Congress wants the Financial Crimes Enforcement Network (FinCEN) to up its internal blockchain game with a new bill to study how the technology could be adapted for law enforcement.
On Sept. 19, the House of Representatives passed legislation calling for the financial crimes regulator to study its use of “innovative technologies” — including blockchain. The bill now moves to the Senate for consideration.
The “Advancing Innovation to Assist Law Enforcement Act” mandates that FinCEN’s director consider how blockchain and other tech advances can improve the bureau’s operations.
“The Director of the Financial Crimes Enforcement Network (“FinCEN”) shall carry out a study on… whether AI, digital identity technologies, blockchain technologies, and other innovative technologies can be further leveraged to make FinCEN’s data analysis more efficient and effective,” the bill reads.
Freshman Representative Anthony Gonzalez (R) Ohio, a member of the House Financial Services Committee, introduced the bill in May as a high-tech means to fight financial crimes.
“My bill makes sure that we are using the best technology we have available to find and stop the money laundering that makes all these crimes not only possible, but financially profitable for cartels, traffickers, and terrorists,” Gonzalez said.
Gonzalez’ act pushes FinCEN towards a technology whose best-known manifestation — cryptocurrencies — have largely been its to regulate. The Treasury department bureau’s interpretive guides and letters on matters from AML compliance to ICO rules inform industry players. If signed into law, FinCEN may have to jump in.
Gerard Daché, executive director at the Government Blockchain Association, which promotes blockchain technology solutions to government, called the advance long overdue.
The government often plays catch-up to “bad guys” and their blockchain tools, Daché said, wasting time, energy and money on antiquated techniques while the enemy races ahead.
“It’s almost like an ostrich sticking its head in the sand” said Daché. Government bureaus such as FinCEN need to study how these tools are being used and then integrate them into their own arsenal, he said.
“When bad actors engage with it we’ve got to meet them on the battlefield of technology.”
New cryptocurrencies are coming to the European and American subsidiaries of BitFlyer.
According to a release from the exchange today, bitFlyer Europe is adding buy and sell trades for bitcoin cash (BCH), ethereum classic (ETC), litecoin (LTC), lisk (LSK) and monacoin (MONA). bitFlyer USA is adding bitcoin cash, ethereum classic, and litecoin to its trade offering as well.
One of the oldest crypto exchanges, bitFyler operates out of Japan. Recently it was recognized as a ‘Real-10’ exchange by a Bitwise report to the U.S. Securities and Exchange Commission.
In the spring report, Bitwise claimed only ten of the top cryptocurrency exchanges–equal to five percent of the market–displayed real trading volumes.
In a statement, co-head and COO of bitFlyer Europe Andy Bryant said bitFlyer is listing the alternative cryptocurrencies to widen the American and European market offerings.
“By adding new altcoins, we are expanding bitFlyer’s Buy/Sell offer significantly, giving our customers instant access to some of the largest and most exciting altcoins in the world,” Bryant said.
New offerings also point toward the exchange standardizing across its various markets, Bryant continued.
“Those currencies were previously only available to our Japanese customers, so we’re also consolidating our offer across regions, building a global platform for traders all over the world.”
For now, alternative cryptocurrencies lisk and monacoin will not be available for bitFlyer USA customers.
Automaker Daimler has carried out its first transaction on the blockchain-based Marco Polo trade finance network.
The pilot commercial trade transaction saw the firm – which owns Mercedes-Benz among other brands – process the data required to exchange payments with engineering firm and parts builder Dürr, according to a press release sent to CoinDesk on Wednesday. German bank Landesbank Baden-Württemberg (LBBW) was also involved in the trade.
The pilot involved an order and delivery agreement for a balancing system from Dürr subsidiary Schenck arranged over Marco Polo. Payment was prearranged through a conditional commitment from Daimler’s bank.
Once the ordered equipment was delivered, the fulfillment data was entered onto Marco Polo and automatically reconciled with the agreed transaction data, thus triggering an irrevocable payment obligation.
Founded by startups R3 and TradeIX, Marco Polo is built on R3’s Corda blockchain platform. The network aims to deliver real-time connectivity, boost transparency in trading relationships and lower barriers to accessing capital.
Currently, arranging traditional paper-based payments for international trade transactions is inefficient and and slow, requiring multiple systems and a number of intermediaries such as logistics providers, insurers, customs authorities, according to LBBW’s announcement.
The pilot – conducted in “minutes instead of days” – had persuaded Dürr and Daimler that blockchain can make the process “faster and simpler,” said the bank.
Susanne Schlegel, CFO of Schenck and Dürr Division Measuring and Process Systems, said:
“We focus on efficiency increases not only with regard to our machines and systems, but also to our business processes. The successful pilot project between Daimler and LBBW demonstrates the intrinsic efficiency potential of digital trade finance processes. Innovative platforms and technologies such as Marco Polo and Corda allow us to reduce complexities in order fulfillment – to the benefit of all participants”
The ability to automatically trigger payments was a milestone for the network, announced in August. Marco Polo’s first such transaction involved LBBW and Commerzbank and saw logistics provider Logwin AG adding data to the blockchain to initiate the payment obligation.
Digital currency trader and lender Genesis expanded its trading and research capabilities Thursday by acquiring New York-based quantitative investment firm Qu Capital.
In an interview with CoinDesk, Genesis CEO Michael Moro said Qu Capital initially approached his company to use its trading and lending services early this year. Genesis then decided to acquire Qu Capital to integrate its in-house team and expand its trading and lending businesses.
Moro declined to disclose financial terms of the deal.
Some of the technologies in use by Qu Capital are needed by Genesis to build its internal team, according to Moro. For example, one of the patented products acquired is a smart order routing system to facilitate transactions between cryptocurrency exchanges and investors.
Upon the acquisition, Genesis has hired two of the three founders Lucas Schuermann, Edward Yu and one junior staff member out of the six-person team at Qu Capital.
“We have been very impressed with the Qu Capital team and believe they will provide key technology enhancements that will benefit our trading and lending clients,” Moro said.
Genesis struck its first acquisition deal as its crypto-related lending business saw $746 million in loans in the second quarter, increasing its total originations to $2.3 billion since its launch in March 2018. The company provides high-net-worth individuals and institutional investors with over-the-counter digital currency trading and leading services,.
Investment startup Qu Capital, founded in 2017, develop trading technology, including exchange connectivity, order routing, and execution tools.
“We are excited to add the Qu Capital tools, which incorporate machine learning and other advanced methodologies, into our existing technology stack and new product offerings,” Pat DeFrancesco, CTO of Genesis, said in a statement announcing the acquisition.
Patrick Byrne, the former CEO of Overstock who resigned abruptly in August, has dumped his 13 percent stake in the e-commerce company he founded 20 years ago to buy cryptocurrency and precious metals, he announced late yesterday.
In a blog post at his DeepCapture.com, Byrne said that, by the end of the week, he will have reinvested all of the proceeds into “investments that are counter-cyclical to the economy.”
“Gold, silver and two flavors of crypto,” he wrote.
A longtime proponent of cryptocurrency — Overstock was one of the first companies to accept crypto payments, launched the tZERO security token trading platform and acquired the company behind Ravencoin — Byrne was ahead of the curve, but perhaps too much so, as the external pressures against him compelled his resignation from the company last month.
