that he expects 2019 to see a movement of institutional investors away from crypto funds and into direct crypto investment. He also predicted that 2019 will see bitcoin achieving a record high of $20,000 on institutional FOMO (fear of missing out), after ending 2018 on a high at $9,000.
In every market slaughter, there are some winners. Those with sell orders over 50 satoshi on Dogecoin may have noticed their sales went through recently.
Demand for Dogecoin has seemingly picked up whilst the rest of the market was on a sell frenzy. The Dogecoin price went up about 6 Satoshi in the last 48 hours, with more than $11 million in total trade volume, a gain of more than 10%.
Dogecoin is an oft-forgotten coin, although it is accepted by several major providers and is traded on every respectable altcoin exchange. The coin was born of the meme culture of the early 2010s and its only primary differences to Bitcoin are that it is inflationary in nature – it will never stop producing new tokens – and it uses Scrypt, the same hashing algorithm as Litecoin.
In the early days of its community, Dogecoin achieved some interesting marketing feats, including sponsoring a professional race car driver and a lunar rover.
The explanation for the increase in price may not be demand, exactly. It may rather be a correction on the part of sellers who are trying for a USD figure – as the price of Bitcoin goes down, necessarily the amount of satoshi a given altcoin is valued at must go up for the price to remain “stable.”
Still, the market downtown as a result of Big Bitcoin’s tanking illustrate how the majority of cryptocurrencies still rely on Bitcoin for liquidity and valuations. There is a possibility that in the coming years, Stablecoins will become the new metric by which most altcoins are judged, fulfilling the prophecy of full-scale divorce of cryptos from the necessary Bitcoin pricing. If or when this happens, the actual value of tokens will be more clearly expressed. Currently most or, really, all calculations are relational to the Bitcoin/fiat markets, and as such it’s hard for something like Dogecoin, which finds its best use case in tipping and microtransactions, to truly find their value.
In some cases, Dogecoin or Litecoin are the best way to make withdrawals from exchanges which have high fixed fees for Bitcoin.
Whatever the case, the price of Dogecoin will always have to answer to its mammoth supply. A fast-moving, always-on public blockchain could see some use in the tokenization of all the things, but no one to our knowledge has pursued anything like that yet.
The price of Bitcoin (BTC) has increased by more than eight percent in the past 24 hours, as the dominant cryptocurrency recovered to $4,000.
On fiat-to-crypto exchanges like Coinbase and Bitstamp, Bitcoin is yet to surpass $4,000 mark but on crypto-to-crypto trading platforms, the price of BTC hovers at around $4,100.
Fueled by the corrective rally of BTC, major cryptocurrencies in the likes of Ripple (XRP) and Ethereum (ETH) recorded gains in the range of six to nine percent, with Ethereum rebounding to $115.
The cryptocurrency market has added $11 billion to its valuation and tokens such as VeChain (VET), 0x (ZRX), and Zilliqa (ZIL) have recorded gains of around 15 to 20 percent.
Ready For Full Reversal?
On November 27, prior to the eight percent increase in the price of BTC, Crypto Rand, a prominent cryptocurrency trader, stated that depending on the daily close of Bitcoin, the asset could experience a short-term trend reversal.
“Keeping an eye on the daily close of Bitcoin. Looking to print a bullish hammer that could lead the reversal,” the analyst said at the time.
Since then, the price of Bitcoin along with its volume have increased substantially, bringing up the daily volume of the rest of the market from around $12 billion to $18 billion.
As Bitcoin ended the day with a positive short-term movement and a corrective rally, the analyst added:
“Bitcoin daily bullish hammer in play. First reversal signal on weeks.”
Keeping an eye on the daily close of #Bitcoin.
— Crypto Rand (@crypto_rand) November 27, 2018
On Tuesday, Don Alt, a cryptocurrency technical analyst, echoed a similar sentiment, stating that BTC is in a prime position to engage in a short-term positive movement.
“Constant bouncing on a strong demand zone. If it fails I expect a very violent move down. If it holds we’ll most likely stair step up. I’m scalping the small TF’s based on this. Should breakout soon otherwise the bulls are in trouble.”
Currently, Bitcoin faces a major resistance level in the range of $4,100 to $4,200. A breakout of the $4,150 mark could signal a full trend reversal for BTC after weeks of a downward movement. But, based on the time frame and the past performance of the asset in the last two weeks, a sudden breakout of large resistance levels remains a challenge for BTC.
Be Aware of Tokens
The majority of small market cap tokens in the market demonstrated fairly large gains against the U.S. dollar as the price of BTC demonstrated some momentum.
But, tokens are down on average 30 to 50 percent against BTC and during a period in which the U.S. Securities and Exchange Commission (SEC) is accelerating its investigation into dozens of initial coin offering (ICO) projects that are generally considered to be securities, tokens present an extremely high-risk, low-reward opportunity.
Several tokens, including Zilliqa, that are anticipating the completion of major network upgrades and improvements in the upcoming weeks have increased in value against most large-scale cryptocurrencies.
The cryptocurrency market is a target of the same manipulation and abuse that theequity, commodity and forex markets have suffered for years, and exchanges that wish to protect their clients need ways to monitor trading activity. Bitstamp is now the latest exchange to implement such a tool.
Bitstamp to Deploy Irisium
Bitstamp has announced a partnership with Irisium to launch a market-monitoring platform on the exchange. Irisium, a subsidiary of Swedish stock-exchange technology developer Cinnober, is a market surveillance service provider for traditional exchanges, clearing houses, regulators and trading firms around the world.
“We are committed to crypto in the long term,” said Bitstamp CEO and co-founder Nejc Kodrič. “Our desire is to provide a fair and orderly market which reflects accurate supply and demand. In order for the industry to mature, effective market monitoring is crucial. We are cooperating closely with Irisium and will leverage their significant experience to provide a more robust and transparent trading venue for our customers.”
The Market Surveillance Market
Irisium, which is known to be used by other crypto exchanges such as Bitfinex, isn’t the only market surveillance company that is trying to expand from traditional markets into crypto. One of the biggest players in the institutional world, Nasdaq, is pushing hard for its Smarts surveillance platform to be adopted by digital asset exchanges.
Coincidentally, Nasdaq announced a plan to acquire Irisium’s parent company, Cinnober, for $190 million earlier this year. The deal is now under review by the Competition and Markets Authority, which is the U.K. antitrust regulator.
“Bitstamp’s proactive adoption of Irisium and close partnership with us demonstrates their desire to increase transparency, integrity and confidence in the cryptocurrency market,” said Alastair Goodwin, CEO of Irisium. “Integrating Irisium’s innovative technology into Bitstamp’s platform will support compliant and efficient operations. Enhanced customer protection and market integrity will help drive adoption and market liquidity.”
For some, perhaps the only thing better than a stablecoin is a universal stablecoin – one that’s usable wherever stablecoins are accepted. That’s what Huobi has launched in its new HUSD token, which supports four major stablecoins: Gemini Dollar, Paxos Standard, USDCoin, and True USD. The function is simple enough – by holding HUSD, users are able to instantly have an equal value of any of the above.
A small event was held in New York this week called the Stablecoin New York Conference, and Huobi General Counsel Joshua Goodbody spoke at moderate length about his firm’s efforts.
We believe the recent developments of stablecoins are positive for the industry and Huobi decided to support these developments proactively by launching HUSD. HUSD acts as a stablecoin aggregator. We provide the ability to deposit any of the four supported coins as HUSD and receive a 1:1 balance of HUSD which can be stored as well as traded against six pairs on Huobi Global. Users are also able to withdraw HUSD as any of the four applicable stablecoins
It seems Goodbody misspoke – according to the actual exchange at time of writing, the available pairs for HUSD were BTC, ETH, EOS, and USDT. It’s interesting that USDT is traded against HUSD, but not part of it. This is the second stablecoin effort that has decided to forego integration of USDT, which is the first pegged token.
Nevertheless, HUSD reduces trading fees for traders who are dealing with several types of markets. There is no exchange that lists every token and opportunity all of the time, so the movement between exchanges is necessary. Binance appears to be engaged in a similar effort to HUSD, but has yet to announce full details on it.
HUSD itself is not a token on any blockchain, but merely a product within the exchange, so it cannot be withdrawn or subsequently traded. When those products arise, it will begin to look like the derivatives market on the surface – although perhaps the contents will have greater constitution.
The addition of TrueUSD, which is the first token on the Trust Token platform that has yet to launch, is an interesting move. To date Huobi is one of the few to vocally support Trust Token in any way. The Trust Token platform aims for the tokenization of all real-world assets using “smart trust” contracts. It essentially enables anyone to offer stock in something they own. Its ICO has yet to launch, but True USD is very real in the interim, and runs on the same software.
Birks Group, one of the oldest luxury jewelry retailers in Canada, is now accepting bitcoin payments at some stores.
The firm announced Tuesday that it has partnered with U.S.-based bitcoin payments processor BitPay to enable “faster, easier and more secure” purchases for customers.
Currently, bitcoin payments are enabled at eight of the group’s stores, located at Vancouver West Hastings, Brinkhaus Calgary, Fairview Mall, Bloor, Yorkdale, Montreal and Calgary, out of 26 that it operates across Canada.
Some of the brands that are available for purchase through bitcoin are Rolex, Bulgari, Cartier and Breitling, the firm said. Its two recently launched stores in Vancouver, Graff and Patek Philippe, are also expected to accept the cryptocurrency in the near future.
“As an internationally growing brand, we believe that BitPay will benefit our customers as we look to align ourselves with these innovative capabilities that are on the forefront of technology,” Birks Group president and CEO Jean-Christophe Bédos said.
The firm added that this is BitPay’s “first major implementation” of its point-of-sale solution in the Canada.
“Accepting bitcoin helps Birks Group to cater to their high-end international clients and get new customers while providing an innovative and safe payment option,” said Sonny Singh, BitPay’s chief commercial officer.
The news marks Birks as the latest jewelry seller to accept bitcoin for goods. As early as 2014, U.S-based jewelry chain REEDS Jewelers started accepting bitcoins both at its online marketplace and over 60 stores across the country, through a partnership with Coinbase.
Last year in December, APMEX, one of the largest online gold dealers, also started accepting bitcoin, again through BitPay. And most recently, Pennsylvania-based Marks Jewelers partnered with e-commerce platform Shopping Cart Elite to accept crypto payments, including bitcoin, bitcoin cash, ethereum and litecoin.
CLS, the bank-owned currency trading utility, and IBM have gone live with their blockchain-based payment netting service after more than two years in development.
Investment banking giants Goldman Sachs and Morgan Stanley are the first companies to use the newly launched CLSNet, with six more participants from North America, Europe and Asia, including Bank of China (Hong Kong), committed to joining in the next few months, according to CLS and IBM.
Ram Komarraju, managing director for technology at CLS, told the system is up and running, saying:
“We have matched and confirmed the first transactions and successfully issued a netting report to the counterparties.”
Along with the food-tracking blockchain IBM Food Trust launched in October, and the trade finance platform , which went live in late June, CLSNet is the third blockchain consortium powered by IBM tech to go into production this year.
As such, it’s one of the few major enterprise distributed ledger technology (DLT) projects of any stripe to get this far.
“With CLSNet now in production with two of the world’s largest banks, for a major market function, it is a testament to the ongoing maturity of blockchain technology and the value that it can deliver in practice,” said Marie Wieck, general manager at IBM Blockchain, in a press release.
The launch of CLSNet, she said, represents “the first post-trade production deployment of blockchain technology in a global market utility.”
Filling in gaps
Though not a household name, CLS provides critical plumbing to the foreign exchange, or forex, markets. Founded in 2002, it mitigates settlement risk for participating banks with a “payment versus payment” service, in which both sides of a trade are completed at the same time.
But its new platform aims to solve current issues in the forex market, such as a lack of standardization and automation.
For example, a limited number of participants currently net trades with each other on a regular basis, and even when they do, often there is a need to manage the process manually, according to IBM and CLS. In addition, many participants do not net the payments for forex trades, instead settling on a gross basis, which exposes them to settlement risk and leads to higher intraday liquidity demands, the companies said.
“CLSNet will deliver the standardization and automation needed for non-CLS settled transactions,” said Adam Josephart, managing director of the fixed-income division at Morgan Stanley.
Barry Lo, general manager for the bank-wide operation department of Bank of China (Hong Kong), added that CLSNet in particular “will enhance operational efficiency in trade matching and payment netting for non-CLS settled currencies such as CNH [the offshore version of China’s renminbi], and strengthen our risk management.”
The now-live CLSNet works for over 120 fiat currencies and is designed to standardize and increase the level of payment netting in the foreign exchange market. It was developed in collaboration with buy-side and sell-side institutions. At the same time, the platform supports compliance with a code of conduct for the foreign exchange markets that CLS helped to develop, the company stated.
“A standardized and automated payment netting process will lead to improved intraday liquidity, reduced cost, improved operational efficiencies and ultimately support business growth,” said Alan Marquard, chief strategy and development officer at CLS.
CLS and IBM developed CLSNet on the Hyperledger Fabric blockchain. But CLS has been experimenting with blockchain technology since early 2015, before the Hyperledger consortium started.
Those attempts eventually grew into CLSNet, with Bank of America, Bank of China, Bank of Tokyo-Mitsubishi UFJ, Citibank, Goldman Sachs, JPMorgan Chase and Morgan Stanley on board when the project was unveiled in September 2017.
From the beginning, CLS worked with IBM on blockchain solutions. However, in May of this year, the forex trading utility announced a $5 million investment in another major enterprise DLT vendor, R3.
Yet R3’s platform will not be used for the current services CLS is working on, Komarraju told.
“Our investment in R3 has no impact on the future development of our products using Hyperledger Fabric, as we do not believe that DLT should be a ‘one-network universe,’” he said, adding:
“We believe that the industry will benefit from a choice in providers, which is why we have chosen to align ourselves with two key providers, R3 and IBM, in the DLT space.”
Meanwhile, CLS and IBM have expanded their collaboration. This summer the two companies announced a proof of concept for a separate project named LedgerConnect, a financial blockchain “app store” offering DLT-based services for know-your-customer processes, sanctions screening, collateral management, derivatives post-trade processing and reconciliation and market data.
One of Israel’s leading entrepreneurs in the cryptocurrency field, Moshe Hogeg, is facing accusations of embezzling funds raised from two Initial Coin Offerings consequently rendering the company for which the funds were raised for insolvent.
As a result, 17 individuals who claim to be shareholders of IDC Investdotcom Holdings, the company associated with Hogeg and which is more popularly known as Invest.com, have filed a petition seeking to liquidate the firm. A temporary liquidator has subsequently been appointed by a court in Tel Aviv, according to The Times of Israel.
With the 17 individuals all being ex-shareholders of AnyOption, a binary options firm which is now defunct, the petition has highlighted the close ties that exist between Israel’s thriving cryptocurrency sector and the binary options industry which was recently outlawed in the Middle Eastern country.
Registered in Cyprus, Operates from Israel
Though IDC Investdotcom Holdings is registered in Cyprus, the petitioners have alleged that it was largely run from Israel. After tens of millions of dollars were raised during two successful ICOs, the petitioners allege that Hogeg failed to share the proceeds but instead put the money to his own use.
This year Hogeg has been in the news for various multi-million dollar purchases and donations including a parcel of land he bought in Tel Aviv at US$19 million and the Israeli top soccer club Beitar Jerusalem which he acquired at a price of US$7.2 million. Hogeg also recently donated US$1.9 million to Tel Aviv University to put up a blockchain research facility named in his honor.
The blockchain entrepreneur’s ownership of Invest.com is through his venture capital firm Singulariteam. Other firms in the portfolio of Singulariteam include Sirin Labs which is known for the US$1,000 blockchain smartphone known as ‘Finney’.
Per the petition, AnyOption and Invest.com merged last year in June after it emerged that the former could no longer continue in the binary options business as Israel was planning to ban the sector. Terms of the merger agreement were however changed this year in February with shareholders of AnyOption now entitled to receive US$3.5 million from Invest.com and shares of Stox, a cryptocurrency firm that had been launched.
One of the ICOs which the petitioners claim became the victim of embezzlement was conducted last year in August when Stox held a crowd fundraising event where ETH worth US$34 million was raised though the value later rose to US$60 million. Stox also did another ICO in February this year for a project known as Zodiac where US$33 million was reportedly raised according to the petition.
The petitioners now claim that this amount never benefitted Invest.com but was instead embezzled by Hogeg leading to the current insolvency. Invest.com has, however, denied allegations that it is insolvent.
Riggs Eckelberry is the CEO of OriginClear, a company which provides water treatment solutions, and Chairman of WaterChain, a token project which works to crowdsource water funding in an effort to alleviate suffering as a result of the ongoing global water crisis, which isn’t scheduled to get any better as populations increase.
In a recent Forbes op-ed, Eckelberry speaks to the corporate animosity toward cryptocurrencies. He believes that this animosity is two-pronged in nature: on the one hand, companies want established cryptocurrencies. On the other, they want regulated cryptocurrencies. Finally, he feels that a lack of education is prevalent among corporate entities in regards to crypto.
Yes, cryptocurrencies are based on the blockchain, but crypto is very different — it’s specifically about money. When I first realized that, I pivoted from the path of enterprise blockchain and focused instead on setting up a better way for my industry to crowdfund innovative projects. But I still wonder, why all the fear, uncertainty and doubt around cryptocurrencies? I think it’s probably lack of education.
At present, there aren’t many – arguably there aren’t any – cryptocurrencies that fit both bills and are both regulated and well-established. The on-again, off-again relationship between mainsream media and mainstream finance is the result. It was best illustrated this week when CNBC SquawkBox anchors denigrated Bitcoin after a couple years of being very positive, putting financial adviser Anthony Pompliano in a position of defending Bitcoin overall.
The coins that are well-regulated are all relatively new. It will take time for them to become “established,” and ultimately their use cases are the determining factor in their staying power. Eckelberry makes this point by saying that the most successful alternative currency in the world is the frequent flyer mile. The utility of the thing is its value. Its lack of fungibility and direct cash-ability is where cryptos have it beat, and certainly, it’s one aspect of the economy that blockchain has yet to fully dominate – rewards programs in general.
If someone is loyal to a company and earns rewards as a result, why should those rewards not be transferable? It’s a question of whose property the rewards are – the customer’s or the company’s. Blockchain makes it not only feasible but almost inevitable that the future will make non-transferable rewards, miles – or whatever – obsolete.
Perhaps the most important part of the article is the discussion of the coming changes that will be brought by cryptocurrencies. Eckelberry, like many of us, believes they will create an entirely new economy. Note: we’re not referring here to the New Economy Movement or its token XEM, which is still truly in the developmental stages. We’re talking about a full-scale alternative economy which rarely touches the regular fiat one. As Eckelberry says:
The latest wave is the security-compliant token. These are being offered on new, security-compliant exchanges, such as Coinbase. These will, I believe, replace the weaker, unregulated ones, and create a stronger crypto ecosystem overall. That, I think, is what companies considering a cryptocurrency strategy need to understand: As these coins gain mainstream adoption, I think they will create an entirely new economy.
And companies will want to be positioned to benefit in this new economy, and rightfully those that are not will fall behind. Just as companies who ignored the Internet suffered for it, companies who ignore blockchain and cryptos will suffer. Even banks who ignore them will suffer, long-term, as more and more capital realizes that its needs can be met entirely bank-free.
An exchange is only as good as its liquidity. There are hundreds of exchanges to choose from, and many have chosen Binance, which was originally based in China and funded through an ICO. Binance is far and away the largest exchange in the world by volume and users, most days almost doubling the volume of its nearest competitor.
As we reported yesterday, Binance is in the process of creating a combined stablecoin market they’re calling USDⓈ, and now within that market Paxos Standard is to be a base token
At time of writing, PAX was still only trading against USDT in the market, but according to a press release received Tuesday morning, several other pairs will soon be added to the exchange.
When trading commences, PAX will have six trading pairs listed on Binance’s USDⓈ Markets against BNB, BTC, ETH, XRP, EOS and XLM.
USDT is still by far the most used stablecoin on Binance, but it seems they are testing the waters with other tokens. The situation prior to the addition of the above-named pairs was that the user would have to convert PAX to USDT in order to trade on most of the pairs in the USDⓈ market listings. While this is still somewhat the case following the move, it demonstrates that Binance is looking to experiment. And, for what it’s worth, at time of writing PAX was trading at a premium against USDT – 2 cents. Over the course of $1 million that adds up to a $20,000 arbitrage opportunity. For its part, Paxos’ Dorothy Chang, head of Marketing, says that clients who want to see more pairs should use the Pax token on the exchange and request more pairs be added:
More will be added according to customer demand, so if people want more- they should keep asking Binance to add more pairs to trade with PAX.
Trading of the new PAX pairs should open on the morning of November 29th. If the volume on these new pairs is significant enough, Binance will add more pairs, as it has done with USDT. There is still no word on when or if Binance will integrate USDC or GUSD. To be fair, these tokens are both issued by competing exchanges – in the case of USDC, the creator, Circle, owns Poloniex, which is senior in age to Binance and would love to unseat it as the king of exchanges. But Paxos is issued by itBit, which also operates an exchange.
The creation of the USDⓈ Market on Binance opens speculation that Binance may be working on its own stablecoin offering. They certainly have the scratch to back it, but historically they have shied away from too much interaction with the banking system, preferring to be a clearinghouse and premier trading platform for multiple cryptocurrencies.
Bitcoin on Tuesday showed some signs of bottoming out as it consolidated sideways a little above $3,500, its psychological support.
The BTC/USD is now trading at 3734-fiat, up 1.58% from the previous day close. Meanwhile, the pair is trading inside a range that is no more than $230 wide. Though volatile, the choppy price action is still stable compared to Bitcoin’s performance in the past two weeks.
The CME Bitcoin Futures are also going to expire this week on Friday. Tom Lee from Fundstrat had earlier noted that volatility in Bitcoin spot market increases every time a contract heads towards its expiry date. Eventually, the price does down, finds a support and picks up again soon after the expiry date. It is expected that BTC/USD will once again test new support levels – perhaps towards 3000-3500-fiat range – even without any influence from the futures contracts, before it rebounds.
The US Dollar, meanwhile, established its two-week high after President Donald Trump threatened China of higher trade tariffs. It could make investors hold on their greenbacks and avoid liquidating for quoted assets, including stocks, commodities and even crypto.
