EOS DApps Lose Almost $1 Million to Hackers Over the Last Five Months

Decentralized apps (DApps) based on the EOS blockchain have lost up to $1 million to hacks since July, Chinese crypto media Blockchain Truth reports Tuesday, Dec. 4.

The report cites data by PeckShield, a blockchain security company that monitors different ecosystems. According to the report, the DApps on EOS have seen 27 breaches from July to late November, losing up to 400,000 EOS, or 8 million yuan. As of press time, the amount hacked was worth $800,000 according to the EOS price chart on CoinMarketCap.

Nonetheless, Guo Yonggang, an expert cited by Blockchain Truth, believes that most of the attacks on EOS DApps correlate with their vulnerabilities rather than with a bug in EOS itself. Yonggang also tends to think that similar attacks will become more frequent, as hackers are intensively seeking exposures in applications.

Moreover, the report states that the EOS blockchain has a significant amount of dormant accounts — around 200,000 of 500,000 in total. In addition, nearly 120,000 accounts are reportedly managed by groups, which means that 37 percent of the EOS blockchain is real active users.

As of press time, EOS’s price hovered around $2. Its total market capitalization is up to around $1.8 billion, which makes EOS the seventh largest cryptocurrency by market cap.

Last week, United States -based cryptocurrency exchange Coinbase announced it was exploring the option to list over 30 more cryptocurrencies, including major players such as Ripple (XRP), EOS and Cardano (ADA). However, the exchange noticed it would likely be a long-term process, and some assets might not be available in several countries.

As Cointelegraph reported in early December, the month has started with yet another debate around the EOS ecosystem, as Starteos — one of the official sanctioned nodes which can approve EOS transactions — appeared to publically offer its token holders financial rewards in return for their votes.

EOS had previously come under criticism for a lack of decentralization after some confirmed transactions allegedly from a phishe account were reversed this fall.

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Chinese Central Bank Governor Defines STOs as ‘Illegal Financial Activity in China’

The People’s Bank of China (PBoC), the country’s central bank, highlighted the illegality of Security Token Offerings (STOs) in the country, English-language local news outlet South China Morning Post (SCMP) reports Dec. 9.

A deputy governor of China’s central bank, Pan Gongsheng, reportedly told a summit in Beijing “that ‘illegal’ financing activities through STOs and ICOs [Initial Coin Offerings]  were still rampant in the mainland despite a nationwide clean-up of the cryptocurrency market last year.”

Gongsheng also said that if the government had not stepped in, the chaotic crypto market could have hurt the overall financial stability in China.

The central bank official pointed out that “the STO business that has surfaced recently is still essentially an illegal financial activity in China.” Gongsheng also reiterated the stance that cryptocurrencies are associated with crime:

“Virtual money has become an accomplice to all kinds of illegal and criminal activities.”

According to the article, Gongsheng noted that “most of the financing operations conducted through ICOs in China were suspected of being illegal fundraising, pyramid sales schemes and other financial fraud.”

The article also mentions that the chief of the Bureau of Financial Work, Huo Xuewen, warned against STOs about a week ago. He said:

“I want to warn those who are promoting STO fundraising in Beijing. Don’t do it in Beijing. You will be kicked out if you do it.”

On the other hand, blockchain adoption — the tech behind most cryptocurrencies — has been relatively embraced in China. As Cointelegraph recently reported, a Chinese Internet Court has started using blockchain to protect the intellectual property of online writers.

The legal basis of this development can be assumed to be the Chinese Supreme Court’s ruling from September, which established that blockchain can legally authenticate evidence.

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Huobi Opens First Russian Office in Partnership with State Bank’s Digital Tech Center

Singapore-based cryptocurrency exchange Huobi has officially launched its first branch in Russia on Thursday, Dec. 6, according to a press release shared with Cointelegraph today.

The Moscow-based exchange, dubbed Huobi Russia, is established in partnership with the state-owned Russian Development Bank’s (VEB) Digital Transformation Center and supported by Huobi’s regional exchange partnership program, Huobi Cloud.

The Center of Digital Transformation was created by VEB to promote blockchain and other crypto-related technologies, as its website states.