Byrne’s final gambit – a crypto dividend approved in July – worked to lift Overstock’s share price to a 52-week high last week, but the value of the shares fell by half as his plan unraveled.
Yesterday, after the market closed, Byrne filed a statement with the Securities and Exchange Commission (SEC) that he had sold 4.7 million Overstock shares worth $90 million. The transactions were over the previous three trading sessions, as the stock price fell from a high of $29.38 on Friday to $15.65 today.
Byrne’s blog post followed a statement from Overstock, announcing a halt to the crypto dividend policy after a New York Post report detailed the behind-the-scenes maneuvering – due to what Byrne described in his post as a leak from “the Deep State’s pets at the SEC.”
“They leaked that they were going to Bazoomba our digital dividend,” he wrote.
The November dividend was to be paid out as a digital security listed on tZERO. The dividend was actually a digital rights issue that would grant one digital voting series A-1 preferred stock, representing 10 shares of common stock, or 10 shares of voting series B preferred stock, that could only be traded through a Dinosaur Financial Group brokerage account and that only after being held for a six-month waiting period.
Overstock told the SEC in the filing that a new crypto dividend would be announced shortly that would exclude the long holding period and other restrictions to allow the digital rights to be traded freely and immediately.
The “leak” to the New York Post revealed that the crypto dividend was conceived by Byrne as a means to squeeze Overstock’s short sellers, who he knew would reject its complications and wind-up their positions.
The plan actually worked as Overstock’s share price surged. That is, until Byrne’s own sell-off began this week, as the Post reported that brokers at JPMorgan and Morgan Stanley were rescuing Overstock’s short sellers, offering them dollars at an equivalent value to the blockchain-based stock.
In the blog post, Byrne wrote that when word reached him of Wall Street banks stepping in to stymie his short of the shortsellers, he moved into action.
“Once that started getting back to me, I realized this: Whenever I have had any question about whether the SEC would or would not do something totally outrageous in order to hurt our company to benefit their clients on Wall Street, they never let me down: they always did the evil thing. So, Pettway decided it was time to eject, especially because he knows I need the ammo to go to war against the Deep State.”
Byrne said that he would buy Overstock shares again if the company were to bottom out in a coming economic crash, while his move into crypto assets would grow his assets under those conditions.
“You will have a friend who has sunk (almost) his entire fortune into investments that will soar if a crisis occurs.”
In the meantime, he said his net worth and “ammo” would be more secure on the blockchain, far from the reach of his enemies.
“The crypto is stored in the place where all crypto is stored: in mathematical mist, behind long keys held only in the memory of someone who is quite good at storing such things in memory (with paper backups in the hands of a priest I met 35 years ago who never sits [sic] foot in the West).”
“The other thing accomplished by the investment moves I described above is that my ammunition gets moved outside acts of retaliation from the Deep State. That is important because, in fact, I am now going to shellac them. Actually, ‘shellac’ is too weak a word for what I intend to do to the Deep State. Sit back and enjoy the show.”
The gallivanting, roguish, 6’8” executive resigned from Overstock last month after admitting to his affair with the Russian spy Maria Butina, in an attempt to avoid dragging the company further into the personal scandal.
Butina, who is now in jail for “conspiracy to act as an agent for a foreign government,” entered the US with a student visa to attend a dinner party in New York City hosted by Rockefeller heir George O’Neill for his Center of National Interest think tank that tries to bring the US and Russia together. In addition to the Rockefeller scion, her case ensnared the former head of the National Rifle Association and a gunrunner caught up in the 1980s Iran-Contra scandal, all three deemed her handlers here.
In a brief and bewildering letter to his shareholders, and filed with the SEC, Byrne confirmed the affair and claimed he had several roles as a confidential informant for law enforcement.
Byrne said that Warren Buffet had advised him to come clean and leave his job to prevent Overstock from being further enmeshed in a spy-versus-spy battle that had nothing to due with the online furniture business. Or crypto currencies, for that matter, although Byrne believes his enemies were motivated to target him because of his crypto evangelism.
Banking giant Wells Fargo says its blockchain for internal cross-border money transfers is faster and more efficient than SWIFT, the global messaging system used by over 11,000 financial institutions.
Unveiled this week, Wells Fargo Digital Cash uses R3’s Corda Enterprise software to handle internal book transfers, when funds move from a payer’s account to a payee’s account at the same bank.
“When we move money across the world and we need to exchange currencies, we have to go through third parties such as SWIFT and other banks,” said Lisa Frazier, head of the Innovation Group at Wells Fargo. “That’s a long process and every time there’s a connection with external parties, it takes time and energy and effort.”
Using the digital cash would allow the bank to move funds 20 hours a day, up from only six to nine hours, five days a week when it relies on wire transfers and systems like SWIFT, Frazier said.
She told CoinDesk:
“It’s faster than SWIFT, cheaper and definitely more efficient.”
Today, for internal book transfers between branches in different countries, the bank needs to use SWIFT. This is not the case for domestic internal book transfers.
The blockchain project, which will go into a pilot phase next year after a successful proof-of-concept, “will allow those locations to exchange digital cash among themselves,” Frazier said.
As with rival megabank JPMorgan’s JPM Coin, Wells Fargo’s digital cash will be backed 1-for-1 with the analog kind. “We will hold the fiat currency, so it’s a stablecoin, and we will issue digital cash tokens. These tokens are placed into digital wallets and then those tokens are able to be exchanged,” Frazier said.
Frazier said Wells Fargo has been avidly participating since 2016 in blockchain tests that she described as “external,” meaning other banks and financial institutions were involved. However, the bank has also been busy pursuing internal use cases for distributed ledger technology (DLT), she said.
“I think the surprise is, we have found a really solid internal application for DLT on our book transfers. By doing this we are streamlining the book transfer process and are reducing the use of intermediaries that can cause a delay in settlement. Therefore we are widening the operating window for clearing of FX wires cross-border,” she said.
The stablecoin project also happens to be the first project the bank has built using the paid-for version of R3’s DLT, which Wells Fargo has now licensed — with more to follow on the platform, the bank added.
SWIFT declined to comment, but the messaging system itself is collaborating with R3 on a number of projects, such as a proof of concept to connect the former’s gpi to the latter’s Corda to enable “off-ledger” payment settlement. The results of this PoC will be revealed at Sibos 2019. Corda Settler, the Corda Network’s open-source payments engine, has also been tested with the cryptocurrency XRP.
However, Wells Fargo scotched any suggestion the bank would be connecting its digital coins to anything outside its own internal payments systems.
“R3’s Corda Enterprise was selected as the platform for our first enterprise DLT network, not CordaSettler,” said a spokesman for the bank. “Wells Fargo Digital Cash is an internal settlement service which will not be associated or connected to any other potential digital cash solutions emerging in the financial services markets today.”
Alex Lipton, a former bank executive, trader and quant, said Wells Fargo’s coin is potentially very useful for simplifying the “bank’s byzantine internal processes,” but not something that will see much usage outside the bank and a handful of close partners.