As of now, the pressure is visibly on 3500-fiat to hold what is the minimum bullish presence in the bitcoin market. The BTC/USD pair is already trending inside a downward parallel channel, now the midst of two equally strong levels. The prevailing bearish momentum could allow the pair to test the channel support first and then could see a rebound towards the channel resistance. In another scenario, BTC/USD could break below the channel support and continue its fall to find next support at 3000-fiat.
The bearish bias is also visible in the RSI momentum indicator which has reversed from 45 already, proving a selling sentiment. The MACD, for now, is placed slightly inside a bullish zone albeit hinting a reversal anytime soon.
BTC/USD Intraday Analysis
The BTC/USD in near-term is trending inside a symmetric triangle, giving plenty of exit and entry hints for day traders and take out attractive intraday profits. We are now reversing from the triangle resistance, which has allowed us to enter a short position towards the triangle support. A further break below the said support would have us open another short, this time towards 3560-fiat. In both the positions, we will be maintaining our stop losses just 4-5 dollar above the entry point. It will help us avoid getting chopped during an unexpected price action.
Looking the other way, a break above the triangle resistance would have us target the 200-period exponential moving average as an intermediate upside target. A further break and we would have another long opportunity towards 3818-fiat. In both the positions, a stop loss just 4-5 dollar below the entry point will define our risk management perspective.
The hash war between the Bitcoin ABC and Bitcoin SV camps have officially come to an end. But the one that conceded defeat surprisingly gained more than the one that won.
Bitcoin SV, the brainchild of Dr. Craig Wright backed by CoinGeek mining pool boss Calvin Ayre, surged circa 48 percent in a week. The new BSV ticker added as much as $2.21 billion to its market cap before correcting lower to $1.81 billion on Monday. In contrast, the rest of the top cryptocurrencies were red. Bitcoin ABC, which has gained rights over the Bitcoin Cash’s original ticker BCH, continues to trend lower. Its weekly price action has posted a 23.5% loss. Bitcoin, similarly, has erased $19.73 billion off its market cap, down 23.5% like BCH per weekly performance.
At press time, the BSV/USD pair is trading at 109-fiat on BitFinex, up 28.5% from its Monday’s close at 84.72-fiat.
Interim Bullish Dynamics for BSV
The speculation has got into the Bitcoin SV space already ahead of its minimal launch. Coingeek on Monday released an optimistic roadmap, stating that their chain is the most superior blockchain because it has mined a 64 MB block. The plans include a proposal to increase BSV block size from 64 MB to 512 MB in over the next six months, and later to 2 GB. If BSV can hit the value of $640 soon, miners would be able to generate an income of $8,000 per block.
Bitcoin SV also eyes the launch of one Teranode project that would scale the network up to 1 TB. In an ideal scenario, the solution should be able to process transactions at a speed of 6.5 million operations per second, while reserving mining rewards to $600,000 per unit.
At first glance, the claims look highly exaggerated like any other blockchain project. The BSV team on many occasions have put their actions against their words. While an optimistic post has indeed helped the BSV market add a few hundred million in near-term, its sustainability in the top ten cryptocurrencies would solely depend on adoption by both miners and users – if they can deliver.
Being a fresh market, BSV lacks historical evidence of price actions. The BSV/USD, as of now, is heading north while maintaining its support at the near-term rising trendline. The pair has recently tested 119.40-fiat as interim resistance and is currently undergoing a minor downside correction, forming a bull pennant. There is a likelihood that the pair would continue the uptrend and a breakout target near 140-fiat looks achievable. Nevertheless, to maintain risks, one should put their stop losses only 4-5 dollars below the entry position. That would minimize the overall losses should the bias reverse.
The world’s second largest stock exchange Nasdaq is planning to introduce a Bitcoin futures market within the first quarter of 2019.
Sources told Bloomberg that Nasdaq has been cooperating with the Commodities and Futures Trading Commission (CFTC) to receive regulatory approval to operate as a compliant cryptocurrency futures market operator.
The report read:
“Nasdaq has been working to satisfy the concerns of the U.S.’s main swaps regulator, the Commodity Futures Trading Commission, before launching the contracts, the people said. The New York exchange operator, which was first reported to be eyeing Bitcoin futures last year, wants to allow trading in the first quarter of 2019, one of the people said.”
What Impact Will Nasdaq Plus Bakkt Have on Bitcoin?
Bakkt, a cryptocurrency exchange built by ICE, the parent company of the New York Stock Exchange, is expected to launch its Bitcoin futures market on January 24.
On November 20, the company delayed the listing of Bitcoin futures citing an unforeseen increase in demand for its futures product. Bakkt stated that it needs additional time to prepare the infrastructure that is required to serve a large group of investors based in the US.
“ICE Futures U.S., Inc. will list the new Bakkt Bitcoin (USD) Daily Futures Contract for trading on trade date Thursday, January 24, 2019, subject to regulatory approval. The new listing timeframe will provide additional time for customer and clearing member onboarding prior to the start of trading and warehousing of the new contract,” Bakkt announced.
Currently, the demand from institutional investors for crypto can only be evaluated through the numbers that Bakkt, Fidelity Digital Assets, Goldman Sachs, BitGo Custody, Coinbase Custody, and other major over-the-counter (OTC) markets can provide.
The entrance of Nasdaq in a long-lasting bear market and downtrend suggests that the company sees sufficient institutional demand from the U.S. market. A conglomerate in the size of Nasdaq does not allocate a large portion of its resources to develop an infrastructure for a new asset class unless it is certain that the demand for it will grow over time.
Depending on the delivery of Nasdaq’s plans, by the second quarter of 2019, the cryptocurrency market could have Nasdaq and NYSE, two of the largest stock exchanges, in the global market operating Bitcoin futures markets.
Bakkt physically delivers Bitcoin to its investors and as such, it could have an actual impact on the supply of Bitcoin and ultimately its price. The intricacies of Nasdaq’s plans remain unclear but the two markets could lead to an increase in additional liquidity for the asset.
Since August, when the U.S. Securities and Exchange Commission (SEC) denied exchange-traded funds (ETFs) based on the futures market, the commission consistently stated that the futures market is simply not of significant size to handle large-scale investment vehicles.
In the next 6 to 12 months, the stance of the SEC towards the Bitcoin futures market could change if Bakkt and Nasdaq demonstrate real demand from local investors.
A new bill which will impact electronic wallets and digital payment tokens such as bitcoin has been tabled in Singapore’s parliament.
The Payment Services Bill will place the providers of payment services that are not under the regulatory oversight of Money-Changing and Remittance Businesses Act and the Payment Systems Oversight Act under the umbrella of Singapore’s central bank, the Monetary Authority of Singapore (MAS).
This has come about following the growing usage of cryptocurrencies and the realization that the existing legislation does not cover them adequately.
Scope of Payment Services
Besides regulating cryptocurrencies, other activities that are set to be covered by the Payment Services Bill include both domestic and international money transfers and foreign exchange transactions.
“The payment services regulated under the Bill are: a) account issuance service; b) domestic money transfer service; c) cross border money transfer service; d) merchant acquisition services; e) e-money issuance service; f) digital payment token service; g) money-changing service,” said a statement from the MAS.
To offer the listed payment services, providers will be required to acquire licenses which will correspond to the risks that the payment services offered pose. Payment services will be classified as major payment institutions, standard payment institutions or money-changing institutions. The difference between a major payment institution and a standard payment institution is transaction volumes with the latter limited to transaction amounts not exceeding $3 million per month and electronic money float not exceeding $5 million.
Business Presence in Singapore
Among other conditions, applicants of the above licenses will be required to be companies (either incorporated overseas or in Singapore) that have a permanent place of business in the Southeast Asian country or at least a registered office.
With regards to the grace period offered to ensure compliance, the MAS will be stricter with payment services dealing in cryptocurrencies. While other payment service providers will have up to 12 months to comply once the bill is signed into law, providers of digital payment tokens will only have six months to ensure compliance.
The second consultation on the Payment Services Bill was launched last year in November by the MAS.
Then, the MAS hoped that the bill would cover more payment service providers while offering regulatory clarity to the sector:
“The new framework will expand the scope of regulation to include domestic money transfers, merchant acquisition and the purchase and sale of virtual currencies. Only payment activities that face customers or merchants, process funds or acquire transactions, and pose relevant regulatory concerns will need to be licensed.”
As recently reported by Bloomberg, the head of policy at Coinbase, Michael Lempres is leaving the company for a position at a venture capital firm.
He was promoted back in September when Brian Brooks took over his post as a chief legal and risk officer, a role that Lempres served as for over a year.
Coinbase to look for a new head of policy
According to a recent Coinbase statement for Bloomberg News, Mike Lempres, the company’s recently promoted chief policy is leaving the digital trading platform team to embark on a new job at Andreessen Horowitz — one of the exchange’s early investors. There is no information on who is going to take over Lempres’ duties as head of policy as regulatory demand is skyrocketing.
The Silicon Valley-based VC firm was founded in 2009 by Marc Andreessen and Ben Horowitz and has made numerous investments in major tech and blockchain companies. Some of the more noteworthy names found among the organization’s portfolio include Airbnb, Twitter, Facebook, Medium, Stack Exchange, Ripple, Skype, Imgur, Zynga, and Groupon, among others.
The digital assets trading platform noted that “As chief legal and risk officer during a time of tremendous growth for Coinbase, Mike was instrumental in building the company’s legal and compliance functions and driving our vision of trust through compliance. We wish him the best in his new position with Andreessen Horowitz.”
Hacks and scams are at their peaks, so is regulatory uncertainty
This year we saw a tremendous rise in hacks, scams and their scale. Early this year, we saw the fall of Bitconnect, a $40 million hack of the South Korean exchange Conrail, and the Japanese crypto exchange Coincheck’s record-breaking hack of assets worth more than $500 million.
According to the blockchain security company CipherTrace, more than $731 million worth of cryptocurrencies have been stolen from exchanges during security breaches in the first half of 2018 and the recent $60 million hack of the Japanese exchange Zaif just proves that the problem isn’t getting any better. As a comparison, last year crypto trading platforms recorded a loss of $266 million due to security gaps.
Financial regulators are well aware of most of the dangers that cloud the future of the digital assets sector. Blockchain and crypto assets regulatory uncertainty are at their peaks and now is a crucial time for successful communication between regulators and the digital finances industry to ensure the healthy development of cryptocurrencies and their underlying technology.
Throughout the past 24 hours, the price of Bitcoin (BTC) dropped from $4,065 to $3,600, reversing a short-term corrective rally.
The dominant cryptocurrency has been on a steep downtrend for several weeks but on November 26, for a brief of time, Bitcoin seemed to be initiating a corrective rally after reaching a new yearly low at around $3,400.
Temporarily, Bitcoin spiked to $4,000, engaging in a 17 percent increase in price within a 24-hour period. However, the price of the asset began to fell back to the lower region of $3,000.
What is Bitcoin up to?
The cryptocurrency market is struggling to sustain any sort of momentum in an attempt to create a trend reversal. Sell pressure on major digital assets is increasing and buy pressure is declining, which has led both Bitcoin and Ethereum to drop by more than 40 percent in the past two weeks.
“Bitcoin failing to complete the bull flag and to hold the neckline of the IH&S. Lack of buy pressure and $3,800 range looking weak. Expecting more downside: $3,400 as first target,” cryptocurrency trader Crypto Rand said on November 26.
Since Monday, the price of BTC has moved closer to the $3,400 support level and based on the movement of BTC in the past 12 hours, it is likely that BTC will drop below the level in the days to come, especially if it fails to maintain stability above the $4,000 mark.
Ripple (XRP), EOS, Stellar (XLM) and other major cryptocurrencies are in a worse position than BTC and ETH because of their low daily volumes. Currently, the volume of ETH remains larger than that of XRP, XLM, and BCH combined.
When the price of an asset falls substantially without a huge spike in volume, it represents a free fall without much sell pressure. Which means as big sell volumes begin to the hit the market, the price of the asset could be vulnerable to additional sell-offs in the near future.
The volume of BTC is decent at $6.5 billion and the volume of ETH is also relatively high. But, the volume of other major cryptocurrencies are lower than where they were from August to November, a period in which BTC demonstrated its lowest level of volatility in recent history.
Alex Krüger, a cryptocurrency trader and economist, said:
“Before the crash BTC had been growing exponentially. Will BTC ever resume exponential growth? Maybe not. Maybe only temporarily. Many assets don’t grow exponentially. What if bitcoin has matured and starts behaving as a currency or most commodities?”
One Positive: Swiss ETP
The newly introduced crypto exchange-traded product (ETP) in Switzerland offered by Amun and the Swiss Stock Exchange, has began to appeal to a large group of traders in the region.
It has become the biggest ETP in Switzerland with the highest trading volume, portraying an immense interest from local investors towards crypto.
Modern Terminals, the second largest container terminal operator in Hong Kong, has joined the TradeLens project, a blockchain-enabled technological solution developed by Maersk and IBM.
The TradeLens ecosystem – writes Modern Terminals in its press release – seeks to digitize and streamline processes in the global supply chain to deliver higher efficiency and lower cost. It includes more than 20 port operators and terminals around the globe, factoring circa 234 docks on five continents, including Port of Valencia, PSA Singapore, Patrick Terminals, Port of Halifax, Port of Bilbao, PortBase, PortConnect and the Port of Philadelphia.
Wider Economic Saving
The inefficiencies in the traditional supply chain have incurred losses worth billions of dollars in the past decade, Liaison found.
Before TradeLens, a majority of the ports as mentioned above were working principally with paper records, open to damages, manipulation, and outright lostness. Container ships still carry documents for immediate verification that obstructed the flow of their supply chain, eventually causing shipment delays and errors via manual filing.
“It does not seem like much, but it is,” Peter Levesque, Group Managing Director of Modern Terminals, told SCMP. “Without blockchain, you’re going on faith that what’s on the document is what’s in the container.”
The TradeLens solution claims that their trial run reduced the shipment time by 40 percent, leading to an overall economic saving for the supply chain participants. The use of digital ledger has enabled the participants to broadcast the status of a container in a supply chain in real-time, such that records become immutable and available at the same time.
“The potential from offering a neutral, open digital platform for safe and easy ways of exchanging information is huge, and all players across the supply chain stand to benefit,” Maersk’s chief commercial officer Vincent Clerc had stated in January.
Modern Terminals also joins the TradeLens group of ports as a Network Member to evaluate the same: the platform’s performance in the real-time. Based on the outcomes, each port would offer its suggestions about whether TradeLens could be improved any further.
“This initiative will generate tremendous savings for our industry over time while enhancing global supply chain security,” said Levesque. “That is the Holy Grail – one place to see the whole [supply chain] in one spot.”
Maersk and IBM are not the only companies that are tapping blockchain to improve supply chain management. Crimson Logic, a Singapore-based company, is also developing a blockchain solution called Global eTrade Services to do pretty much the same thing TradeLens is doing.
The Philippine government-owned Cagayan Economic Zone Authority has unveiled a plan to attract Japanese, Korean and Australian companies to its “Crypto Valley of Asia.” The authority is also cracking down on crypto companies operating within its economic zone without a license.
Ceza’s Crypto Valley of Asia
The Cagayan Economic Zone Authority (Ceza) announced last week its plan to attract companies from Japan, Korea, and Australia to its Crypto Valley of Asia.
Ceza has partnered with one of its principal Offshore Virtual Currency Exchange (Ovce) licensees, Rare Earth Asia Technologies Corp., to achieve this expansion. The agreement gives the tech company the exclusive right to be Ceza’s sole marketing and technical partner to promote Ceza in the aforementioned three countries, the authority explained.
Crypto Valley of Asia will be marketed as “the most ideal investment destination in Asia for blockchain, crypto and financial technology (fintech) companies,” Ceza wrote. The authority further noted that it offers companies “clear guidelines and transparency, attractive tax incentives, access to a rich pool of talent in the areas of blockchain and fintech, and other benefits,” elaborating:
The development plan for the Crypto Valley of Asia includes the launch of a blockchain and fintech university to provide skilled and experienced workers for companies in the economic zone.
On Nov. 23, the Philippine News Agency reported that Ceza’s revenue from January to September reached 521 million pesos (~$10 million), doubling from 224.55 million pesos earned for the full year of 2017. Ceza CEO and Administrator Raul Lambino explained that Ceza’s venture into cryptocurrency and blockchain technology has boosted its revenue this year, adding that “Growth in the economic zone will be investment-driven.” Furthermore, about 50,000 jobs will be created, the news outlet noted.
Rare Earth will also be issuing a “token that enables its exchange partners to receive a share of transaction fees,” Ceza added. “This initiative shall be subject to Ceza fintech and Ovce rules and regulations as well as its upcoming framework and regulations on ICO [initial coin offering] and STO [security token offering].” In addition, Ceza wrote:
As part of the agreement with Ceza, Rare Earth will comply with all the Philippine rules and regulations of the concerned regulatory agencies such as the Banko Sentral ng Pilipinas (BSP) and Securities and Exchange Commission (SEC) when appropriate.
Crackdown on Unlicensed Crypto Firms
The Manila Times reported on Nov. 22 that Ceza is cracking down on cryptocurrency firms operating in the zone without authorization. Ceza is collaborating with the National Bureau of Investigation and the Criminal Investigation and Detection Group of the Philippine National Police to go after unlicensed crypto businesses.
The authority has also issued an order to closely monitor activities in its crypto valley program, the news outlet wrote. According to Lambino:
There have been reports of some unlicensed cryptocurrency firms that have burrowed into Ceza’s emerging fintech-crypto hub where they set up illegal operations.
In October, Ceza announced that it had awarded licenses to 19 companies, allowing them to operate crypto businesses within the zone.
There’s nothing particularly special about a bitcoin transaction. Every day, 300,000 of them occur on the BTC and BCH networks without fanfare. But occasionally, a perfunctory transaction will attain historical significance. These bitcoin transfers can be viewed in any blockchain explorer, where they have been immortalized by the public ledger and mythologized by the public.
Bitcoin History Begins on the Blockchain
All bitcoin transactions are equal in the eyes of miners. Provided there’s a sufficient fee attached, it makes no difference to them who sender or recipient may be or how many BTC are transferred. It’s only once hindsight and context are applied that significance can be attached to a transaction like an opcode. With over 360 million BTC transactions to date, the following article details just 0.0000022 percent. But within this slender selection lurks a trove of Bitcoin history. There’s magic and mystery encoded in the blockchain if you know where to look.
First Bitcoin Transaction
We might as well start at the start, with the first BTC transaction sent between two people and the only one known to have been sent by Satoshi. It occurred on Jan. 12, 2009 when Satoshi Nakamoto sent 50 BTC to Hal Finney in block 170. The cost of the transaction, like so many in the early days, was 0 BTC.
First Bitcoin to Fiat Sale
The first known sale of BTC in exchange for fiat occurred on Oct. 12 2009 when Finnish developer Martti Malmi sold 5,050 BTC for $5.02, with the fiat amount transferred via Paypal. The number of BTC sent corresponds with the fact that the only way bitcoin could be obtained back then was by mining it, when the coinbase reward was set at 50 BTC.
That Pizza Purchase
Laszlo Hanyecz’s 10,000 BTC pizza purchase is so famous that even nocoiners know about it. The details don’t bear retelling again: we’re only interested in the blockchain record for the legendary transaction. It resides here, in block 57043, which records the dispatch of 10,000.99 BTC on May 22, 2010. The 0.99 BTC on top, incidentally, was to cover the miner’s fee. That works out at a cool 4,191 sats per byte.
Mt. Gox Mega Transaction
When most whales wish to show that they own a particular bitcoin address, they’ll send a microtransaction from it. A few satoshis is all it takes to demonstrate proof of funds. Mt. Gox CEO Mark Karpeles had a different idea though when pressed to prove the funds under his custody, sending a massive tranche of BTC from one wallet he controlled to another in a show of strength.
Leaked IRC logs allegedly show Karpeles offering to send 442K BTC, and blockchain records attest to this transaction taking place. On June 23, 2011, 442,000 bitcoins were indeed sent to two addresses in a single transaction, including 424K to one. It remained the largest amount of BTC ever sent at one time until November of that year, when 550,000 BTC was moved in one go.
Monster Transaction Fee
“Hi, I entered a transaction fee that was way too high…is there anyway that I can stop the transaction from confirming?” asked a distressed Redditor back in 2013. Help was forthcoming, but not before the 98 BTC transaction went through on May 16 with a whopping 30 BTC fee attached. That worked out at 6.8 million sats per byte.
In the end, the mining pool that confirmed the block refunded 7.5 BTC, granting the generous fee payer some consolation. This was by no means the highest fee to be attached to a bitcoin transaction, by the way. In August of 2013, someone sent a 200 BTC fee, which was benevolently returned by the mining pool that collected it, and then in 2016 a transaction for 0.0001 BTC was sent with 291 BTC attached.
Bitcoin Fake Murder
On March 31, 2013, Silk Road operator Dread Pirate Roberts (DPR) sent 1,607 BTC to user ‘redandwhite’ to perform a hit on an individual who was extorting the deep web marketplace. The hit didn’t go through (it appears likely that redandwhite was both the assassin and blackmailer) but the transaction, for an agreed price of $150,000, did. With 322,639 confirmations, there will be no rolling back this BTC transaction.
US Marshals Silk Road Auction
On July 1, 2014, close to 30,000 BTC was sent to the winning bidder in an auction held by US Marshals offloading assets seized from Silk Road. The auction was split into 10 blocks, and in the end one individual won every single tranche. That bidder proved to be Tim Draper, and that acquisition, for approximately $18 million, proved to be a very shrewd investment.
There’s numerous bitcoin transactions that can be connected to hacks. One of the most notorious is the near-20,000 BTC stolen from Bitstamp in 2015. This includes a 3,100 BTC transaction that kickstarted the attack.
With bitcoin’s value worth multitudes more than it was in the period spanning 2009-2015, headline-grabbing transactions are less common, but still newsworthy when they occur. In the past fortnight, Binance sending over 100,000 BTC between wallets has caught people’s attention, as has a BCH address moving a total of 1 million bitcoin cash on the eve of the Nov. 15 hard fork. For so long as transactions occur onchain and without the veil of privacy, bitcoiners will continue to derive fascination from unusual blockchain movements.
Interesting moves are afoot in stablecoin land.
Major crypto trading platform Binance, which is the top exchange by volume – doing nearly twice the 24-hour volume of its nearest competitor at time of writing – has announced that it is creating a new unified stablecoin market. While they haven’t released full details on this new market, we do know that USDT will be part of it, as it is the first token on the exchange to see a change related to it.