Back in September of this year, Huobi first joined Russia’s VEB Innovation Fund and became a resident of the Digital Transformation Center to share experience on crypto regulation, with the fund’s CEO claiming that Huobi’s expertise will assist in building a “legal basis that could compete with current promising jurisdictions.”

Speaking at a private event on Thursday, Huobi senior business director David Chen claimed that the launch of Huobi Russia will help to promote the company’s “leading technology and trading expertise to Russian users,” including such skills as “unmatched safety, stability, and user experience.”

Huobi Russia CEO Andrei Grachev also noted the increasing volumes of crypto trading in Russia, claiming that the volumes have “recently exceeded US $20 million in a single day,” regardless of the current bear market.

Russia’s VEB Innovation Fund, created in 2011, is reportedly the “first” Russian specialized center for support and development of disruptive technologies in the fields of management and the functioning of enterprises and government corporations, according to the center’s website.

The innovation center is exploring and implementing various blockchain projects, and houses more than 20 branches of major blockchain and tech companies such as the Ethereum Foundation, Bitcoin (BTC) tech company Bitfury, PricewaterhouseCoopers (PwC), and others.

Vladimir Demin, chairman of VEB’s Innovation Fund, claimed that Russia is “actively promoting the blockchain market,” with VEB willing to play an “important role as a leader in blockchain research and legislation,” as reported in the press release.

Founded in 1922, VEB bank, or “the state corporation Bank for Development and Foreign Economic Affairs,” is the first international bank of the Soviet Union, originally named Roskombank. The bank is responsible for developing the Russian economy, as well as managing Russia’s state debts and pension funds.

Other Russian banks have also shown an interest in blockchain technology.

Recently, major Russian state-backed bank Sberbank conducted an over-the-counter (OTC) monetary repurchase agreement based on blockchain technology. And earlier in November, the Russian branch of Raiffeisen Bank International teamed up with local state oil giant Gazprom Neft to issue a blockchain-enabled bank guarantee.

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Report: South Korean Crypto Exchanges Overtake Maltese Ones by Daily Trade Volume

Cryptocurrency exchanges registered in South Korea have overtaken their Maltese-registered counterparts by average daily trade volume in November. This is according to a report by cryptocurrency market data provider CryptoCompare, published Thursday, Dec. 6.

The November edition of CCCAGG, a monthly crypto exchange review published by CryptoCompare, shows that South Korean exchanges, including Bithumb, Coinone, Korbit and Upbit among others, registered a combined $1.4 billion of average daily trade volume. In the meantime, their competitors in Malta had only achieved $1.2 billion.

This is a significant change when compared to the October’s CCCAGG. According to CryptoCompare, back then the combined average daily trade volume of Maltese exchanges was at $1.4 billion, whereas South Korea was lagging behind with only $840 million, followed by Hong Kong’s $560 million.

The reason behind the switch might be that in November, Bithumb — a major South Korean exchange — allegedly overtook Binance as the top exchange in terms of daily trade volume. According to CryptoCompare, Bithumb averaged at $1.24 billion last month, while Binance has only reached $641 million.

It is important to note that while Bithumb’s daily trade volume has increased significantly in November, the number of its daily visitors has visibly decreased, as per CCCAGG. CryptoCompare’s own analysts have suggested that this could point to the adoption by the exchange of some incentive programs, such as “competitions, trans-fee mining, [and] rebate programs.”

In late October, South Korea’s main financial regulator, Financial Services Commission (FSC), officially allowed banks to service crypto exchanges, provided they implement adequate Anti-Money Laundering (AML) safeguards and apply Know Your Customer (KYC) checks.

As Cointelegraph reported later, the adoption of this stance by the FSC could provide an impetus to the development of the crypto industry in South Korea.

November in South Korea was also marked by the shutting down of a local crypto exchange Zeniex. A joint project by South Korea and China operating since May 2018, the exchange was mentioned in the FSC’s warning about investing in unauthorized crypto exchanges and Initial Coin Offerings (ICOs).

Also in November, Bithumb reportedly signed a deal with an American fintech crowdfunding platform SeriesOne in an effort to launch a securities token exchange in the United States.

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Top Exchange Binance Announces ‘SAFU’ Hackathon, Conference in Singapore

The world’s largest cryptocurrency exchange, Binance, has announced that it will host the company’s first conference, according to a press release shared with Cointelegraph Dec. 6.