“Large banks are so bad that they have to use SWIFT like everyone else, so in effect, they don’t differentiate between inside and outside of banks. So, a coin can help. But it is a sign of desperation,” said Lipton, now co-founder and chief technical officer at fintech firm Sila.
Another JPM Coin?
At first blush, Well Fargo’s digital cash may appear to be another JPM Coin, the much-vaunted technology built using Quorum, the privacy-centric version of ethereum developed by JPMorgan.
Although initially intended for payments between clients, the coin will eventually be used to digitally fund enterprise blockchain projects such as on-chain debt issuances, JPMorgan executives have said.
JPM also boasts 344 banks on its Interbank Information Network (IIN), which uses Quorum to eradicate pain points in the way information circulates within foreign correspondent banking.
Frazier played down any similarities between JPM Coin and Wells Fargo Digital Cash. “I think they are very different,” she said.
Wells Fargo is not a member of IIN, but Frazier hinted at a long-term plan for interoperability.
“Eventually in the future, there will be interoperable networks. As these emerging technologies come out of a nascent stage all kinds of things can happen.”
Messaging app LINE has officially launched a cryptocurrency exchange service for its 80 million users based in Japan, days after the platform received final regulatory approval.
The Shinjuku-based messaging provider, which is 73.36-percent owned by South Korea’s Naver, said in a statement on Tuesday that the new exchange, dubbed Bitmax, is now live with trading of five crypto assets: bitcoin (BTC), ethereum (ETH), ripple (XRP), bitcoin cash (BCH) and litecoin (LTC).
According to the statement, the service was introduced in stages from 3 p.m. Japan time on Tuesday and is available first on Android devices. It can be accessed via the wallet tab on the LINE mobile app and is also integrated with LINE Pay to provide an easier Japanese yen fiat on-ramp process.
LINE said in the announcement it currently has 81 million monthly active users in Japan and 164 million globally. It operates the crypto exchange through LVC Corporation, a subsidiary, which was awarded a cryptocurrency exchange license by Japan’s Financial Services Agency on Sept. 6.
BITMAX is available to residents of Japan with a LINE account. No fees are charged for trading, though a charge of 108 yen will be applied for deposits and withdrawals.
In terms of security, LINE said it utilizes a wallet developed by Palo Alto-based BitGo to segregate customer assets and store assets in a cold wallet, which is itself managed by a dedicated team.
A strict KYC process is in place for new customers. Applicants can register their account with the app using an ID card and photographic capture, with a registered bank account and an ID or by mail.
The new service will run separately from the company’s Singapore-based Bitbox, which has been in operation since July 2018 but excludes residents of Japan and the U.S.Jinhee Lee, Chief Innovation & Product Officer, at LINE’s unblock corp via CoinDesk archives
The U.S. Commodity Futures Trading Commission (CFTC) has just named Coinbase vice president Dorothy DeWitt as its new market supervisor.
CFTC Chairman Heath Tarbert announced in a press release Tuesday that DeWitt, who is also the exchange’s general counsel for business lines and markets, will be the new director of the Division of Market Oversight (DMO), the group responsible for overseeing derivatives platforms and products, including the young market for bitcoin futures.
DeWitt has also spent time at Citadel Securities, S&P Global and Davis Polk & Wardwell, and has previously been a portfolio manager.
Her new role will see her evaluating and potentially approving new bitcoin derivatives products in the U.S. DMO has examined CME, Cboe and Bakkt’s various bitcoin futures proposals in the past.
She succeeds former DMO director Amir Zaidi, who oversaw the first bitcoin futures contracts as they entered the crypto space in late 2017.
In a statement, Tarbert thanked Zaidi “for his more than nine years of service at the CFTC,” saying:
“[DeWitt] brings to the CFTC more than 20 years of private sector experience in the financial services and legal fields. Her strong investment, risk, legal, and compliance background and familiarity with distributed ledger technology, including crypto assets, will be invaluable as the agency looks to develop a holistic approach to regulating 21st century commodities.”
Former DMO director Vince McGonagle has been serving as acting director of the division during the transition period.
Tarbert first took office in July 2019, after Congress confirmed him in June. The former Treasury Department official succeeded Christopher Giancarlo, who was famously dubbed “Crypto Dad” after advocating for a “do no harm” approach to regulating the crypto space before Congress.
Since leaving the agency, Giancarlo has joined the advisory board to the Chamber of Digital Commerce, a trade association focused on blockchain and cryptocurrency policy in Washington D.C.
Blockchain startup SpaceChain has won a 60,000 euro grant from the European Space Agency (ESA) to investigate use-cases for their satellite-based blockchain wallet system.
Announced today by the company, the grant by the ESA’s “kick-start activities” fund bolsters SpaceChain’s efforts to put a hyper-secure, multi-signature, distributed satellite network in orbit. The company has already flight-tested blockchain nodes in space.
The tech uses a three signature system, with two ground-based signatures and a third in orbit, on the satellite. Each transaction requires at least two of the three signatures to complete.
Zee Zheng, SpaceChain’s co-founder and CEO, told CoinDesk that his satellite-based nodes are far more secure than terrestrial networks processing on the open internet with data and protocols uplinking directly to the satellite.
“We don’t need internet access to perform this kind of transaction,” Zheng said, “which eliminates a lot of potential risks for hacking.”
“We are looking at a market that last year saw $1 billion in crypto stolen. That will be much much more difficult for hackers [on our system],” he added.
Zheng called his grant from the ESA an opportunity for the crypto community to learn more about blockchain space applications. He noted developers’ high interest in the security upside.
“We want to use this opportunity to showcase how space can benefit the blockchain space,” Zheng said. He added SpaceChain plans to launch three times over the next 18 months.
A blockchain startup for ethical supply chain management just raised $4 million in seed money.
OpenSC, a joint venture of the Boston Consulting Group and environmental protection group the World Wide Fund, announced today $4 million in seed funding from investor Christian Wenger. OpenSC uses blockchain technology to track goods for ethical malpractice.
The capital will be used to further develop blockchain-based supply chains such as overfishing and human rights violations, incoming OpenSC CEO Markus Mutz told CoinDesk. With the funding, Mutz left his role as a director at BCG Digital Ventures to be the full-time CEO of OpenSC.
The funding round came on the heels of its international pilot project with Austral Fisheries, one of the world’s largest seafood companies. OpenSC helps Austral monitor the fishing process of its Patagonian Toothfish — more commonly known as the Chilean sea bass.
The fishery company collects data from fishing boats’ GPS and put the fishing locations in the blockchain platform through an automated algorithm.
Retailers and customers throughout the supply chain can learn where the fish are caught and who catches them by scanning the QR code on the products, Mutz said. The blockchain platform will increase transparency between suppliers and customers throughout a supply chain so that it will be easier to monitor the whole process.
Mutz said the company will also work with Nestlé to trace the food company’s milk products from farmers in New Zealand to customers in Middle East and palm oil sourced in the Americas.
The Nestlé project will apply OpenSC’s blockchain technologies to a large-scale supply chain, which could serve as a model for other big companies, he said.
Cryptocurrency exchange Binance, the world’s largest by trading volume, has made a strategic investment in Chinese media and data source Mars Finance.