USDT will now be listed on Binance as USDⓈ – Binance deciding to use the Unicode symbol for an encircled S to denote a stablecoin. They write:
“Binance has renamed the USDT Market (USDT) to now be a combined Stablecoin Market (USDⓈ). This is to support more trading pairs with different stablecoins offered as a base pair. […] Please note that USDⓈ is not a new stablecoin: it is the symbol of Binance’s new stablecoin market.”
More Stablecoins Acting As Base Pairs
The mechanics of a stablecoin are simple enough: a steward holds funds in a bank account corresponding to tokens they sell to users. The trust issue is huge here, something that the trustless economy of Bitcoin is certainly weary of. But the advantages can’t be denied: no long deposit processes from exchanges to bank accounts. The ability to secure funds in a dollar-denominated currency when not trading them, essentially stabilizing them.
Likely More Stablecoins On The Way
While there are several such stablecoins on the market as it stands, they as a group are probably not capable of capturing the entire market that will bloom. Thus, Binance is looking forward – they likely expect to see more stablecoins – particularly stablecoins from other fiat systems, primarily the Euro and a few Asian currencies. They understand that there will be more Stablecoins, and to give users the best experience, they’re acting now in order to have a working market ahead of time, so they can then just add tokens later.
The major stablecoins of the present are: Tether USD, Paxos Standard, and USD Coin. Another that will likely be in the pair belongs to the Ethereum world – the Maker DAO – and it’s quite different in functionality than are the simple paired tokens. Maker has a number of algorithmic functions within it, so much so that commentator Emin Gun Sirer has argued that it is a stablecoin while the others are merely “pegged”:
The French version of the SEC, the Autorité des marchés financiers, along with the Banque de France issued a statement Monday regarding the intentions of KeplerK, a company which was previously reported to have gotten approval and is planning to partner with tobacco shop operators to sell Bitcoin in their stores across the country. It seems French bureaucracy can be even more confusing than its American counterpart, as initial reports stated that regulators had tacitly agreed to the plan.
However, the French regulators’ Monday statement was unequivocal:
“Its distribution by a public limited company, PAYSAFEBIT SASU with a capital of 50000 euros, using the trade name KEPLERK, which does not have any authorization or approval by a French or foreign authority, is not likely to provide any guarantee to the customer base.”
Their apparent concern is that Paysafebit/KeplerK will not have the liquidity to cover exchanges. Not that this makes any sense – there are plenty of ways it can be done that will ensure that customers are delivered their BTC. Or is the concern that the company doesn’t have a lot of money in the event that customers wish to sue? The statement doesn’t say. It simply talks about the risks of dealing in cryptocurrencies, while not announcing any enforcement actions against the firm, or attempts to nix the plans.
KeplerK Still Seems to be Moving Ahead
At time of writing, KeplerK’s website did not reflect any loss of traction in their plan. The firm offers a Coinbase-like app in addition to its in-person exchanges. The process is simple enough: the user cashes into the exchange with actual Euros or presumably even a debit or credit card at the merchant and is then issued a ticket they can redeem on the KeplerK app or website. Their app is in both major app stores.
Nevertheless, the AMF believes that people may have confused KeplerK with another company called Kepler Cheuvreux, which is an independent financial services firm that is fully regulated. It’s unclear at time of writing what will become of KeplerK or its plans to sell retail Bitcoin.
The AMF had previously blacklisted a number of cryptocurrency investment websites. Such moves run counter to a parliamentary push in the country which aims to see France as a hub of both blockchain development and ICOs. The future seems bright one day, dark the next.
According to former Reddit crypto lead-turned-entrepreneur Ryan X. Charles, there are only a couple options for the future of Bitcoin, specifically Bitcoin Cash-spinoff Bitcoin SV — it goes to astronomical highs, or it goes to zero. To illustrate his point, published the following tweet on Friday. It seems he has decided that of the two networks that came out of the BCH hard fork, he’s on the side of Bitcoin SV (BSV).
Two long-term possibilities:
1. All cryptos go to zero.
2. BSV goes to one million USD per coin and all other cryptos go to zero.
Only BSV has economics that work long-term. But even BSV will fail without massive growth.
Adoption trumps everything. https://t.co/6Yl6J1YaKJ
— Ryan X. Charles (@ryanxcharles) November 23, 2018
While there are of course many possibilities for the future of cryptocurrencies as a whole, and certainly any number of futures for all versions of Bitcoin, the real message of the Yours.org founder’s tweet lies in the last bit: “Adoption trumps everything.”
Yours.org One of First Services Launched on Bitcoin Cash
Charles had long advocated for larger blocks in the Bitcoin network, believing that the ability to simultaneously process millions of transactions is vital to the long-term success and viability of Bitcoin. It wasn’t until Bitcoin Cash went live that he felt he could launch Yours.org, which requires on-chain payments for people to read content — with payments as low as 1 penny being processed on a regular basis. Yours.org is something like a hyper-monetized WordPress.com or Tumblr, without building its own blockchain as Steemit has done.
In an interview with CoinGeek, he said:
“Something that I think the nChain and CoinGeek side understand that seems to have been glossed over on the ABC side is the desperate urgent need to scale right now.”
After leaving Reddit, Charles listed for a bit, floating the idea of creating a decentralized version of the social site, but eventually landed on the creation of Yours.org. More recently, he has been active on a Bitmain-backed payments project called Money Button, which makes it easy for websites to accept payments through cryptocurrencies.
It is important not to sensationalize such statements as “go to one million USD.” While many believe that various crypto tokens can hold values that high in the distant future, Charles’ primary point of view is that scaling and adoption are crucial to the success of Bitcoin — whatever version. As such, he’s chosen Bitcoin SV as his dog in the race because he believes it is best equipped for scaling.
Only time will tell what scaling strategy works best, but in the Bitcoin world, there are now three competing visions — the off-chain scaling of Bitcoin Core, the medium-careful scaling of Bitcoin ABC, and the aggressive on-chain scaling of Bitcoin SV.
A state-owned financial institution in the United Arab Emirates, Al Hilal Bank, has made history by becoming the world’s first Islamic bank to execute a Sukuk (Sharia-compliant bond) transaction on a blockchain.
In a secondary market deal, Al Hilal Bank used blockchain technology to resell and settle a portion of a US$0.5 billion Sukuk issued two months ago and scheduled to mature in September 2023. According to the CEO of Al Hilal Bank, Alex Coelho, integrating DLT into Sukuk deals will make the transactions safer while ensuring compliance with Islamic law.
“The advantages of using smart contracts range from safer transactions with robust Shariah compliance, to the unlocking of new opportunities,” said Coelho in a statement.
Additionally, smart Sukuks will enhance efficiency during transactions and cut the overhead costs that are incurred during issuance and settlement.
World Bank’s US$73 million bond
While Al Hilal is reportedly the first Islamic bank to execute a Sharia-compliant bond transaction on the blockchain, it is not the first time that a regular bond has been settled on a blockchain. In late August, the World Bank settled a two-year bond worth US$73 million on the Ethereum network.
The Bretton Woods institution picked Australia’s largest bank, Commonwealth Bank of Australia, as the sole arranger of the bond which was dubbed BONDI – Blockchain Operated New Debt Instrument. The World Bank issued the bond, which was priced at a 2.251% yield, with a view of raising funds from public investors and investing in development activities in emerging nations.
Austria’s Bond Auction
Less than two months ago, Austria raised more than one billion euros in a bond auction whose notarization took place on the blockchain. According to Austrian special-purpose bank, Oesterreichische Kontrollbank AG, the use of blockchain technology enhanced the security of the transaction and consequently engendered confidence in the bond auction process.
“Blockchain technology offers great potential for increasing efficiency and ensuring the quality of bank processes. Therefore, we have been dealing with this topic intensively for some time now and have already tested several prototypes. Starting the real operation on behalf of OeBFA is a pleasing and logical next step,” an executive at Oesterreichische Kontrollbank AG, Angelika Sommer-Hemetsberger, said,
Earlier this year, Russian banking giant Sberbank and telecommunications firm MTS transacted the country’s first commercial bond on the blockchain. The bond worth approximately US$12 million was placed on a proprietary blockchain platform that based on Hyperledger Fabric, a DLT application associated with the Linux Foundation-led Hyperledger consortium.
The bitcoin price on Monday continued its crash course despite showing gains during the early Asian trading session. The digital currency attempted a go at its yearly low at ~$3,455 after reversing from its intraday peak at $4,115. That overall marked a circa 14 percent crash, setting standards for a further bearish action.
The BTC/USD index at press time is trading at 3581-fiat, eyeing potential support from 3508-fiat. The market has once again created a psychological bottom area inside a 3000-to-3500-fiat range. There is so far no evidence that could prove a potential [strong] reversal at any of these levels. The last time BTC/USD tested these levels as support was in September 2017. The technical dynamics were different then — the pair was trending above its 50-period, 100-period, and 200-period simple moving averages while forming higher highs.
In November 2018, however, the technicalities have turned upside down. The bitcoin price is now trending below its key moving averages, forming lower lows. The question remains whether the levels that were strong supports during an uptrend should remain equally robust when the asset is on its way down.
Fundamentals are the Only Savior
The bitcoin technical indicators in the present could serve the purpose to instruct traders about potential entry and exit positions. They won’t be able to provide any long-term prospects unless the market truly establishes a bottom and rebounds with strong volume. Analysts predicting bottoms could at most be patting their own backs for making a right “guess,” not a prediction based on market demand.
The fundamental aspects of bitcoin, meanwhile, continue to be strong owing to the impending launch of Bakkt, an ICE-backed crypto exchange, and the potential approval of a bitcoin ETF by the last quarter of 2019. These are among the only remaining factors that should keep the investors’ interest alive in a bleeding market.
For day traders, the chart above could be relevant. The BTC/USD rate is visibly inside a descending parallel channel (and a long-term falling wedge formation discussed in our previous analysis). We’ll stick to a parallel channel in this report to understand the near-term dynamics.
The bitcoin price could restest the channel support for a potential pullback towards 3500-fiat, an interim long target, followed by a run towards the channel resistance as the primary upside target. An intra-channel long position should be coupled with a stop loss target 4-pips below the entry position to safeguard the trade.
Similarly, there is a high probability that BTC/USD will reverse from the channel resistance, then attempt a breakout action towards 4374-fiat, the interim upside target. A short position towards 3508-fiat upon an uptrend reversal should promise some decent profits. Nevertheless, maintaining a stop loss order 4-pips above the entry position will reduce the overall risk from the trade.
Trade safely and try not to catch a falling knife.
Embattled crypto exchange Coincheck has announced the resumption of trading pairs for XRP and FCT tokens effective Monday, November 26.
In a statement on its website signed by company President Toshihiko Katsuya, it was revealed that starting from Monday, deposits and sales of the two cryptocurrencies will be partially restored alongside a few ancillary services.
It will be recalled that in January, the Japanese exchange suffered what came to be classified as the biggest crypto theft in history, losing roughly $530 million worth of NEM tokens in a hack that led to increased regulatory scrutiny of crypto exchanges in Japan.
Coincheck Restores Services
Originally written in Japanese, a translated excerpt from Coincheck’s statement reads:
“In connection with unauthorized remittance of the virtual currency NEM due to unauthorized access occurred on January 26, 2018, the Company suspended the services partially in order to investigate the cause of customer asset protection and unauthorized remittance, and formulated a business improvement plan. In implementing this plan, we have tried to improve our management control system and internal control system. In addition, with the cooperation of external experts who carried out a step-by-step safety audit, we have restarted the service that enables the receipt, purchase and exchange of XRP and FCT.”
According to the statement, the restoration of trading services for XRP and FCT brings the total number of cryptocurrencies actively supported on the platform to nine following prior resumption of trading services for bitcoin, bitcoin cash, ethereum, litecoin, ethereum classic, lisk and NEM.
Coincheck also revealed that due to increased traffic volumes, there is a possibility that customers may find it temporarily hard to access the platform or make inquiries. To this end the statement said that the company reserves the right to temporarily suspend trading with no prior notice at its own discretion in the event of sharp transaction volume increases. In addition, customers were advised that the resumption of XRP and FCT trading may be suspended in the event that new problems are discovered.
The move represents a significant change in fortunes for the exchange which has been surrounded by uncertainty on the subject of whether or not it will fully reopen. Coincheck president Oki Matsumoto expressed doubt regarding the prospect of reopening to accommodate new users, as this is contingent on the platform’s ability to obtain a new license from the Japanese Financial Standards Authority after carrying out a comprehensive security and management overhaul.
Over the past 24 hours, following a steep decline in the price of major cryptocurrencies, the crypto market added $12 billion to its valuation.
Within a relatively short span, the valuation of the crypto market increased from $115 billion to $127 billion as Bitcoin (BTC), Ripple (XRP), Ethereum (ETH), Bitcoin Cash (BCH), and many other cryptocurrencies recorded gains in the range of 6 to 12 percent.
Bitcoin Cash performed strongly, recording an 11 percent increase in price. But, its price still remains below the $200 support level at $180.
Ethereum Avoids Double-Digit For Now
On November 25, when the price of Bitcoin fell to a new yearly low at $3,456, the price of Ethereum fell to a double-digit for the first time since May 2017.
At the time, cryptocurrency traders and technical analysts including Alex Krüger said that a short-term bottom could have been established as BTC and ETH declined to new yearly lows. But, it is too early to call for a mid to long-term bottom and the beginning of a new accumulation phase.
“Think that was it. Impossible to know if a bottom is a short or long term bottom. Possible to sense once a major bottom may be in by looking at high frequency price bars and volume i.e. when the elastic is ready to snap back. If it swings 15-30% off the lows, that’s a major bottom in % terms.”
Since then, within a 24-hour span, the price of Ethereum increased from $98 to $113, by more than 7 percent. Bitcoin and XRP rose by 6 percent and 8 percent respectively supported by decent volume.
As BTC fell to $3,456, the volume of the dominant cryptocurrency remained in the range of $5 billion to $6 billion. As the price of BTC recovered beyond the $4,000 support level, the volume of the asset achieved $6.7 billion, mostly composed of new buy orders.
Don Alt, a technical analyst, stated that the market crash on Sunday was the most intense daily price decline the analyst has seen in recent years.
Given the intensity of the drop, the analyst stated that a recovery from $3,500 is more likely but if it drops below $3,500, $2,900 is expected to be the next target.
Bitcoin rebounded from $3,500 in the past 12 hours. But, there still exists a possibility that the asset drops to a new yearly low at $2,950, which would signify an 85 percent drop from its all-time high, prior to a proper recovery.
“The most insane dumping I’ve ever seen in crypto. I’ve outlined two possible daily zones that price could find support on, that said I still recommend waiting for the larger timeframes. They might give you a delayed entry, but they won’t chop you up,” Don Alt said.
Expect More Bloodbath
The cryptocurrency market has experienced a solid short-term corrective rally and with major cryptocurrencies demonstrating oversold conditions, the market is primed to retain its momentum in the days to come.
A further drop below the current yearly low is still possible, especially if BTC endures another large drop before the end of November and affects the rest of the market.
Тhe BCHSV version conceded defeat in claiming the ticker of Bitcoin Cash, but the coin still experienced a rally amid its attempts to appeal to the community.
The Bitcoin Cash hash wars ended over the weekend, and the two branches of the Bitcoin Cash (BCH) chain have gone their separate ways. The new assets are now treated differently by exchanges, with BCHSV fighting for influence.
BSV has gained more than 62% in the past 24 hours, rising to $98.19. Volumes also rose more than tenfold after November 24, signaling that clarity over the split has finally encouraged traders. The BCH price, which applies to the ABC version, sank to $178.02, crashing by more than 51% this week, but BCH remains affected by the general slide of the entire market.
In terms of hashing power, the competition ended within 10 days after the hard fork, and previous supporters of either version stopped burning cash for unrewarding mining.
— Rhett Creighton (@HeyRhett) November 25, 2018
The end of the hash wars arrived rather fast, especially for a competition that promised no side would give up. Calvin Ayre, a proponent of the SV version and the Coingeek mining pool, vowed that the hash wars could continue for months but later changed his view, working out a form of truce.
here is my formal current view on how to sort the worlds first Bitcoin Hash war out. I call on all exchanges, wallets and payment processors to work with us on this Win/Win settlement plan.https://t.co/WZCjeMMiKK
— Calvin Ayre (@CalvinAyre) November 23, 2018
Ayre’s statement, however, points to the drive of BSV to position itself as “the true Bitcoin,” abandoning the quest to compete with the original chain.
“It is CoinGeek’s opinion that the two chains are now so far apart and have such divergent plans ahead that there is just no path back to joining them. We also no longer want the name Bitcoin Cash BCH as to us, Bitcoin SV is the original Bitcoin not the original Bitcoin Cash (whatever that even means),” Ayre wrote on the Coingeek blog.
He has called on the ABC team to build replay protection, thus turning the branched chains into hard forks and generating two separate assets.
The news that BCHSV had a future as a separate coin had an immensely positive effect on prices. During the hostile mining competition, the potential outcome was for the SV chain to disappear, hence the crash in the market price of BCHSV futures.
The awarding of the BSV ticker boosted trading as it became certain that the alternative blockchain would survive and continue as a separate asset. The large-block version, which would contain the vision of the nChain developer team, has been spreading through exchanges, and BSV managed to rise during one of the worst sell-offs in the crypto market.
Withdrawals for both bitcoin cash (BCH) and bitcoin SV (BSV) are now open on the Coinex exchange, providing an easy way for holders to split the two cryptocurrencies, which separated off from each other following the recent hard fork.
Coinex Opens BCH and BSV Withdrawals
Coinex has announced that BCH and BSV withdrawals are now available on the platform. The company said this was done following “technical evaluation and testing,” but caution is still advised. The Hong Kong-based cryptocurrency exchange is one of the few platforms to promise to split the two tokens for customers who send them as unsplit, pre-fork BCH coins. It has provided an easy option for anyone who wants to separate the coins and withdraw them to different wallets.
Coinex was founded in December 2017 and counts mining giant Bitmain among its investors. The exchange offers a wide range of crypto assets to be traded against BCH, bitcoin core (BTC), ether (ETH) and a couple of USD-pegged stablecoins. It has a native token, CET, which can be traded as well.
Market makers are not charged fees, while market takers pay a somewhat low 0.10 percent on trades. Coinex also processes over-the-counter trades and offers referral rewards. It supports multiple languages and provides trading services in about 100 locations around the world.
If you are looking for other ways to split your coins, possibly without going through an exchange, check out news.Bitcoin.com’s recently published DIY guide.
Thailand’s Securities and Exchange Commission (SEC) has warned the public against 14 websites whose operators have been soliciting customers to buy and sell cryptocurrencies and related products. The regulator says these operators are not authorized to conduct crypto business in the country. Currently, only seven companies are temporarily approved for crypto operations.
The Thai SEC issued a warning on Friday against 14 websites whose operators have not been approved to conduct cryptocurrency business in Thailand.
The commission explained that it has received complaints about these businesses which have been encouraging the public to buy and sell cryptocurrencies through social media. The regulator further warned the public to take caution when solicited to purchase or sell digital assets by unauthorized individuals.
The 14 websites named by the Thai SEC are payniex.com, misterchanger.com, thaiexchanger.com, egtexchange.com, digicardshop.com, superrichexchanger.com, emoneythai.com, i-exch.com, exchangercoin.com, gamershoppings.com, ecurrencyplus.com, ecurrencythailand.com, lnwexchanger.com, and R Exchange’s Facebook page. Some of these websites have removed their crypto offerings after the commission’s warning.
One of the operators on the list, R Exchange, announced on Nov. 18 that its kiosk at Bangkok’s main airport, Suvarnabhumi, had begun offering the exchange of seven cryptocurrencies — BTC, BCH, ETH, ETC, LTC, XRP, and XLM. Its announcement also states that a withholding tax of 15 percent will apply.
Only Seven Operators Allowed
According to Thailand’s cryptocurrency regulations which went into effect in May, companies wanting to conduct crypto business in the country must obtain approval from the Thai SEC, the country’s main crypto regulator.
The commission reiterated that no digital asset operator or issuer has been granted full approval. Seven companies, however, have been temporarily approved while their applications are being reviewed. According to the regulator’s website, six of them are crypto exchanges: Bitcoin Co. Ltd. (Bx), Bitkub Online Co. Ltd., Cash2coins, Satang Corporation (Tdax), Coin Asset Co. Ltd., and Southeast Asia Digital Exchange Co. Ltd. (Seadex). One company, Coins Th, has been temporarily approved as a crypto dealer.
Tdax rebranded as Satang Pro on Sept. 28. The company is currently working on launching a new wallet and “the first digital asset payment platform in Thailand that allows the customers to buy, sell, pay for utility services, and top-up their mobile phones and gift cards,” its website details.
Coin Asset completed its first annual meetup event called Cax Swag on Nov. 11. At the event, founder Sivanus Yamdee unveiled the exchange’s own token as well as its plan to expand globally.
Bitkub also plans to issue its own token. The CEO of Bitkub Capital Group Holdings, Jirayut Srupsrisopa, said early this month that the exchange plans to increase the number of supported coins to 20 by the end of the year, the Nation reported. The exchange also began offering the trading of USDT against the Thai baht on Nov. 19.
Earlier this month, the Thai SEC warned against a few companies promoting their crypto exchange businesses in the country without approval including South Korean exchanges Q Exchange and Coin25. The agency has also issued warnings against nine unauthorized tokens.
The Ripple market segment witnessed a 21 percent recovery upon establishing a new November low at $0.329.
The XRP/USD rate on Monday touched 0.399-fiat in a higher high formation on BitFinex. In the meantime, the coin’s market cap reached close to $15.61 billion, replacing Ethereum to become the world’s second-largest cryptocurrency.
Ripple’s chief marketing strategist Cory Johnson on Friday furthered their dialogue about how XRP is better than Bitcoin. Not that his statements could have rattled the bitcoin investors, but they certainly could have attracted potential holders. Johnson wrote about how bitcoin was more centralized due to being extremely influenced by the Chinese mining community, calling it a poor technology.