Binance Blockchain Week is scheduled to be held in Singapore this January and is to include two major events –– the conference itself, along with a two-day “first-ever Binance SAFU (Secured Assets For Users) Hackathon,” according to the press release. As its name indicates, the hackathon reportedly focuses on developing blockchain-based tools for securing crypto assets.

Binance CEO Changpeng Zhao, better known as CZ in the industry, underlines that the firm has chosen Singapore as they consider it “the finance and technology hub of Asia.” CZ also added that the conference will feature the “most notable players and thought leaders in blockchain.”

Earlier this week, Binance announced plans to “help [the] advancement of the industry” by launching its own blockchain, “Binance Chain,” in the “coming months.”  The same day, the industry giant revealed a second preview of its forthcoming decentralized exchange (DEX), as a part of the newly announced Binance Chain initiative.

In October the crypto exchange also revealed the establishment of the Blockchain Charity Foundation (BCF) during the World Investment Forum, hosted by the U.N. Conference on Trade and Development (UNCTAD) in Geneva, Switzerland.

Just last month, BlockShow also held a blockchain conference in Singapore, which saw 2,800 attendees and hosted more than 50 speakers and panelists.

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R3 Adds Ripple as First Crypto for Its Universal Payments DApp

Enterprise blockchain software firm R3 has announced that ‘rival’ Ripple’s XRP token will be the first crypto supported on its new universal payment settlement platform, Finextra reports today, Dec. 5.

Dubbed “Corda Settler,” the new open source Corda-based decentralized application (CorDapp) reportedly allows payment obligations raised on the Corda blockchain to be settled via any parallel payment rail that supports cryptocurrencies or assets, or any ‘traditional’ payment rail that can provide “cryptographic proof of settlement.” A payment rail is a term for a payment platform or network that transfers money from one entity (a payer) to another (a payee).

After verifying the beneficiary’s account has been credited, the new CorDapp will automatically update the Corda ledger accordingly; a future version will reportedly support domestic deferred net settlement, as well as real-time gross settlement payments.

Richard Gendal Brown, Chief Technical Officer at R3 is quoted as saying that:

“The deployment of the Corda Settler and its support for XRP as the first settlement mechanism is an important step in showing how the powerful ecosystems cultivated by two of the of the world’s most influential crypto and blockchain communities can work together.”

Gendal Brown’s allusion to the positive development in cooperation between R3 and XRP refers to a year-long legal dispute over purported mutual breaches of agreement between Ripple Labs and R3 Consortium that was finally settled this September.

Gendal Brown added that the cooperation between the two industry giants “is the next logical step in showing how widespread acceptance and use of digital assets to transfer value and make payments can be achieved.”

As of press time, XRP is seeing losses amid a bleak crypto market picture, shedding 4 percent in value on the day, and 26 percent on the month, to trade at $0.34.

As reported just yesterday, Brazil’s largest private bank has this week partnered with United Kingdom bank Standard Chartered to create a Corda-based platform for small loans.

Also this month, SBI Ripple Asia announced a joint proof of concept (PoC) with the Japan Payment Card Consortium to combat fraud using the Corda platform.

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Binance to Launch Its Own Blockchain ‘Binance Chain’ in ‘Coming Months’

Binance, the world’s largest crypto exchange by trading volumes, will launch its own blockchain “Binance Chain” in the “coming months,” as the company revealed in a tweet on Dec. 4.

The new Binance-backed blockchain aims to provide a basis for creating new cryptocurrencies and Initial Coin Offering (ICO) tokens, as the company said in the tweet:

“Binance is pushing for blockchain adoption and doing many things to help advancement of the industry. E.g. we will have the Binance chain ready in the coming months, on which millions of projects can easily issue tokens.”

According to Forbes, Binance announced their plans during a recent private event in Singapore hosted by Forbes Asia. Speaking at the “Decrypting Blockchain for Business” event, Binance CEO Changpeng Zhao (CZ) stated that the new plans actually indicate an old vision of crypto, which will expectedly lead to increasing its adoption on a global scale.

In order to reach a fundamental “payment adoption increase,” CZ said that the company will be “pushing really hard into that space,” since their “original intent” hasn’t taken off “for some reason.”