According to a report from Bloomberg citing a press release, the investment amount was not disclosed, but values the company at $200 million.
Aside from Binance, which reportedly made its first strategic investment in China with the round, Beijing-based Mars Finance was also backed by Ceyuan Ventures and Matrixport, a financial services startup founded by co-founder of bitcoin mining firm Bitmain, Jihan Wu.
Discussing the investment, Binance CEO Changpeng Zhao said:
“We have large respect for data, news and research firms which support the positive growth of the blockchain industry. We will continue to pursue strategic investment opportunities in our mission to bring crypto further mainstream, increase adoption and accessibility, and help the industry grow sustainably.”
The media site was founded by tech entrepreneur Wang Feng in 2018, Bloomberg says, and has previously raised two funding rounds from investors including IDG Capital and the venture subsidiaries of OKCoin and Huobi.
The firm’s website indicates it also offers market reports and a VC fund called Consensus Lab (no relation to CoinDesk Consensus).
The news comes as Binance’s new U.S. platform prepares to onboard customers in preparation for live trading.
Binance.US said last week that it will open registration and deposits Wednesday, Sept. 18, after which it will roll out a number of Binance products across the U.S.
Native support for bitcoin cash is coming to HTC’s blockchain phone.
Today, HTC announced its partnership with Bitcoin.com to add bitcoin cash support for its Exodus 1 blockchain phone. The new function will come with Bitcoin.com’s preinstalled wallet and be rolled into the Exodus 1 software update. Bitcoin.com will also sell the Exodus 1 and all future versions.
In a statement, HTC’s chief decentralization officer Phil Chen called the update a natural next step for the phone. “The Zion Vault is happy to support BCH natively in hardware so security goes hand-in-hand in the BCH blockchain as an alternative to dominant payment rails and platforms,” he said.
With the partnership, Zion Vault, the phone’s key management software can now secure BCH transfers by signing off on transactions.
First announced at Consenses 2018, HTC has regularly updated the Exodus 1 with new blockchain features. An update in May allowed users to directly swap cryptocurrencies within the Zion Vault wallet.
Exodus 1 may soon be replaced by HTC’s second-generation blockchain phone: the newer, cheaper Exodus 1s. Chen has previously told CoinDesk that the $200-$300 phone would ship in the third quarter.
The computing power dedicated to mining bitcoin has hit yet another new high, suggesting that more than 600,000 powerful new machines may have come online in the last three months.
According to data from crypto mining pool BTC.com, bitcoin’s two-week average hash rate has crossed another major threshold, reaching 85 exahashes per second (EH/s) around 19:00 UTC last Friday. Meanwhile, mining difficulty also adjusted to a new record of nearly 12 trillion.
Notably, both figures have jumped 60 percent since June 14, the data shows.
Bitcoin’s mining difficulty – a measure of how hard it is to create a block of transactions – adjusts after 2,016 blocks, or roughly every two weeks. This is to ensure the time to produce a block remains around 10 minutes, even as the amount of hashing power, deployed by machines around the globe competing to win freshly minted bitcoins, fluctuates.
Several new models of application-specific integrated circuit (ASIC) miners hit the market over the summer, with an average hashing power around 55 tera hashes per second (TH/s).
Assuming all of the 35 EH/s of new hashing power added since mid-June came from these top-of-the-line models, a back-of-the-envelope calculation suggests that more than half a million such machines have connected to the bitcoin network. (1 EH/s =1 million TH/s)
These powerful ASIC miners, made by major manufacturers such as Bitmain, Canaan, InnoSilicon and MicroBT, are priced from $1,500 to $2,500 each. So if more than half a million of them were delivered, as estimated above, the leading miner makers could have made $1 billion in revenue over the past three months.
Bitcoin’s spiking hash rate and difficulty are in line with the soaring price since earlier this year, which led to increasing demand for mining equipment that has significantly outstripped supply. It’s also in part thanks to the rainy summer season in southwestern China which resulted in cheap, abundant hydroelectric power.
Further, there has also been a growing interest in Russia’s Eastern Siberia region, where the Brastsk hydropower station built in the Cold War era has been utilized to power mining farms that are estimated to account for almost 10 percent of the total computing power on the bitcoin network.
Miners in China estimated earlier this year that bitcoin’s average hash rate in the summer would break the level of 70 EH/s, which happened in August.
As such, major miner manufacturers have already sold out equipment that is due for shipment until the end of the year with customers placing pre-orders three months in advance.
TokenInsight, a startup that focuses on analysis of crypto trading and mining activities, said in a report published Friday that additional supplies of miners are expected to hit the market in the coming months.
“Following the drastic increase in bitcoin’s price, the bitcoin mining market saw significant inflation in Q2 2019. Most of the miners from various manufacturers were in serious shortage and pre-orders submitted in Q2 and Q3 are to be delivered by the end of the year,” the report states.
Therefore, the firm estimates mining difficulty will maintain its growth momentum to reach 15 trillion by the end of the year – with bitcoin’s average total hashing power crossing the threshold of 100 EH/s for the first time in its history.
Liquid, a second layer tech for bitcoin created by Blockstream, just onboarded another crypto partner.
The sidechain for faster BTC payments now has around 30 members, including Bitfinex, BITMex, OKCoin, and other exchanges, with the total of $900,000 moving around on the network, Blockstream’s chief strategy officer Samson Mow told CoinDesk.
Now Canadian bitcoin exchange Bull Bitcoin is joining the platform. The new partnership will allow the users of Bull Bitcoin to interact with other exchanges on the network.
Tentatively scheduled on the early 2020, the integration of Liquid tech into Bull Bitcoin’s operations will require some effort from the exchange’s tech team, Bull Bitcoin CEO Francis Pouliot said.
“We’re making sure we have this backup layer. We want to make sure bitcoin succeeds, and this is our way to participate in strengthening the network,” Pouliot told CoinDesk.
As a part of the partnership, Bull Bitcoin is going to issue its own asset on the Liquid network: Canadian dollar-pegged token dubbed L-CAD, which is supposed to be used as the exchange’s voucher for buying bitcoin.
The popular inter-exchange settlement network, Liquid has collaborated with Canada-based bitcoin exchange, Bull Bitcoin turning its member score to nearly 30.
Based on the reports concerning the Bull Bitcoin partnership with Liquid Exchange Network, the investors using the Bull Bitcoin platform will now be open for interaction and communication with other popular exchange networks on Liquid’s sidechain.
The integration is tentatively scheduled to take place in the early phase of 2020. Bull Bitcoin CEO, Francis Pouliot stated that the collaboration would need some inputs from the technology arm of the exchange for the successful integration.
After a nine-month delay and $3.8 million of investment, an upstart manufacturer is ready to produce its first batch of powerful new machines for mining cryptocurrencies ethereum and ethereum classic.
Linzhi, based in Shenzhen, China, said Wednesday it had ordered 37 wafers from Taiwan Semiconductor Manufacturing Company, the main parts that will allow it to build about 200 application-specific integrated circuit (ASIC) miners.
These sample units will test whether the machines can mine as efficiently as they are designed to do using ethash, the proof-of-work algorithm used on ethereum and ethereum classic.