-Bitcoin has some real technological limitations
-The digital asset that show fundamental use cases will develop a fundamental value
-XRP is being used more than Bitcoin being used as of today
— Steven Diep (@DiepSanh) November 23, 2018
The XRP correction nevertheless took place in the absence of solid backings, meaning its sustainability cannot be guaranteed at this moment. At worst, it could be a bear pennant formation which indicates the continuation of the current downward trend. At best, XRP could be heading to an extended upside recovery action, considering its the least-bad performing cryptocurrency in the bear run that has shaken the entire crypto market.
The daily XRP chart, meanwhile, allows a better inside look, revealing RSI and Stochastic had lately dipped into their oversold regions. The XRP/USD rate at most corrected to stabilize, meaning the near-term uptrend should extend to the nearest resistance level, probably towards the 100-period simple moving average before a potential pullback overtakes the trend.
At the same time, 0.329-fiat is providing decent support according to the daily basis. The level had witnessed buying sentiment before and promised to hold the bears with few bulls. A break below 0.329, on the other hand, could be devastating as it would expose XRP/USD to a crash towards the next potential downside at 0.268-fiat. This level has offered strong support since August.
A narrowed down version of the XRP/USD rate chart offers us more insights into how we could play the trades intraday. As of now, the pair is clearly targetting 0.396-fiat as its interim resistance while resting its foot at 0.371-fiat, the interim support for the rest of the day.
We are looking at XRP/USD reversing from the 200-period simple moving average on a 15-minute chart. It provides us with a decent short opportunity towards the interim support. At the same time, placing a stop loss at 0.390-fiat will protect our position from maximum losses should the upside correction resumes.
Having said that, an upside continuation would have us wait for a breakout above the interim resistance. If it happens, we will enter a long position towards 0.402-fiat as our interim upside target while maintaining a stop loss order at 0.393-fiat.
Disclaimer: The author holds XRP, Bitcoin, Bitcoin Cash, and Ethereum. The analysis above is his personal opinion and does not reflect the opinions of megacryptoworld.com. Readers discretion is advised.
Malaysia has indicated that the country’s central bank has the last word regarding the introduction of new cryptocurrencies.
According to the Minister of Finance, Lim Guan Eng, the country’s central bank Bank Negara Malaysia (BNM), will have to be consulted regarding cryptocurrency projects as the final decision rests with the apex bank.
“This is where I wish to advise all parties, no matter who they are, intending to issue bitcoins or cryptocurrency, that they must refer to Bank Negara which is the authority that will have the final say on this new form of currency,” The Star reported Lim as having said while answering a question in parliament Monday.
Noting that the government was not against new currency forms, Lim insisted that existing laws would have to be followed.
“Don’t do it without Bank Negara’s guidelines or directive on the matter to avoid doing something wrong and against the law,” added Lim.
Harapan Coin Project
The response by Malaysia’s finance minister came as intense debate rages over the Harapan Coin which has been dubbed the first political fundraising platform in the world to use blockchain technology. During Monday’s parliamentary debate an MP again raised the issue saying the Harapan project had generated hundreds of U.S. dollars despite not having received the approval of BNM.
The Harapan Coin project has generated controversy in Malaysia with some politicians pushing for it while others urge caution. Khalid Samad, Malaysia’s Federal Territories Minister, launched the project as a way of raising funds for Pakatan Harapan, Malaysia’s current ruling political party, ahead of next year’s elections.
BNM Approval Being Awaited
While launching the Harapan Coin project Samad indicated that a proposal was being prepared with a view of presenting it to the country’s central bank in order to obtain regulatory approval. Mid this month, Samad defended the project saying cryptocurrencies were the wave of the future.
“The founder of Alibaba Group, Jack Ma, has also said it (blockchain) is the future in terms of technology … When we manage and use it well, there would be value to it. People would buy (the Harapan Coin) and the value would go up when it is used for government matters and other purposes,” Free Malaysia Today reported Samad as having said earlier this month.
Critics of the cryptocurrency have included former Malaysian Prime Minister Najib Razak who has urged the individuals and entities behind the project to be more transparent in order to ensure the masses are not ripped off.
Crypto hardware wallet provider Trezor has warned customers of a new method being used by thieves to steal cryptocurrencies from hardware wallets.
Trezor, known for its flagship hardware wallet Trezor One and the Trezor Model T, said unscrupulous individuals were distributing “one-to-one copy of Trezor One,” using it as a medium to steal other people’s money and tarnish the brandin a Medium post. The company said they had gotten accustomed to Trezor clones, created by legitimate companies and marketed under a separate name, but the revelations of the Trezor fakes are startling.
According to Trezor, the fake hardware wallet replicates the real wallet to the core, which makes it hard to distinguish from the original.
The fakes pose a security threat to the funds of cryptocurrencies and other digital assets of users, Trezor noted in the post.
“You would not entrust your money to somebody who has already cheated you by selling you a different product than you thought you were buying. We, therefore, recommend not to use this device and report it to us, which would help us fight these scams and provide you with a legitimate device.”
One way of distinguishing the fake Trezor One devices from the original is through the pricing. As with most clones, the end product is often offered at a very steep discount to encourage patronage, and this is a red flag Trezor hopes users can recognize when they see it.
Another way of distinguishing the real deal from the fakes is with the hologram that comes on the seal of the box. Trezor uploaded a video on the Activation Page for new hardware wallets so users can view and compare the hologram in the video with the one on their devices. The hardware wallet provider also warns customers to shun online marketplaces when buying their wallets and only make purchases from authorized resellers, the official Amazon store and on Trezor’s website.
“If you are not sure about the authenticity of the seller or the channel, always proceed with the official channels,” the post concluded.
The latest move comes on the heels of the recent bitcoin giveaway scams on Twitter, where hackers took control of verified and trusted Twitter accounts to offer free tokens to unsuspecting members of the public.
The securities commissioner of North Dakota has issued Russia’s Union Bank Payment Coin with a Cease and Desist Order.
According to Karen Tyler, North Dakota’s securities commissioner, Union Bank Payment Coin promoted unregistered securities that were potentially fraudulent via an Initial Coin Offering (ICO). This came on the back of investigations done by North Dakota Securities Department’s ICO Task Force which is tasked with the responsibility of identifying ICOs and other crypto-related investments that pose a risk to investors in the Peace Garden State.
Per the North Dakotan securities commissioner, the Union Bank Payment Coin is attempting to pass off as an initiative of Liechtenstein’s Union Bank AG which earlier this year announced plans to issue its own security tokens and a stablecoin pegged to the Swiss Franc.
Not the Real Deal
However, the two entities are vastly different as Union Bank AG is regulated and fully licensed by Liechtenstein’s financial regulator, the Financial Market Authority (FMA). Union Bank Payment Coin, on the other hand, appears to be a Russian entity as the internet protocol address of its website is based in Russia. Its website is also registered to an individual based in the same country.
On its website, Union Bank AG has warned of the possibility of investors being ripped off by opportunists saying that no wallet addresses exist either publicly or privately to which cryptocurrencies or traditional currencies can be sent to. Additionally, the bank warns that it hasn’t set up websites for registration purposes or for contributions and that interested investors must deal directly with the bank:
“Fraudulent websites warning: Please be aware of potential scammers. The only way to participate in Union Bank AG’s coin offerings is via a direct contact with the bank.”
Apparently, the scammer had set up a website, www.unionbankag-invest.com, which had the feel and appearance of being the legitimate bank’s website in order to recruit investors. The legitimate website of Union Bank AG is www.unionbankag.com.
This is the second time in a little over a month that the North Dakota Securities Department has issued a Cease and Desist Order against ICO promoters. Mid last month, Advertiza Holdings, Crystal Token and Life Cross Coin were prohibited from selling unregistered securities to North Dakotans.
According to the securities department, the three ICOs were targeted for among other things promising unrealistic returns to investors. Crystal Token was, for instance, promising investors a daily return on investment of 2% while failing to offer adequate information regarding the identities of its directors and/or senior executives.
Cyber criminals seem to have reached a new low, as they have targeted the site of one of the most popular children’s foundations in the world and infected it with crypto mining malware.
In a published report this week, researchers from security firm Trustwave reported that a CoinImp crypto mining script was injected into the Make-A-Wish Foundation website and that this script used the computing the power of visitor’s to mine cryptocurrencies for the hackers.
The Make-A-Wish Foundation site was built on Drupal, a popular open-source content management system. Earlier this year, Drupal announced that there had been a vulnerability in their software that allowed hackers to inject malicious code into specific sites that had not incorporated their security patch. Just this spring, the Drupalgeddon 2 bug, a Remote Code Execution (RCE) vulnerability in older versions of Drupal, affected over 100,000 sites.
Trustwave researchers believe the Make-A-Wish Foundation website might have been compromised through the same vulnerability. The foundation subsequently identified and removed the malicious script in question.
Cryptojacking, which involves the use of malicious code to force other computer users to mine cryptocurrencies without their knowledge, has become a near-epidemic for internet users.
Earlier this year, a Citrix report revealed that a cryptojacking malware had hit at least 59% of UK companies at some point.
In India, cryptojacking is a menace, with over 300,000 routers in Brazil and India found to have been injected with crypto mining malware. The Economic Times (ET) revealed in September that Indian government websites had not been spared from this phenomenon, stating that widely trusted Indian portals had been exploited by the cryptojacking menace.
According to a security researcher quoted by ET, government websites were targeted due to the high number of online visitors and the trust these visitors have when they visit them.
“Earlier, we saw a lot of government websites getting defaced (hacked). Now, injecting cryptojackers is more fashionable as the hacker can make money.”
Internet security provider McAfee Labs weighed in on the epidemic last week, warning users of a new cryptojacking malware called “WebCobra,” which it said can operate without a trace on a victim’s computer.
The researchers went on to state:
“As the malware increases power consumption, the machine slows down, leaving the owner with a headache and an unwelcome bill.”
Ohio will become the first state in the US to officially accept tax payments in bitcoin, according to a Wall Street Journal report. Beginning this week, businesses who plan to make settlements for their taxes with bitcoin can visit OhioCrypto.com and register to pay all their corporate taxes to the government in BTC. The state government has partnered with crypto payment processor BitPay to handle the payment in crypto and conversion to dollars for the tax office.
The idea was birthed by the current state treasurer, Josh Mandel, who sees accepting cryptocurrency as a great way to rebrand the Buckeye State by enabling forward-thinking tech ideas. Bitcoin has been used for speculative purposes in most cases in the US, as it hasn’t picked up as a means of payment for goods and services for several reasons. One key reason for this is the massive price volatility, which makes many merchants nervous to accept it — even though this is generally not something that they should worry about when using a payment processor such as BitPay or Coinbase.
Mandel, who has been interested in bitcoin since he was appointed in 2011, said he sees the flagship cryptocurrency “as a legitimate form of currency.”
While Ohio’s move won’t do much to affect the free fall of cryptocurrencies at the moment, it’s still a win for bitcoin and a form of government approval, which the cryptocurrency has been lacking in the United States.
The WSJ quoted Jerry Brito, the director of Coin Center, a crypto research and lobbying firm, who said that he believes a government institution like the state treasury accepting tax payments in bitcoin “sends a message that bitcoin’s a technology that can be used by anybody—by bad guys but also by the government.” Other states in the US who have considered bitcoin payments for taxes includes Arizona, Georgia, and Illinois, but the bills were met with resistance at the legislative level.
Earlier this month, the Ohio-based Great Lakes Science Center announced its decision to accept payments in bitcoin, a move which the museum hopes will help develop the blockchain industry.
According to Kirsten Ellenbogen, the CEO of Great Lakes Science Center, visitors can pay for their admission tickets into the museum with BTC.
“There is a lot of excitement around the conference. Accepting bitcoin is just a small part of the momentum to grow a blockchain ecosystem in Cleveland,” Ellenbogen said at the time.
Upstart social network Gab has occasionally been dubbed the “alt-right Twitter.” A haven for mainstream social media castaways like Milo Yiannopoulos and even Alex Jones, the years-long spike in extremist right-wing terrorism has led to a backlash within the banking community toward sites which are seen to foster the ideology behind some acts of violence. For Gab’s part, they state that they do not openly encourage or discourage hate speech. They aim to be a neutral platform which allows the users to determine the type of content that should be on the platform so long as it follows a very narrow set of rules.
They haven’t found themselves in a favorable media spotlight in some time. Their last introduction to the reading public was as the favored platform of the Pittsburgh extremist right wing terrorist who killed 11 people in a Synagogue, Robert Bowers.
According to Gab founder Andrew Torba, Gab is now having payment processing issues. They’ve had acceptance from several processors, but the banks that have a lot of sway with these processors have allegedly refused to allow business from Gab. This is similar to the way the Daily Stormer was banned from PayPal, and resorted to Bitcoin and Monero a couple years ago, with surprising results.
There weren’t a lot of details as to the reasoning given for Gab’s denials. It seems easy to presume that businesses like Stripe and PayPal are simply not interested in being associated with Gab due to its reputation, particularly following the association of Gab and domestic terrorist acts. Torba said that “Coinbase has already banned us” and gives that as a reason for choosing BitPay. Luckily for him, BitPay and every other Bitcoin provider could ban them, and they’d still have plenty of options for processing payments with cryptocurrencies.
if BitPay reacts in kind, extending service to Gab, or if they join the crowd and also decide not to allow Gab to easily process payments. One thing is for sure: adding a network of tens of thousands of users who have a need to pay in cryptos will not be a bad thing for BitPay or cryptos generally. On the business side for Gab, they’ll have various new stablecoin options as a means to protect their earnings from volatility, although if they’re having banking problems, they could ultimately have problems cashing out in the traditional way.
Bitcoin (BTC) has experienced five major corrections to date, and the recent bear market of 2018 is the smallest major correction to date.
As seen in a table shared by a renowned trader and technical analyst Peter Brandt, BTC experienced a drop of 79.7 percent in the past eleven months as its price declined from $19,500 to $4,035.
On November 21, Bitcoin experienced a steep decline from $4,500 to $4,050 on fiat-to-cryptocurrency exchanges like Kraken and Coinbase. The dominant cryptocurrency swiftly recovered back to $4,500, but the sudden flash crash to the $4,000 support level placed BTC close to reaching an 80 percent drop from its all-time high.
Throughout the past nine years, BTC went through four large corrections excluding the 2018 bear market. In 2011, 2013, and 2015, Bitcoin recorded drops in the range of 82.6 percent to 94.3 percent, declining by 85.3 percent on average.
For BTC to record an 85 percent loss from its all-time high, it would have to drop to $2,950. But, there still is strong support at the $4,000 support level.
Even if BTC drops to $2,950, an 85 percent drop from its all-time high is only the average loss BTC recorded in the past four major corrections.
Previous corrections can be considered as references and could provide clues for when the current bear market may end. However, market conditions, infrastructure, and mainstream awareness are vastly different from 2011, 2013, and 2015.
The 79 percent decline in the price of BTC from $19,500 is said to be mainly caused by a lack of liquidity in Bitcoin markets. Trading giant Susquehanna executive Bart Smith noted that there are no viable investment vehicles for a regular retail trader. It is still difficult, without specific know-how, to invest in the cryptocurrency market.
In 2015, apart from some announcements of merchant adoptions, there were no signs of a major financial institution, bank, or asset manager of integrating major cryptocurrencies to improve the usability and accessibility of the asset class.
This year, Fidelity, the world’s fourth-largest asset manager, and ICE, the parent company of the New York Stock Exchange, introduced Fidelity Digital Assets and Bakkt to assist both retail investors and institutional investors in the traditional finance sector in investing in crypto.
The short-term price trend of cryptocurrencies does not accurately portray the last eleven months of positive developments in the cryptocurrency sector, and for that reason, high profile investors like billionaire Tim Draper, Mike Novogratz, and Susquehanna executive Bart Smith remain optimistic in the long-term trend of Bitcoin.
“That has led to the second problem which is without the new capital on-ramp, liquidity has been very low. And so we’ve kind of seen a stable price all through summer, it was at $6,000 give or take. Volatility got really light at the end of July. So what happens is in that environment, if you have a contentious fork, it does not necessarily create a tremendous amount of confidence and when those sellers come in, there’s just no liquidity to absorb it. Hopefully, with Bakkt, Fidelity, and further regulations, there are going to be enough capital to soak it up.”
$4,000 is the Bottom?
It is too early to confirm that the cryptocurrency market has achieved a bottom and that BTC has stabilized in the low price range of $4,000 to $4,500.
Depending on the short-term price trend of BTC throughout November, several potential catalysts like Bakkt and a Bitcoin exchange-traded fund (ETF) decision in February could trigger an accumulation period throughout the first quarter of 2019.
Maintaining good operational security is imperative for all web users, but it’s particularly important in the cryptocurrency space. Prying eyes are everywhere on the internet, from law enforcement to hackers and from blockchain forensics firms to data resellers. Examining the opsec errors that got several notorious bitcoiners robbed or busted yields valuable lessons we should all heed.
Opsec Is a Scale Not a Switch
There’s no such thing as optimum opsec or perfect privacy. Just because the internet’s heavily backdoored and broken doesn’t mean you should concede defeat. It’s possible to enhance your online security without adding complexity. The most memorable opsec lessons come from studying those who let their guard down or got sloppy and were duly punished. You don’t have to be a darknet market boss or a bitcoin whale to benefit from keeping your crypto, data and browsing habits locked down. The following figures all paid the price for opsec errors that could have been easily avoided.
Silk Road operator Dread Pirate Roberts (DPR), later to be identified as Ross Ulbricht, made a string of mistakes that ultimately led to his dox and arrest. Ulbricht remains a visionary and a hero to many bitcoiners, but even his greatest advocates will concede that he was the architect of his own downfall. The key takeaway from DPR’s takedown is this: Don’t retain unencrypted documents that would be damaging to you if they fell into the wrong hands.
In addition to keeping passport scans of Silk Road employees and chat logs, DPR kept a diary in which he confessed to ordering assassinations and all manner of other nefarious deeds. When feds seized Ulbricht’s laptop while he was logged in to Silk Road, they got the lot. Don’t store incriminating information on your phone or laptop, particularly not private keys or 2FA backup codes. If your device is stolen, seized or injected with malware, you’re screwed.
Former darknet market vendor Gal “Oxymonster” Vallerius is serving a 20-year jail term in America for drug offences. While the manner in which he was detained — at a Texan airport after flying in to attend a beard contest — caught the headlines, the way he was unmasked is where the focus should be. One of the primary tells that connected the Oxymonster pseudonym with Gal Vallerius was writing analysis. Language, punctuation, cadence and other stylistic tells such as capitalization are highly individualistic. Even something as simple as typing a trademark phrase to submit vendor feedback on the deep web — “Banging!” — can be enough for a dox.
If your pseudonymous persona is doing something that could deleteriously affect your real-life identity, be very careful what you write and how you write it. Even law-abiding citizens like Tether critic “Bitfinexed” have allegedly been doxed through writing analysis.
Not everyone on this list is a major criminal, but deep web kingpins are ripe for analysis. Not only is their fall from grace monumental, but court records provide precise details of how they were caught. Alphabay boss Alexandre Cazes made plenty of mistakes, the crux of which can be distilled into two words: don’t recycle. Recycled usernames, email addresses and, most critically, passwords are an opsec accident waiting to happen.
Cazes used his old Hotmail address as the source address for Alphabay’s welcome emails and adopted a pseudonym on the site he’d previously used elsewhere on the web. Like Ross Ulbricht, Cazes didn’t encrypt his laptop, enabling law enforcement to access all his records and seize millions of dollars in cryptocurrency. And all because he was too lazy to think up a new pseudonym or create a new email address. The fact that the Canadian citizen went on to commit suicide in a Thai jail cell after his arrest makes his case even more tragic.
Messari founder Ryan Selkis, aka “Twobitidiot,” is a law-abiding citizen who holds the dubious achievement of having been SIM-swapped twice. Also known as SIM jacking, the scam involves an attacker porting the victim’s phone number over to a new handset through social engineering. Selkis’ second jacking occurred only this month, despite the tech-savvy entrepreneur having taken robust measures to thwart a repeat attack.
“I a) flagged my account as high-risk, b) added a pin, and c) demanded account changes only take place in store with a photo ID,” he explained, but all to no avail. Mercifully, the attackers were unable to access his cryptocurrency on this occasion. His advice for others includes removing SMS verification for email, and using 2FA only through an app such as Google Authenticator. Selkis encouraged his readers to follow the guides that others have written on preventing the likelihood of SIM jacking. Unfortunately, even with numerous precautions in place, cellphone network staffers remain an Achilles’ heel.
Opsec is generally thought of in technical terms: using strong passwords, connecting via a VPN and other good practices. But one of the biggest ways in which cryptocurrency users make themselves a target is by running their mouth and revealing the size of their digital wealth. Most people aren’t as careless as Pavel Nyashin, a Russian Youtuber who was robbed of $425K of crypto by masked assailants after boasting about his wealth in a series of videos.
Balancing your desire to tell the world about bitcoin without revealing the size of your bitcoin holdings can be tricky. But as case after case has shown, even gossiping to friends about the size of your stack or how it’s secured can make you a target. Keep that business to yourself: Don’t show off your portfolio or your hardware wallet, no matter how flashy the device might look.
Whether you’ve got a lot to hide or a little, opsec isn’t optional: It’s essential. Be diligent, be vigilant and be safe.
Norway, a country known for its green crypto mining outfits, has decided to roll back a tax structure which previously allowed cryptocurrency miners to be taxed on power consumption at the same rate as other industries which use a lot of energy, according to a local news outlet.
A parliamentary representative named Lars Haltbrekken told Aftenposten.no:
Norway can not continue to provide huge tax incentives for the most dirty form of cryptographic output as bitcoin. It requires a lot of energy and generates large greenhouse gas emissions globally.
The change is astronomical in nature. Currently miners pay about 0.48 Øre – or just 0.0005 USD – per kilowatt hour. This is in line with other high energy consumers of 0.5 megawatts or more. However, after January 1st, they will pay the normal electricity tax rate of 16.58 Øre, or roughly two cents – in tax alone – per kWh. The reaction from pro-business Norwegians was not favorable.
Message from native Norwegian & CCN Publisher Jonas Borchgrevink:
Norway is one of the greenest nations on earth when it comes to the production of electricity. 99% of the electricity is produced by hydropower, and we continue to expand with wind power-, offshore wind power-, solar energy- and bio-energy facilities. From January 2018 to October 31st 2018, we exported 15 071 492 MWh, imported 6 321 079 MWh with a total “net profit” of 8 750 413 MWh. We are in excess of green energy.