Forbes’ author Michael del Castillo, who unveiled the recent news, commented on Twitter that the he expects that there will be “millions of coins and thousands of blockchains.”

On Nov. 8, CZ revealed that Binance’s business was still “very stable,” despite the recent exchange volume drop of around 50 percent, as well as the significant slump of crypto markets this year. The Binance CEO stated that while Binance possessed just 10 percent of the trading volumes they had in January 2018, the volumes are still higher than those of “two or three years ago,” and the business is “still profitable.”

Recently,  Binance has launched its fiat-to-crypto exchange in Uganda, enabling its customers to purchase two major cryptocurrencies  — Bitcoin (BTC) and Ethereum (ETH) — with local fiat currency Ugandan shillings (UGX).

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Japanese Exchange GMO Coin Set to Resume Bitcoin Cash Trading on ABC’s Chain

GMO Coin, a Japanese cryptocurrency exchange, has resumed Bitcoin Cash (BCH) trading with the BCHABC blockchain, Finance Magnates (FM) reports Dec. 3.

The exchange has reportedly “announced that it will be resuming BCH/JPY trading” tomorrow, Dec. 4. The trading had been “temporarily suspended” in an attempt “to avoid the disruption caused” by the recent Nov. 15 hard fork.

Finance Magnates writes that they “reached out to the company to enquire which of the two versions of Bitcoin Cash” the exchange will be listing. The spokesperson is quoted as answering “in our company, the one shown as BCH indicates a Bitcoin Cash called BCHABC.”

As Cointelegraph recently reported, it has been over a week since the Bitcoin Cash blockchain has split in two. BCHABC, the apparent winning faction, is the more “conservative” network, as Cointelegraph explained, which stands against bringing any radical changes to the BCH software.

In the end, the “battle” ended when Calvin Ayre, a supporter of the “losing” faction (BCH SV), called for a “permanent split” after declaring that BCH SV “no longer want[s] the name Bitcoin Cash.”

The same post also claimed that “Bitcoin SV is the original Bitcoin (BTC) not the original Bitcoin Cash” and accused other blockchains of having “tinkered it [Bitcoin] to death.”

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Hodler’s Digest, Nov. 26—Dec. 2: Satoshi Makes a New Friend, Buterin Gets Negative Over Centralized Blockchains

Coming every Sunday, the Hodler’s Digest will help you to track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.

Top Stories This Week

Nasdaq Notes Bitcoin Futures Could Launch in Quarter 1 2019, Bloomberg Reports

Major U.S. stock exchange Nasdaq still intends to launch Bitcoin futures, and may do so in the first quarter of 2019, according to “two people familiar with the matter.” Speaking to Bloomberg this week, the two unnamed sources note that Nasdaq has been “working to satisfy the concerns of the U.S.’s main swaps regulator, the Commodity Futures Trading Commission [CFTC], before launching the contracts.” Later in the week, it was revealed that Nasdaq had partnered with U.S. investment firm VanEck to jointly launch a set of “transparent, regulated and surveilled” digital assets products, a move that supports the unnamed sources’ claims.

Ohio Poised to Become First US State to Accept Bitcoin for Taxes

The U.S. state of Ohio is set to become the first state to accept Bitcoin (BTC) as a tax payment. According to the Wall Street Journal, the decision will at first only apply to business, but there are plans in place to extend the crypto option to individual taxpayers in the future. Beginning this week, the WSJ notes that all Ohio-based businesses will be able to register to pay their taxes in BTC, which will then be processed through crypto payments service BitPay.

Vitalik Buterin: Blockchain Tech Isn’t as Applicable in Every Industry as People Think

Ethereum (ETH) co-founder Vitalik Buterin said this week in an interview that the misapplication of blockchain technology in some industries leads to “wasted time.” Buterin noted that although there are a high number of companies that try to establish higher standards and transparency by using blockchain tech, he does not believe that blockchain can be applied usefully in every industry. Buterin specifically criticized the proprietary nature of corporate blockchain projects from tech giants like IBM, noting that crypto and cross-border payments are suitable industries for the technology’s use.