The testing units, if successful, would mark a major step toward mass production as Linzhi sets out to compete with makers of general-purpose computing chips, such as NVIDIA, as well as mining gear specialists Bitmain and InnoSilicon, which both make ASIC miners for the ethash algorithm.
Roughly five million ether (ETH), the native cryptocurrency on the ethereum network, is being mined every year, which, at its current price, is worth more than $800 million. Even for ethereum classic, which maintains the original ethereum ledger from before a hard fork in 2016, about nine million native ETC gets mined every year, worth more than $60 million.
Linzhi was founded in February 2018 by Chen Min, a former chip design head at Canaan Creative, maker of the Avalon bitcoin miner. Chen told CoinDesk the new company was completely self-funded with about $4 million as starting capital.
It announced the plan to produce ethash ASIC miners in September 2018 with an ambition to beat the efficiency of most existing equipment. Chen’s target specification for Linzhi’s ethash ASIC miner is set at 1400 mega hashes per second (MH/s) with an electricity consumption level of one kilowatt-hour.
To put those figures in perspective, NVIDIA’s GTX TitanV 8 card is now one of the most profitable piece of equipment on the ethash algorithm, able to compute 656 MH/s at an energy consumption level of 2.1 kWh, according to mining pool f2pool’s miner profitability index,
With ETH’s current price ($180) and network difficulty, as well as an electricity cost of $0.04 per kWh, each GTX TitanV 8 would bring home a daily profit of $7.35. Similarly, if one uses the same GTX TitanV 8 card to mine ETC, which has both a lower price and a lower mining difficulty than ETH, the daily profit would still be around $6.70.
The total computing power racing on ethereum and ethereum classic to compete for block rewards and to secure the two networks is around 160 and 13 tera hashes per second (TH/s), respectively.
Since the announcement of its plan, Linzhi has spent almost all of its initial capital on research and development of the chip design, the operations of its dozen-person team, and the order of the first batch of wafers, to bet the sample testing units will deliver the intended mining power.
Linzhi previously said it was aiming to order the first batch of wafers around December in order to have samples ready in April and mass production in June.
Speaking of the delay, the company said:
“We underestimated the complexity of the chip and how long it would take to grow the team and make the company functional. We are cautiously optimistic that we can just move forward the rest of the schedule, which would mean 12/2019 for sample machines and 02/2020 for mass production.”
One possible risk for the business is that the ethereum community has previously voted to activate the so-called ProgPow algorithm in order to remove the edge maintained by large miners that can afford expensive, specialized chips, although the timing for that switch is not yet decided. (Eventually, ethereum developers want to transition from proof-of-work to proof-of-stake, which would eliminate mining altogether.)
When asked if Linzhi has any Plan B if the switch happens, Chen said the company is, in fact, more active in the ETC community, adding:
“Our plan A is to focus on ETC mining. So if ETH will still be an option, that’s something good to have. In the ethereum community, the ProgPow plan still has some uncertainty. For the time being, we don’t see it as a market that we will obtain, so I don’t really care that much.”
In an arguably counterintuitive move, Chen said the company plans to adopt what it calls a “reverse discount” strategy when it starts to take in pre-orders if sample units prove to be successful. That would mean the more you buy, the more you are likely going to pay.
The reason is to discourage any single entity from buying too many machines and thus concentrating power over the network.
While Linzhi has not yet decided on final pricing for each unit to be sold at pre-orders, it says the goal is to achieve a payback period of four months for individual miners with a relatively small number of orders.
“This is our efforts and contribution to the idea of decentralization,” Chen said, concluding:
“Our sales will go to developers and community first, with a focus on geographical distribution, and potentially with a malus [reverse discount] for large orders. This means that small orders by individuals would be priced to hit the 4 month [return of investment] and larger orders would pay more.”
Payments giant Mastercard is to develop a blockchain-powered cross-border payments platform in partnership with enterprise-focused blockchain firm R3.
In an announcement on Wednesday, Mastercard said the two firms have inked a deal to “develop and pilot” the payments solution. It will initially be aimed at connecting faster payments schemes and banks backed by Mastercard’s clearing and settlement network.
The platform will be built on Corda Enterprise, the commercial version of the platform, as opposed to the open-source Corda Network, R3 told CoinDesk.
The partnership is planned to merge R3’s expertise at developing blockchain solutions with Mastercard’s existing payment systems and network. Ultimately, the firms hope the new platform will help tackle industry issues such as costly payments processing, liquidity management and a paucity of standardization and connectivity between banks and domestic clearing systems.
R3 CEO David E. Rutter said:
“All institutions – large or small – rely on the ability to send and receive payments, but all too often the technology they rely upon is cumbersome and expensive. Cross-border payments can be a particular pain point. Corda was designed specifically for enterprise use cases such as this, and we look forward supporting Mastercard in bringing blockchain-enabled payments businesses across the globe.”
Citing its July acquisition of international payments firm Transfast as a boost to its network, Mastercard said the deal to utilize Corda Enterprise will further expand its capabilities in the payments arena.
The news of the partnership also comes just days after Mastercard joined the Marco Polo trade finance blockchain network founded by R3 and TradeIX.
Peter Klein, executive vice president of new payment platforms at Mastercard, said in the announcement:
“Developing a new and better cross-border B2B payments solution by improving worldwide connectivity in the account-to-account space is central to Mastercard’s ambition. Our goal is to deliver global payment infrastructure choice and connectivity as demonstrated through our recent strategic acquisitions and partnerships, including our relationship with R3.
The Hyperledger technical steering committee (TSC) has elected another IBM official as its chair amid controversy over the tech giant’s increased representation on the panel.
Arnaud Le Hors, a senior technical staff member for blockchain and web open technologies at IBM, succeeds Dan Middelton, a principal engineer with Intel, according to an email sent to the TSC mailing list Wednesday.
“I’m happy to have the chair role in good hands,” Middelton wrote to the list.
A year ago Middelton replaced Christopher Ferris, CTO of open technology at IBM, who had chaired the TSC since 2016.
During the last year, the TSC launched the Diversity, Civility and Inclusion working group, which focuses on diversity broadly but is more focused on demographic rather than corporate diversity, Middelton told CoinDesk in an email.
Over the same period, the consortium has seen more collaboration between projects, like Hyperledger Ursa, a tool that was worked on by developers from Hyperledger’s Indy, Sawtooth and Fabric projects.
When it comes to influencing Hyperledger, code is king, Middleton added.
“The real influence in an open source community like this is contributions,” Middelton said. “I sort of wish that all the effort that went into discussions on the election and all the effort that will go into coming up with complex election rules just went to actual technical development.”
Neither IBM nor Hyperledger was immediately available for comment.
The Hyperledger TSC is responsible for creating working groups to focus on technical issues, approving projects and reviewing updates.
Last week, Hyperledger code contributors elected the TSC for 2019-2020, and the number of IBM employees on the committee doubled, giving Big Blue 6 of the 11 seats. This rekindled concerns that the company has an outsized influence over Hyperledger, the Linux Foundation’s umbrella group for open-source enterprise blockchain projects.
In response, executive director Brian Behlendorf suggested that the TSC discuss increasing the size of the committee with the governing board or for “one time add of a set of new TSC members, so that this greater representation can happen in the current TSC team.”