That the parliament and the government claims the reason for removing the electricity tax break for Bitcoin mining is that it generates large greenhouse gas emissions globally does not make any sense. Why would a “green nation” punish miners companies from Norway, encouraging them to re-establish elsewhere and get a higher carbon footprint? It is plain stupid. If we are to be a “green nation,” why don’t we shut down the offshore oil production that pumps up more than 1.6 million barrels per day? Parliament is hypocritical. Look at this quote from norskpetroleum.no:
Total production rose in 2017 for the fourth consecutive year, and gas sales were at a record high. Never before has so much gas been sold from the Norwegian shelf as was the case in 2017. In the next few years, total production is expected to remain high.
A ranking economist, Roger Schjerva, told the same local publication that:
We just say no to income and work in many municipalities in Norway. We can only hope that politicians understand that energy-intensive computing is one of the things we will be living with in the future.
And a Kryptovault spokesperson, Gjermund Hagasæter, said:
If this is correct, it will be a complete disaster for the cryptocurrency industry in Norway. This gives a terrible signal to foreigners that are thinking of investing in Norway.
Norway’s power grid is almost entirely hydroelectric, which somewhat belies the statements of the representative – some might interpret the move as a money grab or effort to balance the budget on the back of an emerging industry. It is with some degree of irony that one of the countries with the most miners, China, still relies on coal power plants for much of its grid.
According to Bitnodes, there are just 48 full Bitcoin core nodes operating in Norway at time of writing. While “Bitcoin” is often used interchangeably by people less familiar with it, it can be extrapolated from that figure that the number of mining operations in the country is probably does not number in the thousands, across cryptocurrencies. Meaning that while the move, which takes effect at the beginning of 2019, will not necessarily be a huge setback to the Bitcoin mining network as a whole, it definitely will have an impact on the decision of miners in the future regarding Norway as a viable place to start and/or do business.
Forbes’ coverage of the matter cites a company called Northern Bitcoin as claiming that a Bitcoin costs about $7,700 at present to mine in Norway. Whether or not this is accurate, the cost of electricity in mining will increase. Mining profitability varies on a number of factors, particularly the size of the mine. The ideal mine has a lot of machines mining 24/7, which means that power is consumed and used even when there is no actual profit being had. The recent downturn in the global price of cryptocurrencies is sure to have a secondary effect on the profitability of Norwegian miners, making it an all-around unfriendly zone for Bitcoin miners.
Nobuaki Kobayashi, the trustee of the collapsed bitcoin exchange Mt. Gox, is seeking to extend the deadline for filing civil rehabilitation claims to December.
Kobayashi announced Thursday that he will make “efforts to request the court to accept proofs of rehabilitation claims received by December 26, 2018.”
The earlier deadline of Oct. 22 has already passed, but as the creditors are located worldwide, the trustee said more time is needed to collect proof of claims and ensure that all forms are delivered.
The online filing system for rehabilitation claims is still accessible, and creditors who are unable to access the system can also manually fill and send the forms to the office of the trustee, not later than Dec. 26.
“Whether proofs of rehabilitation claims filed after the deadline will be accepted is determined by the court,” the trustee explained.
Once the world’s largest bitcoin exchange by trading volume, Mt. Gox officially filed for liquidation in April 2014 after claiming to have been hacked for 850,000 bitcoin, some of which was later found. At the same time, it dealt a blow to investors by dropping its plan for civil rehabilitation.
After a long wait, creditors had a victory in June 2018, when the Tokyo District Court issued an order approving a petition to begin civil rehabilitation. The petition was initially submitted in November of 2017.
Now, if the court approves the December deadline, the creditors will have one more month to submit proof of their claims.
The IOTA Foundation has revealed for the first time that it plans to gradually phase out the IOTA network Coordinator, which some see as a centralization risk.
In a series of posts on its official blog on this week, the foundation outlined a sequence of steps it plans to take before “Coordicide”, which it sees as a major landmark on the road to complete decentralisation.
IOTA Network Coordinator Origin
While IOTA is not a blockchain but a Directed Acyclic Graph (DAG), it does however employ a Proof-of-Work network security mechanism like a blockchain. This means that in theory, if a user were to command enough of the network’s hashing power, they could bend the consensus rules to do anything they want including double spending and network splits. This was a particularly real risk for IOTA because unlike Bitcoin or Ethereum which have thousands of miners, the IOTA network’s hashing power was relatively small, meaning it would be less difficult for an attacker to gain control of it.
To forestall such a scenario, the IOTA network coordinator was created with a primary remit of preventing double spends. Known as “Coo”, the coordinator, which is controlled by the IOTA Foundation issues periodic transactions known as milestones. If any transaction on the IOTA network is not directly or indirectly references by a milestone, it is not confirmed. While this gives the foundation a certain amount of control over the network, it should be noted that it does not allow for transaction history to be changed or user funds to be accessed.
IOTA Gets Rid of Coo
According to the IOTA Foundation, while Coo has served its purpose well, in the interests of the long-term success of the framework, it is necessary to kill it off first of all because at least theoretically it permits the Foundation to choose which transactions receive priority, and also permits the Foundation to freeze suer funds by instructing milestones to ignore transactions involving such funds.
In addition, Coo provides a central point of risk because if it stops functioning or is taken over by a bad actor, all confirmations on the IOTA network would halt. Even more significantly, the need for milestones to confirm transactions works against the scalability of IOTA in the long term.
Despite the announcement, for now there exists no firm timeline has been given for the removal of Coo. A quote from the blog post reads:
“The short answer is that the Coordinator can and will be removed when our research team is satisfied that we understand the coordinator-free Tangle sufficiently.”
According to the Foundation, while it will get rid of Coo eventually, there is no plan to rush this through. The “Coordicide” project is the vehicle being used to ensure that all changes are communicated clearly and ahead of time as the Foundation begins the process of killing the coordinator, as outlined in a subsequent post.
Indian police in the city of Pune have charged Amit Bharadwaj along with three other individuals – Vivek Bharadwaj, Pankaj Adlakha and Hemant Bhope, involved in a multi-level marketing (MLM) crypto scam.
It is alleged that Amit who is the central character of the trial collected about Rs 10 crore (about $1.42 million) from unsuspecting investors, under the guise of high-yield cryptocurrency investments.
The Back Story
Amit Bhardwaj started his cryptocurrency journey in 2016, according to his LinkedIn profile. He describes himself as an entrepreneur, investor, dreamer, and pioneer of Bitcoin on LinkedIn. He boasts of being the founder of four crypto-based businesses – Amaze Miners, GB Miners, CoinBank, and Amaze Mining & Blockchain Research Ltd.
Although being the founder of several businesses is not a bad thing, Amit roped himself in by the promises he made to investors. Quoting his description of Amaze Miners on LinkedIn for example, he stated that:
“World’s Most Intelligent Alt-coin Mining Technology. We have produced upto 200% yearly returns on the investment in Alt-coin Mining.”
They promised as much as a 10% monthly return on Bitcoin investments for a period of 18 months.
According to an article by The Indian Express, Amit along with his team held elaborate parties and summits in Macau and Dubai. Yachts were booked for several days, all in a bid to lure investors. One of the investors was quoted on the news site saying that:
“We were invited to attend the investors’ summit in Dubai and Macau. Tickets along with other documents were sent to us. When we started raising our voice for not getting the profit on our invested money in Bitcoin during the summits, Amit and his younger brother Aditya Bhardwaj assured us that our money would be returned but all in vain. Apart from India, people from China, Vietnam, Dubai, Mauritius and other countries were also present at these summits.”
The scheme came crumbling when investors were not getting their returns as promised last year. Several investors lodged complaints against Amit claiming that they had been scammed. Amit was however arrested in Bangkok on March 31, last year. He and his accomplices have remained in custody ever since.
The accused have been identified as kingpin Amit Bharadwaj, his brother Vivek Bharadwaj, Pankaj Adlakha and Hemant Bhope. Earlier, police submitted a chargesheet against Sanchit, a resident of Delhi and Rajesh Kumar alias Raju of Rajasthan, who was said to be living in Delhi. They were arrested from Delhi. Police said they had direct links with the main accused, Amit Bharadwaj.
Times of India reporting on the roles played by each of the accused underlined Amit Bharadwaj as the mastermind of the scheme. His brother Vivek functioned as the marketing manager and promoter of Gainbit coin and also doubled as a speaker during company-organized events. Pankaj Adlakha and Hemant Bhope handled the roles of promoter and motivational speaker/organizing secretary, respectively.
The EU is in the process of establishing a blockchain forum and has invited at least five major banks including BBVA and Santander. The purpose of the IATBA (International Association for Trusted Blockchain Applications) is to “ develop a trusted, secure and resilient European Blockchain Services Infrastructure meeting the highest standards in terms of privacy, cybersecurity, interoperability and energy efficiency, and fully compliant with EU law.” Trusted seems to be the key word, and to demonstrate as much, they are involving major banks from the outset.
A meeting on Tuesday entitled “Bringing industries together for Europe to lead in blockchain technologies” formalized the upcoming launch of the IATBA, which is to be a coordinated between the EU’s executive body, the European Commission, and the European Blockchain Partnership, an ongoing EU effort to get member states on board with promoting blockchain technology.
According to the EC itself, the public sector plays a significant role in the blockchain and as such, frameworks need to be developed which will ensure that Europeans benefit and that Europe becomes a hub for blockchain technologies.
Europe’s leadership in the development and uptake of this new technology requires close cooperation between the public and private sectors. Governments and economic actors must work together to overcome regulatory obstacles, increase legal predictability, lead international standardisation efforts and accelerate research and innovation to support scalability of innovative blockchain technologies.
Where Are The Blockchain Companies?
Curiously missing from the EC’s writings on the subject were the names of blockchain industry members who’d been invited to participate. Santander and BBVA made separate announcements of their own. BBVA writes:
According to [Carlos] Kuchkovsky [Head of Research & Development New Digital Business], blockchain and other new technologies – artificial intelligence, for example – have to be understood as simple pieces that make digital ecosystems reliable. In this regard, he hopes that these types of projects will contribute to providing more clarity to the regulatory uncertainty that currently surrounds the use of these technologies. Nevertheless, he believes it is “essential to establish a system of governance that aligns the different participating industries and their objectives”, which should represent different sizes of organizations and sectors.
BBVA has significant experience in the blockchain. Earlier this month, they completed a loan with some partners using the technology. It wasn’t their first ti me.
At least one member state has been pushing to become a hub for regulated ICOs – France, which is restructuring its tax code and encouraging ICO development to relocate to the country through visas specifically aimed at the industry.
Erstwhile, in the United States, arguably the birthplace of the blockchain, ICOs and other somewhat experimental products and business models have been on notice lately, with the SEC and Department of Justice taking up multiple enforcement actions against industry participants.
The market’s imploding capitalization seems to have sparked an industry-wide battle cry to build and bring to fruition blockchain’s unrealized potential. And as Binance’s defiantly cheery CEO Changpeng “CZ” Zhao pointed out, it seems that developers have answered the call.
The ubiquitous executive and Twitter personality highlighted in a tweet, Nov. 20, that a number of cryptocurrency pillars have published new releases on GitHub, the largest source-code host in the world recently acquired by Microsoft.
Despite the rough seas out there, builders are building. New releases on GitHub today from:
(This is more than the usual we see from GitHub). Kudos!
— CZ Binance (@cz_binance) November 21, 2018
Bitcoin ABC has fired off its 0.18.5 release for Bitcoin Cash, apparently determined to keep “users’ funds secured and the network and currency fully functional” amidst the ongoing protocol fork saga.
EOS, the sixth-largest cryptocurrency by market capitalization, is now available in version 1.4.4, which purportedly offers “bug fixes and continuous integration improvements”. Dan Larimer’s other brainchild, BitShares, has been upgraded in a new release fixing a previously blank voting page for its user interface.
Cardano and Nano have also been pepped up with new releases, ironing out the kinks in operations with Zcash, unveiling its first client version compatible with its new Sapling network upgrade – which purportedly will see the privacy coin execute transactions in seconds to and from shielded addresses.
Bitcoin isn’t doing well, as of late. The father of crypto has crashed repeatedly over the past several days and now stands at a measly $4,400. This is miles below its not-so-stellar price of $6,300, which it was trading at for most of last week.
A new report states that bitcoin has fallen by roughly 75 percent from its previous all-time high of $19,000+ in December 2017. These were what some refer to as the “glory days” of bitcoin. Exchanges like Coinbase were experiencing huge bursts in popularity and adding hundreds of thousands of users in single weeks. Bitcoin appeared unstoppable, and everybody rushed to get in on the action.
But 2018 has been a lackluster, downright ugly year for bitcoin. The currency began falling last January, and 11 months later, we’re no better off.
Many things have contributed to the subsequent falls, including crypto ad bans on several of the world’s largest internet and social media companies, and the Securities and Exchange Commission’s (SEC’s) crackdown on initial coin offerings (ICOs) and related fundraising ventures.
But things might not be as bad as they feel right now…
The Fork That Doomed Us All
However, the blame game for bitcoin’s latest drop is focused on the bitcoin cash hard fork that took place last Thursday. Bitcoin cash has undergone hard forks before; in fact, BCH was the product of a bitcoin fork that occurred in 2017. For the most part, every fork up to this point has gone by uncontested, but this occurrence marks a sudden change in most industry leaders’ attitudes.
Joshua Frank – co-founder of the cryptocurrency analytics platform TheTIE.io – spoke ill of the event, and says sentiment regarding the recent fork is largely negative:
“Interestingly, we saw the long-term sentiment of bitcoin drop negative on November 7, and the sentiment has continued to fall following bitcoin’s price plunge on November 14. It does not look like there has been any positive recovery in longer-term sentiment since then. The bitcoin cash fork and the infighting within the crypto community has had a negative impact on the price. The conversation around the fork is negative, which is an overhang on the overall market. We see conversations around the BCH fork making their way into discussions around all cryptos across the board.”
Stay Positive, People
Regardless of everything, there are some analysts that refuse to believe bitcoin is dead and the price will rise once more. They claim that the recent drop is merely a recovery from 2017 that will set bitcoin straight once and for all.
Ever-present bitcoin bull Tom Lee of Fundstrat fame comments:
“Global markets have seen liquidity dry up, and bitcoin is not necessarily seen as a value asset, so as growth stocks, tech and FAANG [Facebook, Amazon, Apple, Netflix and Google] come under pressure, it’s going to hurt bitcoin. The downturn in FAANG is hurting those who own bitcoin, but the next wave of adoption will be institutional. There is a crossover happening. This is just an awkward transition. Once we have that, institutions will feel a lot more comfortable making bets [on bitcoin].”
Adam Back, co-founder of the blockchain firm Blockstream, commented on Twitter this week, “Personally I consider $250k-$500k/BTC plausible in the years ahead”.
That's the real flippening @bobbyclee! personally I consider $250k-$500k/BTC plausible in the years ahead, from the digital gold, censor-resistent competitor to physical gold, and internet native digital money. https://t.co/hSq2aHvg8z
— Adam Back (@adam3us) November 20, 2018
Things Will Work Themselves Out
Similar sentiment is offered by Mati Greenspan, a notable markets analyst with the digital exchangeeToro. In a recent interview, Greenspan suggests that cryptocurrency is still at the start of a long (and likely successful) journey. He states that volatility is still very much alive, but that people shouldn’t worry as the recent drops are only temporary while the market balances itself out for bigger and better things:
“What we’re seeing now are the after effects of the unprecedented rise of bitcoin and other crypto assets in 2017. This year is simply a retracement of that. The same is happening in broader markets as well where tech stocks, for example, are following a similar pattern. As with all markets, if prices reach levels that are higher than can be justified, they need to pull back. These cycles can sometimes be accentuated in the crypto market due to the riskier nature of this nascent industry. In the same way previous cycles have not signaled the end for broader markets, these price movements don’t signal the end for crypto assets.”
The controversy surrounding the Bitcoin Cash (BCH) hard fork is increasingly engulfing cryptocurrency exchange Kraken as the altcoin’s proponents take aim at its treatment of its two forks.
DEPOSITS, WITHDRAWALS AND UP TO 30 CONFIRMATIONS
After BCH split into ABC and SV forks, Kraken opted to keep the BCH ticker to describe ABC, crediting users with SV tokens while describing it as an “extremely high risk investment.”
SV has suffered a tumultuous first few days as a standalone fork of BCH, a blockchain reorganization sparking claims of overt centralization from some of Bitcoin’s best-known names.
Since trading opened on Kraken, SV tokens have changed hands for less than $30. Deposits and withdrawals begin today, subject to 15 confirmations for ABC and 30 for SV.
Deposits and withdrawals are now enabled for Bitcoin Cash (BCH) and Bitcoin SV (BSV). 15 & 30 confirms, respectively. Sending a non-replay protected BCH or BSV tx to a Kraken deposit address will result in a credit of BCH *and* BSV if the tx transferred both.
— Kraken Exchange (@krakenfx) November 22, 2018
AYRE: KRAKEN ‘MENTIONED’ IN SEC ‘INVESTIGATIONS’
Retaliating on social media, SV proponent Calvin Ayre hit back at Kraken’s decision to use the BCH ticker for rival chain ABC, further claiming that both entities were part of unnamed legal proceedings by US regulators.
“(My) current prediction is that ABC chain will collapse and BCH will remain Satoshi Vision as the most likely outcome of the hash war,” he wrote on Twitter November 21.
Criminal and SEC investigations are under way in the US based on docs leaked to us. Kraken named also.
Ayre did not provide evidence for the accusations, which he’s promising to release “next week.”
While Kraken has yet to publicly react, Ayre’s words could well end up buried beneath the mountain of rhetoric, which has emerged on social media from all parties in the BCH debacle over the past week.
I will release the private docs I received next week at the conference once they become public. Amaury, Roger, Jihan, Jess Powell, Kraken and others named. Their life is going to get more exciting. Market manipulation and more.
— Calvin Ayre (@CalvinAyre) November 21, 2018
SV sources have been particularly vocal, nChain chief scientist and self-proclaimed Satoshi Nakamoto Craig Wright accusing ABC’s lead figures of myriad transgressions.
“You are my enemy,” he allegedly owner Roger Ver in an email before the hard-fork.
BCH recorded the biggest drop of all the top twenty cryptocurrencies by market cap over the past 24 hours at around 7.5 percent, data from Coinmarketcap shows.
The token jumped nearly 7% on Thursday afternoon UTC as Bithumb opened a Korean won market for the BAT.
Bitex has officially launched as the United Arab Emirates’ (UAE) newest digital asset exchange. The Dubai-based trading platform will initially support bitcoin core, bitcoin cash, ethereum and litecoin. Bitex also announced the launch of a cryptocurrency wallet that offers an additional cash deposit service, according to media reports.
Changes in Regulation Spur Development
Monark Modi, chief executive officer of Bitex UAE, said the exchange will provide multiple payment options including bank transfer and credit or debit cards. The cash deposit service allows users to schedule a cash pickup, with funds immediately deposited in their accounts and available for trading within 24 hours, he explained.
“Recent changes in UAE regulation have made today the perfect time to seize the opportunity to introduce a new, secure, professional trading platform,” Modi is quoted as saying by the Bahrain news portal Trade Arabia on Nov. 22. He said the UAE government has demonstrated progressive leadership with its Blockchain Strategy 2021, which has “laid the groundwork for digital assets becoming more accessible” in the Gulf state.
UAE residents have been calling out for more options to securely buy and sell digital currencies … while residents have been able to use international trading platforms for some time, having access to a local exchange is far more convenient. Trading via a UAE-based company allows customers to easily deposit local currency rather than first having to exchange it for a more widely-accepted currency.
Crypto and Blockchain Hotspot
In June, the Financial Services Regulatory Authority, regulator of Abu Dhabi Global Market, released a framework for regulating crypto assets and their attendant activities. The framework addresses the potential risks associated with cryptocurrency transactions, including alleged financial crime, money laundering, consumer protection and technology governance. The guidelines have been viewed as testament to the UAE’s progressive attitude towards blockchain and virtual currency use and adoption.
According to Trade Arabia, Bitex UAE has said it uses a multi-signature HD wallet to store cryptocurrency. A three-key system increases security, the company claimed, requiring two of the three keys in order to access funds. “The first key is securely stored by Bitex UAE, the second is stored with Bitex UAE’s wallet partner and the third is a recovery key,” it said separately on its Linkedin page.
The UAE is developing into a hotspot for blockchain and cryptocurrency adoption. Its Blockchain Strategy “aims to position Dubai as a leader in this global technology.” The country has also announced plans to operate its own cryptocurrency by the year 2020.
Source: News Bitcoin
Wex, the digital asset trading platform that inherited the now-defunct BTC-e exchange, has lost its wex.nz domain. According to New Zealand’s Domain Name Commission (DNC), the internet address was registered with fake contact details. Wex users have complained that they are unable to withdraw their funds from the platform.
Domain Registry Takes Down Wex Sites
Other than wex.nz, the DNC has suspended a number of domain names — wexbet.nz, wexcash.nz, wexcoin.nz, wxcash.nz and wxcoin.nz — that lead to the same cryptocurrency website. The suspensions came after the regulator conducted inquiries into the accuracy of the registration details that were provided for each of the domains, following numerous complaints.
In an announcement published this past Monday, Nov. 19, the commission noted that the individual who registered the domain names failed to verify their contact information. The organization said that valid contact details are a prerequisite for all holders of .nz domain names. It further explained:
The Domain Name Commission has suspended the domain names for fake registration details in accordance with enforcing data validation measures under the .nz Principles and Responsibilities policy. The Commission wants .nz to be a safe, trusted and secure domain name space which is supported by its data validation process.
New Zealand’s domain registry has urged any individuals or entities that have been affected by the cancellation of the Wex domains to contact law enforcement agencies if they suspect fraudulent or criminal activity. They can also file reports with Netsafe, an independent body focused on providing a safe online environment for internet users in the country.
1 BTC for $8,500
Despite the setback, the cryptocurrency exchange has come back online again and is now hosted on a new domain, Russian news outlet Bitsmedia has reported. “Please use our mirror wex.link,” the trading platform posted on its official Twitter page. That’s one of only several updates it has tweeted in recent months, including a couple of warnings about fake sites with similar addresses, such as wex.ac and wex.mn, as well as a message about the listing of monero (XMR) from August and some updates about maintenance-related interruptions in July.