US Securities Regulator Charges Floyd Mayweather Jr., DJ Khaled for Illegal ICO Promotion

The U.S. Securities and Exchange Commission (SEC) has charged professional boxer Floyd Mayweather Jr. and music producer Khaled Khaled (known as DJ Khaled) for unlawfully advertising Initial Coin Offerings (ICOs). The SEC found that Mayweather did not disclose receiving payments for promoting three ICOs (including $100,000 from Centra Tech), while DJ Khaled failed to disclose a $50,000 payment from the same crypto startup. In May, Centra’s three co-founders had been formally indicted for running a fraudulent $32 million ICO in 2017.

Bitcoin Creator Satoshi Nakamoto’s P2P Account Goes Live, Posts One-Word Update

Anonymous Bitcoin (BTC) creator Satoshi Nakamoto’s P2P Foundation account became active this week, posting a one-word status and adding a Brazilian user to his friend list. The profile, which is associated with an email that had previously been hacked, has been offline since Nakamoto withdrew from online activity in late 2010. The one word post — “nour” — has no obvious meaning: a Google search finds an Urban Dictionary post for “the most loving, affectionate and caring person you’ll ever meet,” while the word also is a transliteration of the Arabic and Ancient Hebrew for “light” or “life.”

Most Memorable Quotations

Most Memorable Quotations

Vitalik Buterin

“I don’t understand this deeply, but the detail that jumped out at me is they’re saying ‘Hey, we own all the IP and this is basically our platform and you’re getting on it.’ And like, that’s… totally not the point….” — Ethereum (ETH) co-founder Vitalik Buterin, speaking out the corporate blockchain projects

Tom Lee

“If you’ve got time, it will arise. It will not happen within three months, or one year, but in two to three years, and this is the golden time to be in crypto,” — Tom Lee, major Wall Street crypto bull and co-founder of Fundstrat Global Advisors

Josh Mandel

“I do see [Bitcoin] as a legitimate form of currency,” — Ohio state Treasurer Josh Mandel, speaking about adding a BTC tax payment option

Laws and Taxes

Laws and Taxes

Liechtenstein Cryptoassets Exchange Receives “Business License” From Regulator

The Liechtenstein Ministry of Economic Affairs has reportedly given a “business license” to professional traders-focused Liechtenstein Cryptoassets Exchange (LCX). According to the business, the license is a “milestone” in developing a “fully regulated blockchain ecosystem,” targeting institutional and professional investors. The firm now plans to apply for a Financial Market Authority (FMA) license, as well as other regulators’ approvals to trade security tokens among other offerings.

US SEC Chairman Jay Clayton Reiterates Strict Stance on ICO, ETFs

Jay Clayton, the chairman of the U.S. Securities and Exchange Commission (SEC), implied this week how the regulator is maintaining its strict stance of Initial Coin Offering (ICO) compliance. In an interview, Clayton noted that there was still a need to conduct public token sales to U.S. customers while following SEC guidelines. Clayton refused to comment on the SEC’s  pending decision on whether to allow Bitcoin exchange-traded funds (ETFs) to launch, noting only “we’ve been clear on some of the issues that are of concern to us.”

Malaysia Plans to Create Crypto Regulation by Quarter 1 2019, Says Finance Minister

According to Malaysia’s finance minister, the country will develop regulations for cryptocurrency and Initial Coin Offerings (ICO) in Q1 2019. Finance Minister Lim Guan Eng stated that the country’s regulator, the Securities Commission (SC), had given him the timeframe for the regulations, which will form “part of the SC’s efforts to facilitate alternative fundraising avenues and new investment asset classes.” Also this week, the minister noted that any entity wishing to issue cryptocurrency must defer to the country’s central bank, Bank Negara Malaysia (BNM).

Adoption

Adoption

Coinbase Launches Over-the-Counter Trading for Institutional Investors

Major U.S. crypto exchange and wallet provider Coinbase revealed this week that they have launched over-the-counter (OTC) trading for institutional customers. In contrast to trading through a crypto exchange itself, OTC crypto trading will allow institutional investors to conduct direct trades between each other. Head of Sales at Coinbase Christine Sandler noted that the decision to open OTC trades came at a time of increased demand for the service from institutional players, who consider leveraging both exchange and OTC business as a “huge benefit” to their customers.