Those suggestions are already being considered by the new chair. On Thursday, Le Hors posted a proposal on the Hyperledger TSC agenda page for the next 4 candidates in line from the last election to join the current term.
“All those will be topics taken up by the TSC in what appears to be pretty short order,” Behlendorf told CoinDesk in an email.
Le Hors has worked nearly 20 years at IBM and has been involved with Hyperledger since its launch, according to his bio. He served on the 2018-19 TSC and contributes to Fabric, the oldest Hyperledger platform and the basis for the blockchain Walmart uses to track food through its supply chain.
Many bitcoiners are former gold bugs who believe in “hard money,” so one crypto company is hoping digitized gold will attract more traders.
Paxos, the New York-based exchange and stablecoin issuer, just launched a gold-backed crypto asset called Pax Gold (PAXG), with each ethereum-based token encapsulating the legal title to a physical bar of gold stored in the Brink’s London vault. Pax Gold has been approved by the New York Department of Financial Services.
“It’s not a representation of the commodity, it’s actual legal title to it,” Paxos CEO Chad Cascarilla told CoinDesk. “This is the exact point of the blockchain, the exact premise, that you can now make [assets] easily moveable and divisible and not be tied to a manual, physical process.”
Each token costs the same as an ounce of gold and can be redeemed for a physical bar at partnering institutions such as Bullion Exchanges in New York. Cascarilla said Paxos will expand its list of global partners from the traditional commodities industry to ensure users can claim real gold even if they’re not in London or New York. Plus, the crypto loan startup SALT now offers PAXG-backed loans as well, available in fiat or stablecoins such as PAX, TrueUSD or USDC.
“We’re going to do more products like this where we are taking real-world assets and putting them on the blockchain,” Cascarilla said.
Still, it remains to be seen whether tokenized gold will appeal to crypto enthusiasts. Messari co-founder Dan McArdle told CoinDesk that assets issued by and custodied with centralized entities don’t rival bitcoin’s role as “digital gold.”
“Bitcoin achieves all of gold’s relevant properties, plus a lot more, and is just better gold for the modern era,” McArdle said. “Bitcoin achieves its properties precisely because it has no centralized or federated anchors to the physical world. You simply can’t get the trustless/uncensorable properties of bitcoin if some relatively small set of people/entities has to manage physical objects represented on a blockchain.”
Paxos will need to find an audience of gold traders who are interested in crypto beyond bitcoin, as traditionalists on both sides are wary of tokens.
Bitcoin skeptics like Roy Sebag, founder of the precious metals custodian Goldmoney, don’t believe a self-custodied, relatively fungible cryptocurrency would bring new and compliant use cases to the broader gold market. It still requires a know-your-customer process.
“There’s zero value being added in terms of a decentralized blockchain,” Sebag said. “A closed system that is permissioned would be fine. We’ve already been doing that for five years.”
Indeed, the World Gold Council estimated gold-backed financial products like exchange-traded funds accounted for nearly $100 billion of the global market holdings in 2018. Paxos’ commodities trading platform, Post-Trade, secured a chunk of that pie by processing precious metal trades since July 2018. Now, with Pax Gold, retail investors will be able to participate in a broader range of digital gold trades beyond institutional platforms.
“We’re acting at that gateway, as a trusted holder of the assets, but also has trusted verifier of participants,” Cascarilla said. “Just like our Pax stablecoin, it’s audited.”
For traders who might want to buy gold on-the-go and then pick it up in another location, Cascarilla believes Pax Gold could offer a regulated alternative to physical ownership.
“You can own that gold but you don’t have to pay a custody fee, and you can send it around the world 24 hours a day, 7 days a week,” he said. “This is a groundbreaking product in the history of gold.”
Tyler and Cameron Winklevoss’ Gemini crypto exchange just added off-chain and over the counter trade negotiations on its platform.
The features come via Gemini Clearing, an electronic settlement system. According to the firm’s blog posting, Gemini Clearing allows Gemini accounts to negotiate and settle trades between Gemini accounts.
“Such trades can either be arranged bilaterally between two parties or brokered via a third party,” the company said. “Gemini Clearing provides regulated clearing and settlement services for such pre-arranged trades, which helps to ensure timely settlement and mitigate counterparty risk.”
In essence, Gemini Clearing acts as an escrow service for cryptocurrency traders looking to take advantage of Gemini’s customer services.
To be clear, Gemini does not have an OTC desk but rather supports OTC desk trades with the new product.
Based out of New York, Gemini offers six cryptocurrency products including bitcoin, litecoin, bitcoin cash, ethereum, zcash, and the exchange’s stablecoin, the gemini dollar.
Gemini says the new product falls under the exchange’s know your customer/anti-money laundering (KYC/AML) policies, which it holds as the industry standard.
Samsung Electronics is releasing a new edition of its Galaxy Note 10 smartphone that will come with a pre-installed cryptocurrency wallet in its bid to boost adoption of blockchain tech.
According to a Wall Street Journal article on Thursday, the new product is a variant of Samsung’s flagship product Galaxy Note 10 but marketed as a “KlaytnPhone,” named after a blockchain network developed by messaging giant Kakao.
To be sold on Thursday only in South Korea, the new edition’s hardware specification will not differ from existing Galaxy Note 10, but will come with blockchain apps and a crypto wallet, the report said. Buyers of KlaytnPhones will also obtain a certain amount of the Klaytn blockchain’s native cryptocurrency Klay.
While blockchain apps on the Klaytn network are now available for non-Samsung phones via Google’s Android system, only the Klaytn edition will support full-scale transactions on the Klaytn network.
The KlaytnPhone is another step taken by Samsung to widen its efforts on boosting cryptocurrency adoption. According to the report, Samsung has joined Ground X to launch the edition, a firm set up by Kakao to develop the Klaytn network.
While the Klaytn network has been live since June this year, its native crypto Klay has not yet been listed on exchanges for trading.
Samsung first revealed a crypto-friendly flagship smartphone in March this year, the Galaxy S10, which comes with digital wallets that support cryptocurrencies like ether (ETH) and ethereum-based ERC-20 tokens.
The People’s Bank of China (PBoC) is charging full speed ahead with its digital currency plans, hoping to beat Facebook’s Libra to market.
A dedicated team from the central bank’s Digital Currency Research Lab is now developing the system in a closed-door environment, away from the PBoC’s downtown Beijing headquarters, a person close to the bank told CoinDesk.
The team has been working in this separate location since early summer so they could fully concentrate on the project, this person said.
The work has been expedited as Facebook unveiled in June its vision for Libra, a global cryptocurrency to facilitate payments, the source added.
The Libra announcement rattled governments around the world, spurring Congressional hearings in the United States and bold new thinking by central bankers such as Bank of England Governor Mark Carney.
Much about the PBoC’s project remains under wraps, and there have been conflicting accounts about the timetable and the degree of involvement by major Chinese companies.
According to a Sept. 4 report by state-owned media outlet China Daily, “closed-loop testing” has begun for the central bank digital currency (CBDC) to simulate payment scenarios involving “some commercial and non-government institutions.”
If things go well, the project could launch sooner than Libra, which is targeting the first half of 2020 for its debut, China Daily said in an earlier report.