“Wow! At least you tweeted something after three months,” wrote one person in response to Wex’s tweet about its new web address. Indeed, its administrators have been pretty quiet since the summer, when many users started complaining that they were unable to withdraw funds from the platform. Only a few coins, such as XMR and ZEC, are now available for withdrawals, but their liquidity is extremely low.
A number of complaints have been filed against the exchange with the Russian police since August. Users who have lost money have created a website, wex-scam.com, as well as a couple of Telegram channels, to support each other and share the latest available information. According to a post from Oct. 21, 35 individuals have already filed requests with the Russian Ministry of Internal Affairs to initiate a criminal investigation against Wex.
Customers had previously raised the alarm about the cryptocurrency trading platform’s high exchange rates. At the time of writing, the buy price for 1 BTC on its website was $8,498, which suggests that the exchange was probably not operating. On the other hand, the recent announcement about its new domain, shortly after the suspension of wex.nz, indicates that its administrators are still active.
The BTC-e Saga
Wex is the successor to BTC-e, Russia’s oldest cryptocurrency exchange. It was established in 2011 and remained a leading trading platform for the Russian-speaking crypto community until last summer. BTC-e then went offline following the arrest of its suspected co-owner, Alexander Vinnik, in Greece in July 2017.
Vinnik has been accused of a number of crimes by U.S. prosecutors. They allege that he laundered $4 billion through the exchange, including bitcoins that were stolen in the Mt Gox hack. Authorities in the U.S., the Russian Federation and France have requested his extradition.
BTC-e has always denied any connection with Vinnik. The platform was relaunched under the Wex name in mid-September 2017. The new company, which is registered in Singapore, has also denied having any links with the owners of the operator of BTC-e, Canton Business Corp., an entity that is based in the Seychelles.
However, Wex has agreed to compensate BTC-e clients who have suffered losses. Dmitriy Vasiliev, Wex’s owner and director, has reportedly negotiated the purchase of BTC-e, its infrastructure and remaining assets. The new platform has kept the old interface and even the original accounts of BTC-e users.
OriginTrail, the blockchain protocol dealing with global supply chain, are making strides this quarter. A mere 4 months after the release of Apollo, the first beta of their testnet protocol, OriginTrail has announced the upcoming release of their mainnet Vostok. Named after the first manned space flight of famous cosmonaut Yuri Gagarin, Vostok will launch on December 7, 2018.
A lot of work has gone into getting the mainnet net ready to launch, and OriginTrail also announced many key upgrades to their protocol.
Mainnet Development Stages
OriginTrail’s mainnet will be rolled out in stages, of which Vostok is only the first.
Vostok will see OriginTrail being put to use for the first time in a real supply chain market. They will finetune their protocol by unrolling a bug bounty and audit processes, and overtime they will introduce litigation mechanisms.
Once bugs and glitches have been dealt with and litigation mechanisms are all fully functional, OriginTrail will move on to its next stage — Freedom — which will be launched in Q1 2019.
Looking forward, the Gemini stage which comes next will have better privacy and more complex data layers, and allow for integration with other platforms. The Pioneer stage following that will have more data tokenization capabilities.
For more details on development stages and future milestones, check out OriginTrail’s roadmap.
Bidding Mechanism Overhaul
The bidding mechanism which negotiates data replication in the OriginTrail system has been given an upgrade.
The replicating process has been made atomic, meaning steep reduction of costs as well as increased scalability. Essentially, this means that Data Holder nodes communicate with Data Creator nodes off-chain, meaning no blockchain transactions are made during replication.
During the process, various Data Holder nodes are then randomly selected to become Vault nodes to store data for a set amount of time, until it needs to be retrieved.
The staking mechanism for nodes to participate in the mainnet has also been upgraded, in that each node is required to stake 1,000 TRAC to join Vostok.
Node applications for the Vostok mainnet are currently open. You can submit an application here. Keep an eye on the OriginTrail documentation archive in the coming weeks for more details on the bidding mechanism.
ERC-725 Identity Standard
OriginTrail has also announced their support for ERC-725, which will streamline onboarding companies on the blockchain. It will also simplify key management and let one identity represent multiple wallets and nodes.
This will also result in better interoperability with other Ethereum-based blockchain platforms using ERC-725, which will expand the reach of the OriginTrail ecosystem.
Node Resilience and Data Layer
The development team has implemented the final pattern logic to their code, which means that nodes will now be more resilient to unforeseen problems, such as delays or failures in blockchain transactions and node resets.
Furthermore, the team was able to collect a lot of data throughout the beta program, allowing them to resolve various operational issues. They have used this feedback to simplify the data structure in the mainnet version, and improved node and network identifier lookups.
Source: Invest In Blockchain
The Norwegian government has scrapped a power subsidy currently granted to bitcoin miners.
According to a report from local news outlet Aftenposten, in its state budget, the government said that cryptocurrency miners in the country will have to pay normal electricity tax from the New Year.
At the moment, larger mining firms receive the same electricity tax discount as other power-intensive industries in the country. Those with a capacity of more than 0.5 megawatts are charged only 0.48 øre ($0.00056) per kilowatt hour instead of the standard rate of 16.58 øre ($0.019). An øre is 100th of a Norwegian krone.
That means that eligible miners have been paying just 2.8 percent of the standard rate to power their rigs.
“Norway can not continue to provide huge tax incentives for the most dirty form of cryptographic output like bitcoin. It requires a lot of energy and generates large greenhouse gas emissions globally,” Norwegian parliamentary representative Lars Haltbrekken said in the report.
Now with an end to the subsidy, bitcoin miners will have to shell out higher taxes, which is likely to reduce their net profits at a time when low crypto prices are already putting pressure on the industry.
Just this Monday, U.S.-based bitcoin mining firm Giga Watt declared bankruptcy, revealing in court documents that it still owes its biggest 20 unsecured creditors nearly $7 million. That number includes claims to hundreds of thousands of dollars by two power providers to the firm.
The suggestion to remove Norway’s subsidy was reportedly proposed by the Norwegian Tax Administration, an agency under the authority of the country’s Ministry of Finance. That proposal has now been approved in the state budget and will be effective from January 2019.
Roger Schjerva, chief economist of tech industry interest body, ICT Norway, told Aftenposten:
“This is shocking. Budgets have changed framework conditions without discussion, consultation or dialogue with the industry,”
Removing the subsidy will push crypto miners to Sweden and Denmark, he argued, adding that the country mustn’t “just say no to income and work in many municipalities in Norway.”
Editor’s note: Quotes have been informally translated from Norwegian.
Sporting Clube de Portugal (SCP), a popular Portuguese football club, is reportedly considering launching an initial coin offering (ICO) as an alternative way to raise funds, at a time in which it’s struggling to raise them through a bond issue.
According to local news outlet Dinheiro Vivo, the club’s vice-president Francisco Salgado Zenha claimed the organization is currently pondering the option, although there’s still “nothing concrete” on the subject. He was quoted as saying:
“We are looking closely at an ICO. We’re having meetings about it. There is a great value potential in the Sporting brand.”
The manager then emphasized that the club’s goal would be to “take advantage of this new world,” referring to the cryptocurrency ecosystem. The move comes as the club is completing a bond issue in which it’s offering investors a 5.25% gross annual interest rate to raise €30 million ($34.2 million).
Sporting currently needs the funds as it has to repay investors for another bond issue that’s maturing on November 26. While the club managed to see subscription orders soar after it got staff to promote the issue, it ended up raising €26 million ($29.6 million), falling short of its target.
Often, cryptocurrencies issued by organizations like Sporting can then be used to buy products or services at a discount, although the club hasn’t yet revealed what it may be planning. The country’s Securities Market Commission (CMVM) has asked organizations looking to issue ICOs to clarify “prior to any emission, the judicial nature of the tokens being issued.”
The regulator’s stance is an improvement, as last year it was keeping a close eye on what it deemed the “bitcoin euphoria” that was sweeping Portugal, by supervising investment banks and brokerage firms who were selling crypto-related products.
Sporting itself has notably revealed that if it fails to raise the funds it needs through bond issues and, potentially, an ICO, its “strategic decisions” may be hindered, and may even have to sell players.
It’s notably not the first football club planning to launch its own cryptocurrency through an ICO. Brazilian football club Avaí has entertained the idea of launching its own ICO to raise $20 million, just days after French soccer giant Paris Saint-Germain announced its own cryptocurrency.
Two cash-strapped Premier League football clubs, Newcastle United and Cardiff City, have also revealed they were in talks with SportyCo, a decentralized sports investment & funding platform, to potentially launch their own cryptos. SportyCo has also partnered with Avaí to launch its tokens.
Ramit Sethi, author of the bestselling “I Will Teach You to Be Rich” has taken a swipe at crypto hodlers, suggesting that their investment strategy is fundamentally faulty because it is based on emotional identity instead of rational analysis.
In his opinion, the reason many crypto investors insist on suffering through bad market periods is because to them, the act of investing in crypto assets is no longer the simple investment decision that it should be, but is rather a part of their identity, which makes them double down on losing positions instead of making the rational decision to exit the market.
Crypto Investment and Politics – An Unlikely Parallel
2018 has been an extremely difficult year for crypto holders and short term investors looking for profits, with the bear market continuing to exert sustained downward pressure on asset prices despite optimistic predictions from a few analysts.
According to Sethi, the tendency to double down on a particular decision in the face of evidence pointing otherwise is aptly demonstrated by a large number of cryptocurrency investors who have not actually made any money from investing in crypto assets and in fact have very little real hope of doing so, but doggedly insist on holding their losing investment positions.
Specifically referencing a popular crypto market theory about ‘buying the dip‘ or investing in a market that does not look like recovering anytime soon, Sethi stated that this is a telltale sign of a situation where decision making has been divorced from rational investment practice, and is now purely emotional, based on crypto’s status as a part of the investor’s individual identity.
Such behaviour, Sethi said, is analogous to the way many people often publicly double down on their support for a politician when bad behaviour on his or her part is exposed.
Societal Messaging and Investment Decision Making
Going further, Sethi stated that the development of emotional identities based on wrong or flawed information and thought patterns is a near-ubiquitous occurrence within human society, particularly on the subject of money and investment.
Giving an example of how societal messaging can lead to irrational investment decisions, Sethi pictured the following scenario juxtaposing societal messaging with the rational decision should be:
“MONEY MESSAGE: “The best way to save money is to cut spending.”
SOLUTION: “There’s a limit to how much I can save, but there’s no limit to how much I can earn.”
MONEY MESSAGE: “This cryptocurrency / stock is the hottest investment to get rich quick!”
SOLUTION: “There’s no such thing as a get rich quick scheme. The only way to be rich is to scale up my earnings and invest for the long run.” “
In Sethi’s words, the presence of such powerful but silent messages in most people’s thinking paradigms makes it such that they live their entire lives abiding by ‘rules’ set for them by societal pressure, without even being aware of their existence. Over time he said, such adherence to unspoken societal rules can become dangerous by convincing people that they need to carry out certain behaviours because they must, and not because they should, or even necessarily want to.
To solve this problem he said, crypto investors and other groups of people should carry out regular self-analysis so as to audit the messages that have come to form the core of their identity. In so doing he said, it would be possible to avoid getting caught in the trap of becoming a “crypto person,” comparable in rationality to being a Republican, Democrat or Libertarian, as against maintaining an independent identity.
Summing up his thoughts on the matter he said:
“I don’t mind identities. I have a few of my own: Personal finance guy, Gym rat, Hot sauce fan. But be extremely cautious about the messages you tell yourself, because once you internalize it, you’ll do anything to justify your choices.”
The Colorado State Department of Regulatory Agencies (DORA) has taken action against four more ICOs, ordering them to immediately cease and desist from carrying out all activities in violation of state finance laws.
In a November 20 press release posted on the regulator’s website, it was revealed that with these four new additions, Colorado Securities Commissioner Gerald Rome has now signed orders mandating the cessation of eighteen ICOs in the state, with at least two more orders pending.
“ICO Task Force” convened in May by commissioner Rome within the Division of Securities under the aegis of DORA targeted three cryptocurrency companies namely Bionic Coin, Sybrelabs and Global Pay Net, eventually leading to similar regulatory action against them.
The four ICOs named in the order are Global Pay Net, Cred, CrowdShare Mining and CyberSmart Coin Invest. Interestingly, Global Pay Net, which purportedly sells “GLPN Coins” to investors was mentioned in the previous DORA regulatory action from August. Like in its initial mention, the company was cited for inducing investors to market the scam and making unsupported promises to investors including a promise of up to 80 percent of the company’s profits. It also made false claims including referencing professionals purportedly involved in its operations who have denied any knowledge of it, and an SEC filing claim which cannot be verified as the phone number attached to the 2011 filing is disconnected.
The second entity listed is known as Cred or Credits LLC, using a website https://credits.energy to promote a scam that purports to be a tokenised mobile mining app supporting green energy. Based on these claims, the company markets a supposed ICO for its cryptocurrency known as “Cred” (CX). Apart from promising investors outsized future returns on their investment, it also makes a direct claim that CX tokens will have guaranteed tangible value at some point in the future, which makes it a security offering. Luke Ingraham, an individual listed as President and Director manages the security offering.
Speaking about the regulatory action, Commissioner Rome said:
“The sheer number of orders entered against ICOs should be a red flag to all investors that there is a real risk that the ICO you are considering is a fraud. Our investigations show that there are fraudsters who will simply create a fake ICO to steal investors’ money, or spoof a legitimate ICO to trick investors into wrongfully paying them.”
The other two entities listed are CrowdShare Mining, which operates an ICO for “CrowdShare Mining Coin (CSM) through the website https://crowdsharemining.org/#, and CyberSmart Coin Invest, which offers “CyberSmart Coin (CBST) through the website http://cybersmartcoin.com/default.aspx. Both scams use similar tactics, promising steady and unusually high returns ranging from 20 percent to 1000 percent through “secret” or specialist investment tactics.
The hash power war between Bitcoin Cash (BCH) and Bitcoin Cash SV (BCHSV) ended with a one-sided victory for BCH.
Prior to the hard fork on November 15, major cryptocurrency exchanges publicly expressed support towards the roadmap set forth by bitcoincash.org or ABC, the original Bitcoin Cash blockchain network.
Fast forward eight days, a growing number of leading cryptocurrency trading platforms have begun to officially adopt ABC as the original Bitcoin Cash network with the ticker BCH.
What Triggered Coinbase and Kraken to Support BCH?
Earlier this week, Coinbase, one of the most widely utilized fiat-to-crypto exchanges in the global market, released an official statement declaring that ABC will retain the ticker BCH.
The company stated that the higher hashrate and longer proof-of-work chain were amongst several other factors that led to the decision of Coinbase to provide the BCH ticker to the original Bitcoin Cash chain.
The Coinbase team said:
“Since the Bitcoin Cash fork on November 15, 2018, Coinbase has been closely monitoring the BCH network. We have observed consensus in the community that the BCH ABC chain will retain the designation of Bitcoin Cash (BCH). Coinbase will also adopt this designation for BCH. Coinbase has made this decision based on a number of factors including the fact that ABC has a higher hashrate and a longer proof-of-work chain.”
In the weeks to come, Coinbase users will be able to withdraw BCHSV that was credited to BCH holders prior to the fork, but the firm did not express any intent to list BCHSV nor allow investors to trade the newly created asset.
“Our current intention is to support withdrawal services for the BCH SV chain so that our customers may withdraw funds at a future date. We anticipate this development work will take at least a few weeks, but may take longer” the team added.
Jesse Powell, the CEO of Kraken, another major cryptocurrency exchange based in the U.S., recently criticized the operation of the Bitcoin Cash SV camp led by Calvin Ayre, Craig Steven Wright, and Coingeek, who have threatened developers and miners throughout the past several weeks.
On November 21, BCHSV experienced a reorganization of two blocks and Coingeek is suspected to be behind the initiative. As Cornell professor Emin Gun Sirer explained, the self-reorganization of blocks demonstrated a lack of hash power, decentralization, and well-designed system on BCHSV.
“Never had anything against Calvin Ayre but this approach is anathema to the community you hope to have adopt your technology. The merits of BSV are overshadowed by the alienating threats of a few grandiose personalities. Longer chain != adoption. Victory may be pyrrhic.”
Personalities Behind SV are Hurting the Chain
Even in the aftermath of the hash power war, representatives of the Bitcoin Cash SV camp are continuing to push threats against the Bitcoin Cash community.
On November 23, Calvin Ayre, a billionaire casino mogul behind SV, encouraged investors of Kraken to stay away from the exchange for “manipulating” the crypto market by providing Bitcoin Cash with the BCH ticker.
Continuous threats from the SV camp could lead to more exchanges acknowledging the original Bitcoin Cash chain as BCH, which could have a negative impact on the long-term growth trend of the asset.
Circle has announced that it has contracted an independent accounting firm, Grant Thornton LLP, to verify through attestation reports the dollar reserves thaCirclece maintains to back the USDC token. Circle joins Paxos Standard in doing this on a monthly basis.
According to the findings of Grant Thornton, Circle actually has about $4,000 more than it has issued in tokens in its accounts backing USDC. From their post:
The report states that as of October 31, 2018 at 11:59 PM UTC:
- USD Coin (“USDC”) tokens issued and outstanding = 127,408,827 USDC
- US Dollars held in custody accounts = $127,412,240.89
Grant Thornton notes that they have conducted their review in accordance with standards of accounting. From the report itself:
Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the Reserve Account Information in the accompanying Reserve Account Report is correctly stated, based on the criteria set forth in the Reserve Account Report, in all material respects. An examination involves performing procedures to obtain evidence about the Reserve Account Information. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material misstatement of the Reserve Account Information, whether due to fraud or error.
In making an assessment of the risks of material misstatement, we considered and obtained an understanding of internal control relevant to the preparation of, and the Reserve Account Information in, the accompanying Reserve Account Report in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of such internal control. Accordingly, no such opinion is expressed. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion.
They further conclude that information provided by Circle is true and correct, saying:
In our opinion, the Reserve Account Information in the accompanying Reserve Account Report as of October 31, 2018 at 11:59 PM UTC is correctly stated, based on the criteria set forth in the Reserve Account Report, in all material respects.
Paxos Standard and USDC conduct monthly attestation reports. Gemini Dollar also does this on a regular basis, its most recent report having been published on October 31st. Likely they will conduct them monthly as well.
Such assessments are important because a third-party accounting firm would be the first to throw up red flags if any were to be thrown up. Investors want to be sure that when they hold a stablecoin, it is worth what it’s supposed to be worth rather than nothing as a result of malfeasance at the behest of the issuer. It is a sign of health that the three new stablecoins are setting this standard, and moving forward it should be expected that all stablecoins will adhere to it.
Over the past 24 hours, the crypto market has lost about $4 billion of its valuation against the US dollar.
Major cryptocurrencies like Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), and Ripple (XRP) extended their losses by 2 to 8 percent. The price of BCH dropped from $236 to $215, by nearly nine percent.
In the last two to three hours, BCH, BTC, ETH, and XRP demonstrated a slight recovery in both volume and price, but the momentum of the entire market remains a concern to short-term traders.
Some Tokens Recording Unexpectedly Large Gains
While large market cap digital assets recorded minor losses, small market cryptocurrencies and tokens demonstrated gains in the range of 5 to 20 percent.
Basic Attention Token (BAT), the native cryptocurrency of Brave Browser, increased from $0.16 to $0.185, by around 16.5 percent. Since the listing of BAT by Coinbase, the third largest crypto-to-fiat exchange in the world behind Bithumb and Bitfinex, the price of BAT dropped by more than 56 percent.
However, in comparison to many ERC20 tokens and consideration of the significant price surge BAT experienced in the build-up to the Coinbase listing, BAT has performed relatively well against both Bitcoin and the US dollar.
Bitcoin also fell by 35 percent in the past week, as the crypto market experienced a wipeout of over $60 billion.
Two major factors are expected to have contributed to the recent short-term corrective rally of tokens: extremely oversold conditions for small market cap tokens and the U.S. Securities and Exchange Commission (SEC)’s caution towards initial coin offering (ICO) projects.
Every digital asset listed by Coinbase, which includes 0x (ZRX) and Brave Attention Token (BAT), meets the criteria of the SEC of a non-security. In May, when Coinbase initially released its plans to integrate Zcash (ZEC), Stellar (XLM), Cardano (ADA), ZRX, and BAT, the company emphasized that it will only pursue its plans if it can be certain that the tokens comply with existing regulations enforced by the SEC.
In the months to come, as SEC’s Enforcement Division co-director Stephanie Avakian said at the Investment Adviser Association Conference in Washington, D.C., the SEC plans to crackdown on dozens of ICOs acknowledged by securities by the commission.
“We are very active, and I would just expect to see more and more.”
A handful of tokens could perform well against the US dollar, but generally, most tokens in the market are expected to drop substantially in price.
State of the Market
The cryptocurrency market is demonstrating oversold conditions following a steep decline in valuation. If Bitcoin can maintain strength in the low range of $4,000 to $4,500, it could lead to a several-month-long consolidation period.
However, if BTC falls below the $4,000 mark, which traders fear, then a short-term turn around for the dominant cryptocurrency by the year’s end will become increasingly unlikely.
With tokens on a downtrend, apart from several projects like BAT and ZRX that have been listed by Coinbase, the rest of the market could continue to extend its losses in the upcoming days.
Despite its steady growth in the past decade, Bitcoin remains a work in progress and is facing an uncertain future.
Bitcoin (BTC) has existed for nearly a decade, but a bright future is not guaranteed. After a phenomenal bull run at the end of 2017, BTC prices went in a downward spiral, which cost many enthusiastic buyers dearly.
While the existence of Bitcoin was never guaranteed, it has proved quite resilient. However, using the cryptocurrency as a mainstream means of payment is yet to become a smooth experience. After the protracted bear market in 2018, Bitcoin has a set of difficulties to wrestle with in the coming years.
Miners losing steam: Since 2013, mining Bitcoin has grown immensely. In part, the enthusiasm was stoked by expectations for a rise in BTC prices and much higher earnings from sales at a future date.
Bitcoin’s hashrate has fallen to a three-week low and continues to drop, going as low as 40 EH/s, or 30% down from its recent peak. This is partly due to the “hash wars,” a period of competitive mining for Bitcoin Cash (BCH), but there may be a wider trend of shutting down mining farms. Adding to the dry season is the situation in China, where hydroelectric power would be scarcer, and the Bitcoin ice age may also include a freeze on mining activity.