CLSNet Blockchain Payment Netting Service Launches With Big Banking Clients

U.S. forex exchange (FX) settlement giant CLS’ blockchain payment netting service went live this week, with Goldman Sachs and Morgan Stanley as some of the initial users of the service, which was built in conjunction with IBM. The blockchain netting service, which is described as the “first global FX market enterprise application running on blockchain in production,” also has “committed” participation from six international entities including the Hong Kong branch of the state-run Bank of China.

Abu Dhabi-Based Bank Completes “First” Sukuk Transaction on Blockchain

Al Hilal Bank, based in Abu Dhabi, the United Arab Emirates (UAE), has announced it has completed “the world’s first sukuk transaction” with the use of blockchain technology. Sukuk is a legal instrument, also referred to as “sharia compliant” bonds, which allows investors to generate returns without infringing on Islamic law. The sukuk transaction was worth a reported $1 million, sold by Al Hilal to a private investor with the participation of Swiss-based fintech company Jibrel Network, which has offices in Dubai.

Bahrain Finance Training Institute Launches Blockchain Academy

The Bahrain Institute of Banking and Finance (BIBF) announced the launch this week of what it claims to be the country’s first “Blockchain Academy.” The BIBF established in Bahrain in 1981 by approval of the Specific Council for Vocational Training, is an unregistered non-profit semi-government entity that provides training in the financial sector. The Blockchain Academy, according to the announcement, is designed to prepare participants to earn the international qualification of Certified Blockchain Professional C|BP and was developed by both the BIBF and Dubai-based training firm MyLearning Key.

Amazon Debuts Two New Blockchain-Related Products

E-commerce giant Amazon has announced the launch of two new blockchain-related services this week: Amazon Quantum Ledger Database (QLDB) and Amazon Managed Blockchain. QLDB is a ledger database, overseen by a central trusted authority, that will provide a transparent, immutable, and cryptographically verifiable log of transactions, while the Amazon Managed Blockchain can operate with QLDB, allowing users to adjust and manage a scalable blockchain network.

Mergers, Acquisitions, and Partnerships

Mergers, Acquisitions, and Partnerships

“Code of Conduct” Association Launched for Crypto by Ten Blockchain, Fintech Firms

Ten financial and technology firms have established an Association for Digital Asset Markets (ADAM) in order to create a “code of conduct” for the cryptocurrency sector. Among the founding members of the organization include Mike Novogratz’s crypto merchant bank Galaxy Digital, global financial services firm BTIG, fintech firm Paxos — of recently-launched stablecoin PAX — and crypto liquidity solutions provider GSR. The group plans to work with regulators to create “comprehensive standards” for digital asset market participants.

Nasdaq and VanEck Partner to Release “Regulated, Surveilled” Digital Assets Products

Nasdaq, the world’s second largest stock exchange, and the U.S. investment firm VanEck have announced a partnership to launch a set of “transparent, regulated and surveilled” digital assets products together. The partnership, announced via a tweet and then at a New York crypto conference, supposes that the new products would use Nasdaq’s SMARTS Market Surveillance system, alongside VanEck’s MVIS digital asset pricing indices.

Microsoft Japan and LayerX Partner to Increase Domestic Blockchain Use

The Japanese arm of computer giant Microsoft has partnered with nascent blockchain startup LayerX to “accelerate” uptake of the technology in Japan. LayerX was created in August as a joint project between news curation app Gunosy and advisory service AnyPay, and sees blockchain integration for enterprise, including the application of smart contracts and general consulting. Using Microsoft’s Azure Blockchain-as-a-Service (BaaS) solution, the companies will work together to promote broader applications of blockchain.

ASUS Partners With GPU Mining Platform to Let Users Mine Crypto via Graphics Cards

Taiwan-based tech giant ASUS and GPU mining platform Quantumcloud have formed a partnership in order to allow users to mine crypto via their graphic cards. Per the terms of the partnership, owners of ASUS graphic cards will be able to mine crypto through Quantumcloud software and withdraw earnings using PayPal or Chinese app WeChat. Quantumcloud noted that it doesn’t guarantee profits, and that users need to consider usage costs on their own.