Forbes reported last week that China’s big four state-owned commercial banks, as well as fintech giants Alibaba, Tencent, Union Pay, and an unnamed company, will be the first batch of organizations to receive the CBDC. It could be launched as soon as November, Forbes said
The four commercial banking giants are Bank of China, China Construction Bank, Agricultural Bank of China, and the Industrial and Commercial Bank of China, which is one of the largest banks in the world by total assets.
But hours following Forbes’ report, Chinese publications Tencent News and Sina said the timeline and scope of the eight institutions were “inaccurate speculations,” citing people close to the central bank.
And yet, a second source who is familiar with the PBoC’s CBDC efforts told CoinDesk that organizations mentioned in the Forbes report have indeed participated in the development of the CBDC initiative. But the source would not say whether all or only some of the mentioned institutions will be receiving the state-backed digital yuan upon the launch.
A third person who works for one of the mentioned institutions said there’s such work ongoing inside his organization but it’s unclear what the actual contribution is since the details are confidential due to non-disclosure agreements. The mentioned organizations did not respond to CoinDesk’s request for comment.
Whenever the CBDC launches, the central bank may not roll it out nationwide on Day One.
Chinese state-owned publication Global Times said last week, citing industry sources familiar with the matter, that the system may be launched in Shenzhen first to test the waters. There, local companies including Tencent and state-owned financial institutions are researching technical frameworks to support the development of the CBDC.
The PBoC’s Digital Currency Research Lab previously launched an entity called Shenzhen Fintech Research Institute with Shenzhen’s local government and financial regulator to undertake fintech and digital currency-related projects.
The institute has also been on a hiring spree with job advertisements looking for various technical experts including blockchain architects and cryptography specialists to be based in Shenzhen and Beijing.
The PBoC’s Digital Currency Research Lab has filed more than 50 patent applications to detail the potential design of the state-backed digital yuan.
CoinDesk reported previously that based on the patent filings, the envisioned CBDC may only resemble a cryptocurrency at a surface level as a peer-to-peer transaction system but will strip off most cryptocurrencies’ anonymity and decentralization features.
Rainforest Foundation US is a New York-based, non-profit NGO working in Central and South America, which is now hoping to support anti-deforestation efforts with crypto and blockchain tech.
Deforestation and fires in the Brazilian Amazon
On Sept. 4, the Rainforest Foundation reached out to the crypto and blockchain community to ask for their support to fight against deforestation and forest fires in Brazil. The post on the foundation’s website states:
“Since Bolsonaro took office in January, deforestation in the Brazilian Amazon is up 75% and forest fires in the Brazilian Amazon have doubled compared to the past year. As guardians of our rainforests, its animals and its people, we are working with The Giving Block to form a coalition of crypto sponsors, donors and media partners who will help stop this devastation.”
Using blockchain to assure transparency
The Rainforest Foundation, which has musician Sting as one of their founders, is currently working on a blockchain pilot to assure continued transparency, which will allow donors to track the work done by the foundation in the Amazon rainforest and reward local communities who are protecting their forests with crypto.
The foundation is also researching the use of smart contracts to stop illegal logging, land trafficking and safeguard forests from gold mining.
Suzanne Pelletier, executive director at the Rainforest Foundation, said that the dire situation in the Brazilian rainforest has pushed them to come up with innovative solutions. She added:
“Business as usual has gotten us to this point. Philanthropy as usual won’t get us out. We need innovative solutions, and no one is more innovative than cryptocurrency users.”
Crypto and charity go hand in hand
Cointelegraph has previously reported that crypto and blockchain technology are increasingly being applied to support a wide variety of charitable organizations. In the wake of Hurricane Dorian, a blockchain company headquartered in the Bahamas is asking the crypto and blockchain communities to help them bring relief to the hurricane victims.
Banking and financial services giant HSBC has completed the first yuan-denominated letter of credit transaction on a blockchain using the Voltron trade finance platform.
As Reuters reported on Sept. 2, HSBC conducted the first blockchain-based yuan-denominated letter of credit transaction deploying R3’s Corda-powered Voltron platform. In the cross-border transaction, Hong Kong-based electronics manufacturer MTC Electronics exported a shipment of LCD products to its parent firm Shenzhen MTC.
24 hours instead of ten days
The blockchain platform ostensibly enabled the parties to exchange electronic documents in 24 hours instead of the regular five to 10 days required for traditional document exchanges. Commenting on the deal, Ajay Sharma, the regional head of global trade and receivables finance for Asia-Pacific at HSBC, said:
“We are hoping that we will have something by end of the year, maybe the first quarter of next year, where will we know from Voltron what it costs, at which point, a lot of banks who might be sitting on the sidelines will be able to make a decision.”
Streamlining trade finance documents
R3 in collaboration with eight banks — including Bangkok Bank, BNP Paribas, CTBC Holding, HSBC, ING, NatWest, SEB and Standard Chartered — initially launched Voltron last October in a bid to digitize trade finance documents and attract more member banks and companies.
In August, London-based bank and financial services firm Standard Chartered completed its first cross-border blockchain letter of credit transaction in the oil industry with Thai state-owned oil giant PTT Group.
The pilot consisted of digitizing and simplifying the end-to-end exchange of information between all parties in a shipment of an oil product from Thailand to Singapore.
Binance has announced the acquisition of crypto exchange JEX in a bid to boost its crypto derivatives offerings for pro traders.
Seychelles-registered JEX offers spot and derivatives (including options and futures) trading in cryptocurrencies such as bitcoin and ether.
Going forward under Binance management, the derivatives exchange will be known as Binance JEX. JEX offers its own token, also called JEX, which will continue to be guided by its existing foundation, Binance said.
Binance plans to first distribute the tokens to users through “marketing activities and community incentives” before ultimately clawing back and burning them via means including trading commissions, according to the announcement.
Binance did not disclose the terms of the acquisition deal.
“JEX has a seasoned developer team with proven experience in cryptoasset product development. JEX has developed solid derivatives product offerings including perpetual contracts and options, which are aligned with Binance’s product roadmaps in the cryptoasset derivatives market,” said Binance co-founder Yi He.
Just yesterday, Binance announced that it had made two testnets for its planned futures platform available for user testing, with competitions to encourage user participation before a live launch.
Bitcoin (BTC) is flashing green at press time, while its share of the cryptocurrency market has reached at 30-month highs above 70 percent.
As of writing, the cryptocurrency is trading at $10,350 on Bitstamp – up 6 percent on a 24-hour basis – after hitting an eight-day high of $10,506 earlier today. At that level, BTC was up 12.7 percent from the one-month low of $9,320 hit on Aug. 29.
Over the last nine weeks, BTC has consistently found takers in the range of $9,000–$10,000. The resulting recovery rallies, however, ended up creating lower highs – a sign of bull market exhaustion – as seen in the chart below.
- Bitcoin’s price recovery from the Aug. 29 low of $9,320 is backed by an uptick in the dominance rate to 30-month highs.
- Weak trading volumes, however, indicate the recovery could be short-lived and a fall back to $9,750 could be in the offing in the next day or two. Weekly chart indicators continue to call a bearish move.