Attacks and hacks: BTC prices remain stagnant but still relatively lucrative, so the incentive to attack, hack, or scam may return to the network. For now, it is extremely difficult to double-spend there, but with miners moving away, the mining power imbalance would be felt more strongly.
Additionally, exchange hacks, exit scams, and loss of funds may shake the reputation of Bitcoin. Since the best selling point of a cryptocurrency is the security aspect, exchange breaches hurt the image of a coin and the sector as a whole. The bear market may cause further capitulation events, and hefty BTC losses are a threat.
KYC and regulatory scrutiny: Bitcoin is pseudonymous, not anonymous. Tracking whale wallets and fund movements is always possible, and as users become more aware of the limitations, the crypto asset may be overlooked in favor of anonymous coins. At the same time, altcoins are not seen as secure enough.
All-encompassing scrutiny of Bitcoin’s network is good for discouraging bad actors from using it. However, it could also lead to an attempt to dump the coins and escape scrutiny. The more Bitcoin faces financial regulation, the less valuable it becomes.
Cryptocurrency fights and wars: The debates around SegWit2x did not break Bitcoin. However, the Bitcoin Cash hash wars triggered one of the steepest price drops this year and undermined the sector once again, causing a new wave of capitulation from traders or retail investors.
Bitcoin’s protocol is taking a conservative road, but there are still many weaknesses to be addressed. The network has survived numerous forks, but the fights and wars are creating confusion for newcomers and facilitating potential scams and losses.
A global recession: There are factors beyond the crypto community which may affect Bitcoin usage or investment. The prices and investment opportunities were spurred by a decade of robust economic growth and high liquidity. Hot money went everywhere – into the housing market, tech, stocks, and also cryptocurrency – but the period of easy investment may be over.
With no upside to Bitcoin prices and little excess cash to go around, the cryptocurrency market, projects, and the entire ecosystem may dry up and cast doubt on Bitcoin as a new and viable asset class.
Bitcoin and several other projects may survive these factors and even come out stronger, but the challenges may put pressure on cryptocurrencies in the coming years and slow down mass adoption.
Tobacconists in France are reportedly going to be selling bitcoin to the public from New Year.
According to France-based radio station Europe 1, tobacco retailers will be offering bitcoin vouchers in denominations of 50, 100 or 250 euros (around $57, $114 or $285) from Jan. 1, 2019.
Local crypto startup Keplerk is said to have signed a deal with a cash register software provider to facilitate the scheme. Keplerk will allow customers to convert their vouchers into bitcoin and store it in wallets on its platform.
Initially, some 3,000–4,000 tobacco shops will be selling the vouchers, with others likely to be added later on, the report states.
“Tobacco shop owners are the best channel as they are trusted by customers and they are used to sell vouchers such as credit for mobile phones,” Adil Zakhar, Keplerk’s director for strategy and development, was quoted as saying by Reuters.
Keplerk will charge 7 percent commission on transactions to fund the operation, the news source adds.
The French central bank issued a statement Wednesday, denying some reports that it has signed no agreement with tobacconists to allow the sale of bitcoin. It further warned that cryptocurrencies are “purely speculative and are not currencies” and that those who wish to invest in bitcoin or any other cryptocurrency “do it entirely at their own risk.”
There are 25,000 tobacco outlets across France, according to the tobacconist federation’s website, potentially making bitcoin widely available if the scheme is a success.
The news comes as bitcoin is experiencing a significant downturn in prices. The oldest and largest cryptocurrency by market value, which peaked at nearly $20,000 last December, is trading around $4,500 currently after losing around $1,000 in less than a week.
The government of Singapore will offer financial incentives in order to grow the blockchain ecosystem in the country.
According to The Business Times, the Infocomm Media Development Authority (IMDA) which falls under Singapore’s Ministry of Communications and Information will offer seed funding to players in the media and ICT sector. This is with a view of incentivizing them to develop platforms which link special interest groups in the blockchain space, solution providers as well as other related groups.
In order to obtain seed funding from the IMDA, the platforms to be developed must meet certain criteria and this includes a capacity to connect with other blockchain communities spread across the globe.
Expanding Beyond Finance
Per the IMDA, blockchain adoption has largely been restricted to the financial sector and there are few, if any, large-scale successful cases that exist outside banking and insurance. In IMDA’s view, this has hampered the adoption of blockchain in other sectors due to lack of interoperability.
The IMDA said in a statement:
“This has resulted in the industry showing signs of siloed, specialised blockchain solutions rather than interoperable network blockchains, which would deliver the most benefit to users.”
To reach its goal of becoming a smart nation, Singapore has come up with various other initiatives aimed at boosting the country’s blockchain ecosystem. Earlier in the year, the IMDA launched the Blockchain Challenge whose goal is to incentivize firms to develop pioneering solutions that go beyond financial applications using distributed ledger technology.
Through the Blockchain Challenge, participating firms are required to come up with either Proofs-of-concept or Minimum Viable Products that solve particular problems.
Three months ago, a fund to assist tech firms in sectors such as blockchain was launched jointly by the governments of Singapore and China. Known as the China-Singapore ICM Joint Innovation Development Fund, the sectors that the initiative sought to target were in ICT and Media and hence the initials ICM.
Other pro-blockchain initiatives undertaken by Singapore include a move by the Intellectual Property Office of Singapore (IPOS) to grant firms in the fintech space including blockchain companies special treatment when awarding patents. Rather than having these companies wait the usual two years, the IPOS announced in April that the waiting period would be cut to six months,
According to the CEO of IPOS, Daren Tang, this would serve to assist Singaporean fintech firms to compete globally:
“By significantly reducing the time needed for grant of a fintech patent, our innovative enterprises will be able to compete effectively through their intellectual property and use these intellectual assets to scale up and enter the world’s market.”
On Nov. 19th, 2018, IBM and Columbia University announced the introduction of two new blockchain startup accelerators as critical components of their center for research, education, and innovation in blockchain technology and data transparency.
IBM Network and Columbia Launch to accelerate industry adoption
The joint venture, part of the Columbia-IBM Center for Blockchain and Data Transparency, will provide 20 entrepreneurs and blockchain network founders worldwide with access to the assets, knowledge, and support they need to build sustainable blockchain businesses and enterprise-grade blockchain networks.
IBM’s Network Blockchain Accelerator will expedite the global development of ten later-stage growth companies, and focus on building out an enterprise-grade business network and client base for their blockchain solution.
According to David Post, Managing Director of IBM Blockchain Accelerator, “The possibilities presented by blockchain technology are seemingly endless, and we see strong dedication by technical talent to build game-changing applications.” He believes that adoption is inevitable and “what is also needed to truly bring about this sea change is the right technology and expertise which is why IBM is working with Columbia to help give these early- and mid-stage founders a way to build enterprise-grade networks that can move blockchain innovation forward.”
In contrast, the Columbia Blockchain Launch Accelerator is intended to provide ten pre-seed, idea-stage companies with the necessary expertise and tools on how to build a blockchain startup, as long as it is in affiliation with the Columbia or any NYC-based University.
Satish Rao, Executive Director of the Columbia Blockchain Launch Accelerator, expressed confidence that “Early- and late-stage teams will undoubtedly benefit from IBM’s technology resources, expertise and established network coupled with Columbia’s ground-breaking research and talent in blockchain and data transparency, all while benefiting from rapidly growing NYC blockchain communities.”
Beyond Blockchain Tech: Sustainable Business Development
The two accelerator programs will empower companies and their teams with the aid of an expert network of business and technical support teams, workshops from IBM, as well as access to connections to the Columbia research community, student talent pools, and the IBM Cloud technology. As part of the accelerator plan, entrepreneurs will investigate what are the best practices for building a secure and sustainable blockchain network and ecosystem with the guidance of academic, technical, and business tutors from IBM, the Columbia University and other organizations.
Both programs are expected to launch in Q1 of 2019, while IBM Network has already opened nominations. Since they are invite-only, to apply, companies must look for the recommendation of investors, customers or IBM representatives. The Columbia Launch program is designed to help up to seed-funded startups.
Upon completion of the accelerator, IBM may decide to enter into strategic partnerships with the firms to assist them with establishing and/or scaling the concepts developed during the program.
- Ripple price is currently consolidating below the $0.4500 and $0.4600 resistances against the US dollar.
- There is a key contracting triangle formed with resistance at $0.4460 on the hourly chart of the XRP/USD pair (data source from Kraken).
- The pair is preparing for the next break either above $0.4500 or below $0.4280.
Ripple price is trading in a tight range against the US Dollar and Bitcoin. XRP/USD may soon make the next move either above $0.4500 or towards $0.4000.
Ripple Price Analysis
Yesterday, we discussed that ripple price may correct higher above $0.4200 and $0.4300 against the US Dollar. The XRP/USD pair did recover higher after trading as low as $0.4011. It moved above the $0.4180 resistance and traded with a positive bias. During the upside, it broke the 23.6% Fib retracement level of the recent decline from the $0.5180 high to $0.4011 low.
However, the price faced a strong resistance near the $0.4500 zone, which was a support earlier. There were a couple of attempts to trade above $0.4500 and $0.4520, but buyers failed. Later, the price started consolidating and it is currently trading above the $0.4260-80 support. There is also a key contracting triangle formed with resistance at $0.4460 on the hourly chart of the XRP/USD pair. A break above the triangle could push the price towards $0.4680 and the 100 hourly simple moving average. An intermediate resistance is the 50% Fib retracement level of the recent decline from the $0.5180 high to $0.4011 low at $0.4590.
Looking at the chart, ripple price seems to be preparing for the next break either above $0.4500 or below $0.4280. If there is a downside break, the price could trade below the $0.4250 and $0.4120 support levels. The main support is at $0.4000 and the key resistance is at $0.4500.
Looking at the technical indicators:
Hourly MACD – The MACD for XRP/USD is slowly moving in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for XRP/USD is just near the 50 level.
Major Support Level – $0.4280
Major Resistance Level – $0.4500
- Ethereum classic price declined towards the $5.00 support and recovered against the US dollar.
- There was a break above a key contracting triangle with resistance at $5.55 on the hourly chart of the ETC/USD pair (Data feed via Kraken).
- The pair is currently placed nicely above $5.40 and it could correct higher towards the $6.00 level.
Ethereum classic price is slowly recovering against the US Dollar and Bitcoin. ETC/USD is likely to climb towards the $6.00 or $6.25 levels in the near term.
Ethereum Classic Price Analysis
Recently, there were heavy declines in ETC price from the $7.40 swing high against the US dollar. The ETC/USD pair declined and broke the $6.20, $6.00 and $5.50 support levels. The decline was such that the price spiked below the $5.00 support and traded as low as $4.97. The price even settled below the $6.00 handle and the 100 hourly simple moving average.
Later, the price corrected higher from the $4.97 swing low and moved above the $5.00 and $5.20 level. The price gained traction above the 23.6% Fib retracement level of the last decline from the $7.40 high to $4.97 low. There was also a break above a key contracting triangle with resistance at $5.55 on the hourly chart of the ETC/USD pair. It has opened the doors for further upsides towards the $6.00 level. The next resistance is at $6.20 and the 50% Fib retracement level of the last decline from the $7.40 high to $4.97 low. Further above, the 100 hourly simple moving average is positioned near the $6.25 level.
The chart suggests that ETC price is placed nicely above the $5.40 and $5.20 support levels. Therefore, there are chances of an upside recovery towards $6.00 and $6.20. Any further gains will most likely face sellers near $6.80.
Hourly MACD – The MACD for ETC/USD is currently placed in the bullish zone.
Hourly RSI – The RSI for ETC/USD is currently above the 50 level.
Major Support Level – $5.20
Major Resistance Level – $6.00
Cryptocurrencies have nothing but exploded in 2017 and despite their decline in 2018, they are still way ahead of where they were just a few years ago. However, there is one issue which persists – market entry. The growth in their price led to the emergence of many new cryptocurrencies. There are currently thousands of them, and finding the best ones to invest in is challenging, to say the least. Cryptoindex presents an efficient and seamless way to step into the otherwise complex cryptocurrency world.
The majority of existing cryptocurrencies hit their all-time high figures at the end of 2017 and the beginning of 2018. This year’s prolonged bear market, however, has seen the gains of late 2017 fade away, while high volatility seems to be making headlines.
In these unprecedented market conditions, one thing seems to be standing out – the need for stability. Furthermore, as the prices are declining, many are purportedly preparing to fill in their bags in anticipation for the next rally. But picking the right asset to invest in remains as challenging as ever. Not anymore.
CRYPTOINDEX – INTRODUCING THE SOLUTION
Cryptoindex represents a modern solution which could easily tackle the challenges mentioned above. It harnesses the capabilities of blockchain technology and of Artificial Intelligence (AI) algorithms. As such, it presents an index of the 100 best performing cryptocurrencies which is constantly evolving.
The utility token of Cryptoindex – CIX100, references the proprietary AI index which incorporates the top 100 best performing cryptocurrencies. The CIX100 reduces time spent on research, expenses, as well as the need to constantly monitor every single individual coin at the same time.
AI-BASED READYMADE MARKET ENTRY
Cryptoindex provides for a wide range of different benefits for both seasoned and novice traders thanks to its AI-based system known as Zorax. The algorithm uses social media and the web, as well as a lot of other factors in order to help pick the coins which will be kept, added, or removed from the index.
Its system can easily make these decisions because it can assimilate a large amount of information and inputs at an unparalleled speen which can’t be matched by any person. That’s what enables it to take advantage of all the opportunities in this otherwise volatile market.
In other words, the CIX100 token allows the user to track a carefully and properly selected number of cryptocurrencies which are being carefully monitored, updated, and assessed without the need for thorough, time-consuming and expensive research.
BACKED BY EXPERIENCE
The project is run and developed by a team of mathematicians who have over 13 years of experience in the fields of trading strategy and market evaluation. The CEO of the project, VJ Angelo, is a seasoned veteran in financial markets, heading the Global Derivatives Indices part of the LDX Group. He has more than 30 years of experience.
According to Angelo, the market transitions to a professional state where CIX100 will be able to play a very important role:
As the Crypto market transitions from its current state to a far more professional financial markets tool, Cryptoindex and its first product the Cryptoindex 100, along with its associated utility token the CIX100, can play a key role in this process. The token and the index will provide a step in the process for the market to adopt indices and the tools to gain exposure to them as part of the growth and development of Cryptocurrencies. The Cryptoindex 100 has the opportunity to become an industry benchmark.
Cryptoindex’s ICO is ongoing and the team has already managed to raise over $10 million. You can read more about the project on its official website.
The energy costs of bitcoin mining are often cited as canceling out the. We must also consider the savings made, in avoiding some of the hidden costs of the alternative.
Critics of gold originally made the same arguments — that the mining and storage cost of gold meant paper money was more economical. However, American Economics Professor Roger Garrison points out that society incurs additional costs under a fiat system.
- The cost of different political factions trying to gain control of money production.
- The cost of special interest groups, advocating misuse of money production for their own benefit.
- Inflation-induced misallocations of resources, through misused authority.
- The cost to business of trying to predict monetary authority behavior and actions.
DEBT TO SOCIETY
In any business transaction, we must consider cost and benefit. The expected value of the benefit must be more than the price we pay. Otherwise, no deal.
As Nick Szabo points out: bitcoin’s high resource consumption buys social-scalability, which is arguably more valuable. Dynamic proof-of-work schemes, while processor-intensive, provide stronger resistance to forgery, inflation, and theft. Bitcoin also has no concept of debt.
The inexpensive debt market financing available through the fiat system allows governments to push through expensive and destructive programs. Whilst an electorate may not support tax increases to fund foreign wars or unfair benefits systems, debt financing can hide this in the costs of inflation.
There is a tendency to move towards one highly liquid and saleable money — a winner in the global economic race, as it were. If that winner should be the bitcoin (or any other PoW cryptocurrency) standard, a full analysis of costs should include:
- Signification reduction in the size of government.
- The end of fractional reserve banking’s boom-and-bust cycle.
- Reduced costs in the warfare and welfare state.
So the next time someone bemoans the “fact” that bitcoin mining is destroying the planet, perhaps urge them to consider the things it could be saving. As Garrison says:
Ultimately, the cost of any action, commodity, or institution is the alternative action, commodity, or institution forgone. The opportunity cost is the only cost that counts.
Ethereum Smart contract and dApp developer Level K has uncovered the existence of a vulnerability within the Ethereum framework that potentially allows bad actors to mint large amounts of GasToken when receiving ETH.
In a blogpost published on November 21, the company revealed that the weakness has been flagged to most at-risk exchanges who have since effected software patches to contain the threat.
Potential GasToken Security Weakness
The vulnerability arises when ETH is sent to an address, which is then able to carry out arbitrary computations that the transaction originator pays for, which comes with a risk of ‘griefing’ – an action by a bad-faith actor designed to cause damage to network users. In theory, an attacker would be able to make a transaction originator such as an exchange pay for an arbitrary amount of computation if the exchange has no protections like gas limits in place.
By minting vast amounts of GasToken while receiving ETH, it would thus be possible at least in theory for such a griefing attack to become profitable to a bad actor.
What is more, the risk is not limited to ETH, but also includes all Ethereum-based tokens such as those built on ERC-721 and ERC-20 standards. In the course of carrying out contract calls to effect transfers, exchanges that do not set a gas limit for transactions with these tokens can end up paying for vast amounts of computation and suffering similar fate.
An excerpt from material published by Level K explaining the threat using a hypothetical case study reads as follows:
“In the simplest exploit scenario, Alice runs an exchange, which Bob wants to harm. Bob can initiate withdrawals to a contract address he controls with a computationally intensive fallback function. If Alice has neglected to set a reasonable gas limit, she will pay transaction fees out of her hot wallet. Given enough transactions, Bob can drain Alice’s funds. If Alice fails to enforce Know Your Customer (KYC) policies, Bob can create numerous accounts to circumvent single-account withdrawal limits. In addition, if Bob also wants to make a profit, he can mint GasToken in his fallback function, and make money while causing Alice’s wallet to drain.”
According to Level K, exchanges potentially affected by the vulnerability were notified privately on November 13, and because it was not possible to say exactly which ones had no protections in place, this notification was sent to as many exchanges as possible, all of whom have now implemented patches to fix the problem.
Level K has also published further information and a complete rundown of the threat and the actions taken to contain it here.
Miners have been decimated by the market downturn. In response, miners have started decommissioning hardware, mothballing rigs, and even selling hardware by the pound.
Bitcoin and cryptocurrency proof-of-work (PoW) mining is a controversial topic. Mining is a process where computers continuously solve a difficult algorithm in exchange for cryptocurrency. This exchange consumes a massive amount of electricity, but also secures and processes transactions on the Bitcoin network.
This excessive consumption of electricity is intentional. Decision-making power in Bitcoin is based on the agreement and consensus of miners. By making it very expensive to gain majority control of the Bitcoin network, the coin is able to remain more decentralized and more secure from hacking.
By the Numbers
Based on estimates from the most sophisticated Bitcoin miner, the Antminer S9i, mining a single Bitcoin takes roughly 51,000 kWh, the equivalent of one day’s electricity consumption for 1700 residential homes.
At a standard electricity rate of $0.12 per kWh, mining one Bitcoin costs $6100.
That said, the recent drop in market prices is cause for concern. Lower Bitcoin prices make it less profitable to mine. Lower profitability results in less miners and the miners that remain are typically large-scale operations that can keep costs down.
Bitcoin hashrate is now the lowest it's been since August. It's still up sharply since the start of the year but it seems clear that some miners are shutting down their rigs in face of lower BTC prices. pic.twitter.com/Og9AJM6FGt
— Mati Greenspan (@MatiGreenspan) November 20, 2018
This impacts Bitcoin by potentially centralizing decision-making in the power of a few miningcorporations. These corporations, such as Bitmain, are primarily based in China.
Such high levels of centralization could trigger another hash war as seen in Bitcoin Cash. If two major mining companies disagree on the software-development direction of Bitcoin, it could cause a fork and shake people’s trust in the cryptocurrency.
Given current market prices, even the most efficient Bitcoin mining hardware is unprofitable for the average person. Assuming an electricity rate of $0.12 per kWh, people who own an Antminer S9i would lose $340 per year to electricity costs.
This does not even include depreciation of the hardware itself, meaning the losses are much higher than this figure. An S9i sells for roughly $550 with a two-year useful life, a depreciation rate of $275 per year, increasing the yearly loss to $615.
That said, mining is not dead for the major players. There are many places in the world where businesses are able to secure electricity at a fourth-of-the-average rate. In many places in China, Eastern Washington, Canada, and Iceland, businesses can purchase electricity at $0.03 per KwH or lower.
Given these figures, one Antminer S9i earns over $680 and gross profit of $405 after depreciation (however, industrial miners are able to purchase this hardware at a deeply discounted rate). Most mining facilities have thousands of these machines, allowing each facility to earn millions of dollars per year.
Giga Watt Inc Bankruptcy
Some miners are already feeling the heat of the market crunch. Giga Watt, a Washington-based mining service that rents and sells mining power and equipment filed for bankruptcy on Nov. 19.
In June 2017, the company conducted an ICO and raised $20 million from its token (WTT). According to the company’s whitepaper, each token “represents the right to use the Giga Watt processing center’s capacity, rent-free for 50 years, to accommodate 1 Watt’s worth of mining power consumption.”
However, the company was unable to deliver on its promises of providing these services as the cryptocurrency market took a dive following the end of 2017. Unable to deliver on its promises, investors took to suing Giga Watt for selling unregistered securities and rescission of contract.
Although many of these mining companies are privately owned, previously semi-profitable enterprises could become the next victims of the market downturn. What this turbulence spells for the centralization and security of Bitcoin, and the crypto markets in general, is still uncertain.
Calculations: 1320 watts per Antminer S9i * (365.25 days * 24 hours per day) / 1000 watts per kWh = 11,571 kWh per Antminer per year. One Antminer S9i mines 0.2253 BTC per year, given current market conditions, mining difficulty, and block rewards. 1 / 0.2253 BTC per Antminer per year = 4.439 Antminers to mine one Bitcoin per year. 4.439 Antminers * 11,571 kWh per year = 51,364 kWh per Bitcoin. Average electricity consumed by a residential customer: 909 kWh per month. 909 kWh / 30 days = 30.3 kWh per day per residential customer. 51364 kWh per Bitcoin / 30.3 per residential customer = 1695 residential customers.
Cover Photo by Kev Seto on Unsplash
Italy’s financial regulator, the National Commission for Companies and the Stock Exchange (CONSOB), has warned against three cryptocurrency companies engaged in schemes to promote cryptocurrency mining and investments. CONSOB said the companies were neither licensed nor authorized to provide the services they promised.
Cease and Desist Notice for Unlicensed Firms
On Nov. 20, the Italian regulator issued a cease and desist notice against foreign currency broker Richmond Investing, alleging it did not hold a valid license and was providing “unauthorised investment services and activities to the Italian public.” Richmond Investing promises investors high returns within a short period of time while claiming to provide integrated investment services for several assets, said CONSOB.
The unlicensed Crypton Ltd was suspended from offering its digital currency, called “crypton,” to the public for 90 days. The company claims to “provide passive income in the form of Proof-of-Stake mining that is available to all holders of the crypton coin.”
CONSOB also stopped Alessandro Brizzi from promoting the crypton token on his Facebook page, while Eagle Bit Trade was blacklisted, specifically for encouraging investors to use its “so-called trading packages” to transact in cryptocurrencies.
Eagle Bit Trade is a bitcoin trading platform that pays a bonus to “package holders” if they recruit a new member, with residual commissions earned as the pool or team members in this binary compensation setup grow. The platform claims to offer free registration to new users, “however, you must purchase a package before you can start earning money.”
Italy’s financial watchdog “started gathering information about these platforms after receiving complaints about them,” Finance Magnates reported. In June, Consob, an autonomous statutory body set up to help regulate Italy’s securities and futures market, warned against four foreign currency brokers. It said the companies, Fah Investment Ltd, CFX Point Ltd, AJN Trade Ltd and Light Media Ltd, were not authorized to provide investment services in the country.
Europe Moves to Regulate Crypto
CONSOB follows in the footsteps of other European regulators that have announced a series of measures targeted both at taxing and regulating cryptocurrencies.
The U.K’s Financial Conduct Authority said in October that it will begin consultations on whether to ban the sale of derivatives based on digital coins like BTC as well as to restrict crypto-based contracts of difference to the public. Virtual currency futures and options will also be looked into, in discussions slated for the first quarter of 2019.
In Spain, a proposed law will seek to tax cryptocurrencies while authorities closely monitor the activities of 15,000 crypto investors.
Source: News Bitcoin
The Spanish Ministry of Finance will inspect the holdings and operations of 15,000 taxpayers as part of its efforts to prevent tax evasion and fraud.
After launching an investigation into a number of cryptocurrency-related firms earlier this year, the Spanish Ministry of Finance is now bolstering its efforts to prevent tax evasion and fraud, inspecting 15,000 taxpayers who have made digital asset transactions over the last year, local news outlet El Pais reported on Monday.
Iin April, as part of its annual tax control plan, Spain’s tax collection department, the Agencia Estatal de Administracion Tributaria (AEAT), requested information regarding cryptocurrency holdings from more than 60 digital currency and blockchain-related firms, including banks, payment service providers, exchange platforms and ATM operators. As a result of the inquiry, the agency has identified 15,000 taxpayers whose crypto holdings and operations require further review. It remains unclear whether that list consists of companies, individuals, or both.
The AEAT will now investigate if these taxpayers use digital currency to launder money, and whether they declare the capital gains or benefits of their operations. Any capital gains made on cryptocurrencies by Spanish taxpayers are subject to a tax rate of between 19% and 23%, depending on the individual’s profit.
“The use of internet for trafficking and trading of illegal goods, as well as the use of cryptocurrencies, such as Bitcoin [BTC], as payment means, is one of the most demanding challenges today. In order to face this threat, the use by the tax agency’s research units of the new information collection and analysis technologies in all types of networks will be enhanced,” the AEAT outlined in its annual tax control plan.
In May, the Spanish congress supported draft legislation calling for a review of crypto and blockchain-related regulations. The initiative involved a proposal to introduce the technology to the local market through “controlled testing environments,” commonly referred to as “regulatory sandboxes.” Furthering its efforts to formalize the nascent industry, last month the Spanish government approved a draft law, which will oblige investors to declare their crypto asset holdings specifically for tax purposes.
While the Spanish authorities remain cautious of the potential use of cryptocurrencies for illegal activities, the country is hosting the world’s first regulated national blockchain network. The Alastria consortium, launched last month, unites major players in Spain’s key industries by offering distributed ledger technology (DLT) solutions, as well as the possibility to develop tokens representing digital equivalents of their assets.
Singapore’s central bank, the Monetary Authority of Singapore (MAS), has finalized new regulatory framework for payment service providers in Singapore. The new regulation allows payment service providers that are licenced under the regime to support certain cryptocurrencies in their services.
Payment Services Bill (PSB)
As explained by Singapore’s central bank:
The Payment Services Bill will provide a more conducive environment for innovation in payment services, whilst ensuring that risks across the payments value chain are mitigated.
In addition to payment service providers already under the current regulation, it’s been reported that cryptocurrency service providers who were previously outside of regulation can now expect to be licenced under the new Payment Services Bill.
Activities to be regulated by the bill include the issuing of accounts and electronic money, the transfer of money within and out of Singapore, the acquisition of merchants who will use their platform, money changing, and the dealing in and exchange of digital payment tokens such as Bitcoin.
The Payment Services Bill outlays 2 primary regulatory frameworks in which payment service providers must follow — the first being the enabling of MAS to regulate payment systems for financial stability as well as efficiency reasons, the second being that all payment service providers must be licensed.
Furthermore, payment service providers must apply for the proper license most suited to their services. They can either apply for money changer, a standard payment institution, or a major payment institution license.
To apply for a standard payment institution license, the entity must transact over $3 million per month and hold no more than $5 million.
As pointed out by the Straits Times, by requiring payment service providers to be licensed as a money-changer, the MAS will be better able to regulate for money laundering and terrorism financing. As for the other 2 licences for a “standard” or “major” payment institution, a more comprehensive approach to regulating is applied, with major payment institutions receiving the most rigorous regulation.
Payment service providers who utilize digital tokens will have 6 months to comply with the regulations set forth by the the PSB. As for non-crypto payment service providers, they will have 12 months to comply.
Regulation and Institutional Investors
Singapore’s regulatory developments are finalized in a time when talks of institutions coming to crypto are plentiful. The correlation between the two cannot go unnoticed, as institutional investment must have sound regulations in place before delving in.
As stated in their recent report, Big Four auditor KPMG believe that regulatory oversight is essential for big institutions to invest in cryptocurrencies.
Furthermore, in a recent interview, CEO of Binance Changpeng Zhao proclaimed that institutions are coming to crypto: “It’s just a matter of time.”
As Singapore’s regulatory framework for cryptocurrency service providers is finalized, we could potentially see an influx of institutional investment coming from Singapore. However, only time will tell if this development will have a positive impact on the crypto market.
Source: Invest in blockchain
The University of Tokyo began offering a blockchain course at its graduate engineering school, thanks to an $800,000 donation from a consortium that includes the Ethereum Foundation and Japanese banking juggernaut Sumitomo Mitsui.
The class — called the “Blockсhain Innovation Donation Course” — was rolled out on November 1 and will run through October 2021, according to a statement by Sumitomo Mitsui.
Other corporate donors included Good Luck Three, JSS Corp., Zipper Corp., Hotlink Co., and Money Forward Inc.
Goal is to Cultivate Blockchain Entrepreneurs
The purpose of the blockchain course is to educate highly motivated, business-minded students with “outstanding talent in information mathematics” about fintech and the game-changing technology underpinning cryptocurrencies.
The University of Tokyo hopes to nurture future blockchain entrepreneurs by teaching them about decentralized networks and how to implement them socially.
Blockchain is a hot, trendy field of study right now, and many corporations are investing substantial amounts of money to promote the development and widespread adoption of blockchain.
Experts say the innovative technology could transform healthcare, banking, supply-chain management, and the entertainment industry.
Ripple Donated $50 Million To Multi-Uni Program
In June 2018, Ripple, the blockchain-based payment network, donated $50 million to 17 universities around the world to launch a partnership called the University Blockchain Research Initiative. Ripple made the donations in US dollars, not cryptocurrency.
The company said interest in blockchain is soaring as more people are discovering the vast potential of distributed ledger technology, including facilitating speedier cross-border payments.
In April 2018, Ripple also invested $25 million of its XRP cryptocurrency into Blockchain Capital Parallel IV, a $150 million fund that will invest in blockchain ventures.
Even “Old Money” like the Rockefeller family is investing in blockchain startups,
Many top business schools around the world, including Wharton and Stanford, have expanded their MBA course offerings to include classes on bitcoin and blockchain,
According to a recent Coinbase study, almost half of the world’s top universities now offer at least one cryptocurrency-related class.
Top Business Schools Add Crypto Classes
Kevin Werbach, a professor at the Wharton School of the University of Pennsylvania, is currently teaching a class this semester called “Blockchain, Cryptocurrency, and Distributed Ledger Technology.”
“We’re at the point where there’s a critical mass to teach this domain,” Werbach told CNBC. “There will be a real phenomenon in business for the foreseeable future. And five years down the road, there won’t be too many major business schools that don’t offer similar classes.”
Similarly, John Jacobs — executive director of the Georgetown University Business School — said he has been inundated with calls from corporate recruiters asking for applicants who understand blockchain technology.
“Any world-class program is going to have to equip students in this field to compete,” Jacobs said. “It’s everywhere we turn around.”
Over the past week, the price of Bitcoin has dropped by more than 35 percent, and the majority of analysts in the crypto space have shared the sentiment that the crash was triggered by the contentious hard fork of Bitcoin Cash.
According to Bart Smith, the head of digital asset at trading giant Susquehanna, a lack of liquidity in Bitcoin markets allowed the dominant cryptocurrency to be vulnerable to a large sell-off caused by the Bitcoin Cash hash power war and hard fork.
In the months to come, Smith explained that the entrance of Fidelity, ICE, and Bakkt into the cryptocurrency market could increase the liquidity of BTC and lead to a rise in capital in the space to soak up big sell-offs.
Importance of Fidelity and Bakkt
Currently, it is fairly difficult for an average trader to invest in the cryptocurrency exchange market through trading platforms like Coinbase and Bitstamp. Investors are required to hand in photocopies of government-issued documents, undergo rigorous Know Your Customer (KYC) processes, and comply with policies enforced by exchanges.
— CNBC's Fast Money (@CNBCFastMoney) November 20, 2018
The impractical systems adopted by cryptocurrency exchanges as per the request of government agencies in the US, Japan, South Korea, and other leading digital asset markets have limited the cryptocurrency market to a relatively small group of investors that possess a certain know-how to invest in the emerging asset class.
“Number one, the on-ramps for new capital is very difficult. If you’re a global institution, it is still very difficult to buy Bitcoin in a way you might want to. A wealthy individual from the G.I. Generation is not going to take a high-resolution picture of their driver’s license and send it to a website and send money there. They want to invest with Fidelity. They want to invest with Bank of America.”
The Susquehanna executive added that the limited number of fiat on-ramps in the cryptocurrency market made it difficult for Bitcoin markets to absorb growing sell-pressure placed upon by investors that have started to lose confidence in the short-term trend of BTC due to the Bitcoin Cash hard fork fiasco.
“That has led to the second problem which is without the new capital on-ramp, liquidity has been very low. And so we’ve kind of seen a stable price all through summer, it was at $6,000 give or take. Volatility got really light at the end of July. So what happens is in that environment, if you have a contentious fork, it does not necessarily create a tremendous amount of confidence and when those sellers come in, there’s just no liquidity to absorb it. Hopefully, with Bakkt, Fidelity, and further regulations, there are going to be enough capital to soak it up.”
Targeting Retail Traders
As of now, both Fidelity and Bakkt are leaning towards institutional investors as their target client base. But, if financial institutions like Fidelity, Goldman Sachs, and Morgan Stanley begin to provide cryptocurrency investment services to retail traders as proposed in October, it could substantially increase the liquidity coming from individual investors in the crypto space.
California-based financial institution Silvergate Capital, the parent company of Silvergate Bank, is preparing to go public to raise $50 million in an initial public offering (IPO), according to documents filed with the US Securities and Exchange Commission (SEC).
The bank has applied to list its shares on the New York Stock Exchange (NYSE) under the ticker symbol “SI.” The company plans to use proceeds to funds its organic growth and for “general corporate purposes, which could include repayment of long-term debt, future acquisitions, and other growth initiatives.”
Silvergate Bank is best known for opening its arms to cryptocurrency exchanges and companies, who are often shunned by mainstream institutions who fear the money laundering baggage that seems to follow bitcoin and the regulatory uncertainties associated with servicing crypto firms. The bank has grown larger in recent years, drawing in clients such as Paxos, Gemini, and Kraken. Having signed its first cryptocurrency client in 2014, the Digital Currency Group, the company has gone on to generate approximately $1.7 billion from the digital currency sector, according to the filing.
The company’s willingness to work with cryptocurrency companies has seen it onboard approximately 483 established and new digital currency customers as of September 30. There are also 145 prospective crypto customers currently being onboarded by the bank, where they perform “extensive regulatory compliance diligence and integrating of the customer’s technology stack for those digital currency customers interested in using our API.”
The filing states:
“As of September 30, 2018, approximately $1.7 billion, or 88.2%, of our total deposits were noninterest-bearing demand accounts[…] Substantially all of these noninterest-bearing demand accounts are deposits from our customers in the digital currency industry.”
As the filing states, Silvergate’s focus has moved away from that of a traditional lender to providing non-interest bearing deposits for digital currency businesses. The financial institution estimates the market for cryptocurrency banking services to be between $30 billion and $40 billion.
In 2017, Silvergate launched its proprietary digital currency solution, Silvergate Exchange Network (SEN), which facilitates the swift movement of fiat between cryptocurrency exchange and their customers 24/7, 365 days a year.
An investor update from September pegged completion of the Telegram Open Network — the social media giant’s long-anticipated cryptocurrency project — at 70 percent. Perhaps the most notable element of the report, which was leaked on LinkedIn and had not previously been publicly available, is that the virtual machine (similar in nature to the Ethereum Virtual Machine) required to execute smart contracts on the TON is all but ready to deploy. The news was first reported by The Block.
Telegram, the Russian secure messaging service that sees global usage, including within the crypto community, raised $1.7 billion in its private ICO sale. The Telegram Open Network is intended to be a competitor to Ethereum for the launch and execution of smart contracts and decentralized applications. This means that it will likely play host to yet more tokens, and the value of the token may well be influenced by future ICOs that use it as a base platform.
BitMEX CEO Arthur Hayes recently commented that the Telegram ICO tokens had yet to be listed on any secondary exchange and that he sees in the near-future of ICO tokens a “reckoning” — specifically in 2019.
According to the report, some aspects of the network in addition to the TVM are complete, such as Overlay networks. The parts that were lagging as of September, having less than 50 percent of the work completed, were the important block manipulation library and validation software stack.
Smart contracts and developer resources like sample smart contracts were also just barely begun.
The update did not specify when the test version of the TON will be live, but if we extrapolate from roughly 6 months of development at 70 percent completion, then a few months tops would seem to be a fair prediction.
The TON ICO had some intrigue when a fraudulent company named Telegram Open Network was established in Britain with the express effort of ripping off would-be investors:
“Telegram Open Network seems to have been created in an effort to divert funds away from the genuine project, and likely would have succeeded if the scam hadn’t been exposed. Their legal registration as a company could have legitimized the project in the eyes of potential investors, but the project came to Telegram’s attention recently, and a tweet on April 6 revealed that it was totally unconnected to the official project.”
Chris Burniske, a Placeholder Management partner, said that the US stock market retracement, sell-off of Ethereum, and the Bitcoin Cash hard fork were the three major factors behind the recent crypto wipeout.
In the past seven days, more than $65 billion has been deleted from the cryptocurrency market as every major cryptocurrency including Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Bitcoin Cash (BCH), and other digital assets recorded large losses in the range of 10 to 50 percent.
Bitcoin Cash Hard Fork Was the Main Catalyst
Over the last several months, the US stock market experienced a steep decline in value as the Dow Jones crashed. With credit card, mortgage, and student loans hitting record highs, analysts now expect the US economy to suffer a 2008-esque crisis in the years to come.
This week, CNBC reported that corporate debt in the U.S. reached $9 trillion, posing a threat against the economy which has already started to weaken at a rapid rate since mid-2018.
Michael Temple, director of credit research at asset manager Amundi Pioneer, said:
“The answer hinges on how long we have until the credit cycle turns, how long we have until interest rates have gotten to the point where they start to snuff out economic activity. If we were of the opinion that interest rates are already too high for the economy to stand and the recession was going to happen sometime next year, then I would say we’ve got a real big problem here.”
According to Chris Burniske, the abrupt drop in the prices of major stocks and equities has led investors to clean up their portfolios, eliminating high-risk selections like crypto.
“First, there is a broader risk off environment throughout the markets. Your riskiest assets tend to get sold off most in a risk off environment. That’s definitely happening with crypto,” Burniske explained.
He emphasized that as the ICO market nosedived and the hash power war between Bitcoin Cash and Bitcoin Cash SV triggered uncertainties in the market, the cryptocurrency sector fell further down in value.
“Ethereum has been through a broader deleveraging from the ICO boom from last year where funds were raised and those funds were used to raise and it’s kind of a cyclical deleveraging. The third thing is Bitcoin was forming support at $6,000 for about 3 to 4 months and there’s a lot of turbulence around a child of Bitcoin called Bitcoin Cash, which has also forked and that has perturbed the markets and broken that technical indicator and so we are searching for a new bottom in crypto land.”
A culmination of three major factors contributed to the 21 percent drop in the valuation of the cryptocurrency market, making it the fifth worst correction in the history of the market.
Not All That Gloomy
The cryptocurrency sector has only had four major corrections in the past nine years, and the 79 percent drop of BTC from $19,500 to $4,050 is the smallest major corrections out of all.
If the market demonstrates strength in the current low price range and enters a several-month-long consolidation period to demonstrate stability, the probability of a mid-term recovery by the first half of 2019 could increase.
Major money transfer service TransferWise has indicated that in spite of excitement over the growth of Ripple’s global payment solution, it has not seen a compelling case for using blockchain technology to carry out its business — yet. Speaking to Fortune recently, TransferWise chairman and co-founder Taavet Hinrikus stated that while there exists a lot of excitement over the possibilities created by the blockchain, its operational realities present a new set of challenges on their own.
Excitement Versus Reality
Speaking on a new episode of Fortune’s “Balancing the Ledger,” Hinrikus stated that London-based TransferWise, which currently conducts money transfers among more than 70 countries, supports the idea of blockchain-based transfers in principle, but that right now they are trickier to handle than the existing framework. As a result, the firm, which undercuts SWIFT by processing cross-border transactions at high speed for as little as 1.5 percent commission, sees little benefit in adopting blockchain technology in the near-term.
Explaining why this is, he said:
“We’ve heard this dream many times from different people. However if you start digging into it, you realize that it may look great on paper, but in reality, to make use of it, it’s really hard. We’ve looked at different blockchain technologies, but yet we haven’t found anything which enables us to do what we do in a way that is cheaper or faster.”
In part as a result of fintech companies increasingly finding new ways to sidestep the expensive SWIFT network, blockchain transfers are becoming less competitive compared to other emerging alternatives. Fintech companies that consider implementing blockchain frameworks now require more and more significant upsides to make the switch worthwhile, he said.
According to Hinrikus, TransferWise has examined Ripple’s high-speed, cross-border payment solution, RippleNet, and has found no compelling reason to use it given its current level of adoption.
Explaining why this is, he remarked:
“If every bank in the world was going through the Ripple network, it would be amazing. Yet how many banks are using Ripple today in production? It’s a very short list. In that sense we’re big supporters of Ripple or anything else…and if any of these gets enough adoption, and it actually materially helps us do things cheaper and faster, we’d love to, but so far we haven’t found one.”
Western Union CEO Hikmet Ersek expressed a distinct lack of enthusiasm over a potential switch to Ripple after the company carried out an XRP trial run. Ersek stated at the time that the results of the trial did not show any real cost savings that would warrant overhauling the existing system to use XRP for cross-border payment settlement.
Over the past 24 hours, the price of Bitcoin fell from $4,900 to $4,280, by more than 12.5 percent amidst an unforeseen short-term price drop.
On fiat-to-crypto exchanges like Coinbase and Kraken, which demonstrate a more accurate representation of the Bitcoin price given the premium on the Tether-to-BTC pair, the price of BTC dropped below the $4,300 mark for the first time in 2018.
$4,280: Where is the Bottom?
On November 19, a cryptocurrency trader and analyst known as The Crypto Dog stated that $4,800, despite being down from 6,300, is not a bottom for Bitcoin.
“$4800 was not a bottom by any means – my arbitrary line in the sand was the wrong arbitrary line. Judging by volume, we are still quite far from a bottom. So far this sell off has been relatively weak (volume wise). BTC / USD longs are rising, while shorts are barely touched. This dump has been straightforward spot selling, and no one is interested in buying.”
Tthe low volume of BTC in a period of an intense sell-off and free fall suggests a further decline to the low $4,000 region is likely, especially if the volume of BTC begins to increase in the days to come.
The Crypto Dog reaffirmed that a spike in volume on Bitcoin could lead to a decline to a low range at $4,000. Since then, the price of BTC has fallen from $4,800 to $4,250.
“The bears aren’t even pushing, $BTC is just free-falling. Very weak dump, imagine what it looks like when the volume comes in. A short-term reversal could happen at any moment – shorting with high leverage is a terrible idea. However, if you are trying to knife catch, be patient. No one should be in a rush to long this.”
Within the past three days, BTC recorded a 32 percent drop in price without immense sell pressure and large sell orders from the bears in the market. In the short-term, there exists a possibility for a quick turnaround, but investors also have to respect the possibility of a further decline to $4,000 and a test of the $4,000 support level.
Given the intensity of the drop of BTC in the last 24 hours, a minor corrective rally is expected, as long as the sell volume of BTC remains low.
South Korea Has Gone Quiet
The volume of the cryptocurrency exchange market has dropped substantially over the past seven days, as the cryptocurrency market lost more than $50 billion of its valuation.
South Korea has consistently been the third largest cryptocurrency exchange market throughout 2018 and the drop of Bithumb, Upbit, and Korbit’s volume has put the market at risk of dropping out of its position.
If BTC fails to recover to mid-$4,000 in the upcoming days, trading activity in the global cryptocurrency exchange market is expected to drop even further.