- A high-volume UTC close above the bearish lower high of $10,956 (Aug. 20 high) is needed to revive the short-term bullish outlook.
- A weekly close (Sunday, UTC) above $12,000 is needed for full bull revival.
The question now is whether the latest recovery from sub-$10,000 levels will invalidate the bearish lower-highs setup with a move above $10,956.
The gains seen in the last four days look sustainable and could be extended further, as BTC’s dominance rate – the cryptocurrency’s share of the total crypto market – has jumped to 70.10 percent, the highest level since March 2017, according to CoinMarketCap.
The gauge stood at 69 percent on Aug. 29, when BTC’s price slipped to one-month lows below $9,400.
Many observers consider price gains sustainable if they are backed by a rise in the dominance rate, as discussed last month. The shift indicates money is being poured into BTC for the long haul and not to fund purchases of alternative cryptocurrencies.
Trading volumes, however, tell another story, and suggest the recovery seen in the last four days could be short-lived.
The green bars (buying volumes) seen in the last four days on the hourly chart (above left) are smaller compared to the red bars (selling volumes) seen during bitcoin’s drop to one-month lows on Aug.29.
Buying volumes only ticked up slightly in the 60 minutes to 21:00 UTC yesterday. During that time frame, BTC rose from $10,200 to $10,470. Further, Sunday’s green bar (above right) is significantly smaller than those observed during previous breakouts above $10,000 (marked by arrows).
Put simply, the price bounce seen in the last four days lacks substance and a pullback, possibly to $9,750. could be in the offing in the next day or two.
The outlook as per the daily chart would turn bullish if prices print a UTC close above $10,956 on high buying volumes. That would open the doors to $12,000
The bitcoin bulls have failed four times in the last 10 weeks to secure a weekly close (Sunday, UTC) above $12,000. Meanwhile, the sellers have failed persistently failed to keep prices below $9,500.
A downside break looks likely, as key indicators have turned bearish, including a bearish crossover of 5- and 10-week moving averages.
The moving average convergence divergence (MACD) histogram has also dropped below zero for the first time since February, while the Chaikin money flow, which incorporates both prices and trading volumes, has slipped to a 4.5-month low of 0.10, a sign of weakening bullish pressures.
Argentina has reimposed capital controls, limiting citizens’ and businesses’ freedom to buy foreign currency.
As Bloomberg reported on Sep. 1, the increasingly troubled South American nation took the step as the Argentine peso (ARS) suffers overwhelming losses against major fiat currenciessuch as the U.S. dollar.
Argentina puts $10K limit on dollar access
Argentina has shown an affinity for Bitcoin (BTC) in recent times, with trade volumes accelerating as uncertainty around the economy grew. Last month, a premium appeared on the country’s cryptocurrency exchanges.
Now, access to hard currency is restricted to just $10,000 for individuals looking to dump ARS on the market, despite its exchange rate falling 34% in USD terms since Aug. 2.
Demand for Bitcoin, a cross-border asset which is impossible to control, should therefore increase further, some suspect.
“Buy Bitcoin,” cryptocurrency-focused attorney Preston Byrne tweeted following the news.
Draper may force Bitcoin switch
Argentina’s economic woes may not match those of Venezuela, yet Bitcoin advocates appeared to preempt the crisis months beforehand.
Should Draper win, he demanded Argentina shun the peso altogether, adopting Bitcoin as its new official state currency.
“That would be a perfect decision, as there’s a lack of confidence in this coin,” he reportedly commented at the time of the meeting in March.
Calibra, a digital currency wallet built by Facebook, is beefing up its compliance team as the company tries to convince U.S. and European regulators that the social media giant’s Libra project poses no legal threat. Now it’s bringing that conviction to the fore by hiring for a new compliance team to manage the many legal pitfalls it will face.
For example, the company is looking for a specialist that will “lead the identification and analysis of our regulatory requirement and create policies, procedures and controls to ensure Calibra is fully compliant with all Sanctions requirements.” The job posting appeared on Facebook’s career website overnight.
The sanctions lead will be working with Calibra’s legal and policy teams, interact with Facebook’s partners as well as the government agencies and regulators to ensure the product complies with worldwide requirements.
Facebook is also looking for additional brainpower to enforce Calibra’s general legal compliance efforts. One posting, for a Bank Secrecy Act and anti-money laundering (BSA/AML) leader, calls for a skilled banking executive to ensure Calibra’s policies “are designed to comply with BSA/AML related laws and regulations globally.”
Other related jobs currently open include head of compliance and a head of fraud. The career website is currently listing 27 jobs at Calibra alone, among the 47 jobs related to Facebook’s blockchain work.
All of these new hires aims to help Facebook engender trust in its system. The Libra project, announced earlier this summer with support from the world’s leading financial organizations, raised concerns worldwide. Congress grilled the project’s head David Marcus during two hearings, citing concerns for the project’s implications for the U.S. monetary system. They were also concerned with fraud prevention, and data privacy.
An anti-trust investigation into Calibra in the European Union did not make matters easier for Facebook. As now both the U.S. and E.U. authorities are concerned with the project’s scale and consequences, two out of 28 members of the Libra Association told FT they wanted out.
Facebook is also strengthening its lobbying efforts. As reported Tuesday morning, Facebook hired Washington D.C.-based lobbyist John Collins, previously the head of policy at Coinbase, to work on “issues related to blockchain policy.”
Earlier in August, Facebook also hired Susan Zook of Mason Street Consulting, who previously worked as an aid to Senator Mike Crapo (R-Idaho). Crapo chaired the Senate hearing dedicated to Libra on July 16.
California-based blockchain development firm Baton Systems has closed a $12 million Series A funding round led by Trinity Ventures.
According to a Ledger Insights report published Sept. 2, the new funding will be used to scale Baton Systems’ blockchain-powered bank-to-bank payment solution.
Interoperability with legacy systems
Baton Systems has reported that it already processes over $13 billion in payments implementing its solution for market participants and clearinghouse counterparties.
The firm’s blockchain platform is designed to be interoperable with legacy systems and doesn’t require clients to overhaul their existing business systems. As Baton Systems outlined in a statement:
“The Baton platform integrates with financial institutions’ current collateral and cash systems, leaving their existing business processes, systems, and ledgers in place.”
The blockchain software workflow coordinates between various systems and institutions to achieve transparent and efficient settlement of assets, together with instant reconciliation and reporting for all parties involved, the company has noted.
While using distributed ledger technology, the payments-focused solution does not involve cryptocurrencies or digital assets, Baton Systems’ CEO Arjun Jayaram emphasized.
According to the report, Baton Systems contributed to the Bank of England’s blockchain pilot for real-time gross settlement, which spurred the institution’s later decision to rebuild its RTFS system using the technology.
In a Barclays-hosted hackathon last year, Baton Systems won a prize for the best solution supporting the ISDA’s Common Domain Model (CDM) industry standard for derivatives. The firm later announced support for the CDM standard on its blockchain platform, allowing clients to efficiently connect their existing swaps and derivatives systems to the Baton platform.
Earlier this summer, the Italian Banking Association announced that Italy’s banks will integrate distributed ledger technology into internal settlement processes in a bid to improve transparency in interbank transactions and counterparty communication.