Funding Rounds

Funding Rounds

Blockchain Capital Leads Almost $13 Mln Funding Round for U.S. Securities Token Startup

Blockchain Capital has led a $12.75 million Series A funding round for American securities tokens startup Securitize this week. The platform, which enables the issuances of digital securities — or security tokens — of any asset, also had  Coinbase Ventures, Global Brain, NXTP, OK Blockchain Capital, and Xpring at Ripple participate in the funding round. Blockchain Capital’s co-founder and managing partner Brad Stephens will join Securitize’s Board of Directors.

Decentralized Exchanges Completes $15 Mln Funding Round with Huobi and OKCoin

BHEX Exchange, a decentralized crypto exchange, finished a $15 million funding round this week with support from major exchanges like Huobi and OKCoin. According to BHEX, the new funding round also included support from Genesis Capital, among others. BHEX’s investment subscription has purportedly attracted over 70 investment institutions, while Blue Helix selected 40 to participate in the first round of investment.

Winners and Losers

Winners and Losers

Winners and Losers

The crypto markets are slightly in the green at the end of the week, with Bitcoin trading at $4,128.16, Ripple at $.37, and Ethereum at $116.48. Total market cap is around $134 billion.

The top three altcoin gainers of the week are FREE Coin, Etheera, and RabbitCoin. The top three altcoin losers of the week are ZeusNetwork, Cyber Movie Chain, and TRONCLASSIC.

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

FUD of the Week

FUD of the Week

Bitmain Sued for $5 Mln For Alleged Unauthorized Mining at Clients’ Expense

Crypto mining giant Bitmain is facing a class action lawsuit of $5 million that alleges the company mined crypto for its own benefit while its customers’ devices were in the process of setting up. According to the lawsuit, Bitmain is benefitting from the the lengthy “initialization” period that its ASIC [Application-Specific Integrated Circuit] devices need for set up. The plaintiff claims that the company’s ASIC devices are “preconfigured to use its customers’ electricity to generate crypto currency for the benefit of Bitmain rather than its customers.”

US Treasury Adds Crypto Addresses of Two Iranians to Sanctions List Over BTC Ransomware

The U.S. Treasury Department has sanctioned two Iranians allegedly involved in Bitcoin (BTC) ransomware scheme SamSam, including their Bitcoin addresses in a first for putting crypto addresses on a sanctions list. The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) took action against two Iranian individuals, Ali Khorashadizadeh and Mohammad Ghorbaniyan, who are accused of exchanging Bitcoin into Iranian rials (IRR) associated with the scheme. OFEC has managed to identify two crypto addresses associated with the alleged Iran-based criminals, with 7,000 transactions in Bitcoin and around 6,000 BTC moved since 2013.

Bulgarian Prosecutors Detain Three Hackers Who Reportedly Stole $5 Mln in Crypto

Bulgaria’s Gendarmerie forces and specialized prosecutors have arrested three hackers allegedly involved in stealing $5 million in crypto this week. According to the investigation, the hackers used new methods and advanced computer skills, including specialized hardware, in the scam. The investigation, which began five months ago, has ended with the police seizing cryptocurrencies worth around $3 million, as well as computers, flash drives, and a hardware portfolio for storage of crypto data.

Novogratz’s Galaxy Digital Lost $136 Mln During First Three Quarters of 2018

According to a report from Bloomberg this week, Mike Novogratz’s crypto investment bank Galaxy Digital has lost $136 million in the first three quarters of 2018. The banks realized and unrealized losses in Q3 amounted to $41 million, and the firm’s share price also dropped to a record low after tumbling 55 percent this month. Galaxy Digital explained the loss by pointing to the falling prices of Bitcoin (BTC), Ripple (XRP), and Ethereum (ETH), calling the lack of crypto trading volumes a “headwind” to success.

Zug Court Shuts Down Crypto Mining Firm Over Unregistered Initial Coin Offering

The cantonal court in Zug, Switzerland, has shut down cryptocurrency mining firm Envion AG for offering an allegedly unauthorized Initial Coin Offering (ICO). Envion, a Swiss-based off-grid mining company that touts itself as using decentralized, clean energy like hydroelectric and solar to power its mobile mining units, raised around $100 million through its mid-January ICO this year. The funding led to a conflict between the two partners at Envion, resulting in a court trial. This week, the court ruled to liquidate the firm, while noting the complete absence of any auditing function or board.

Prediction of the Week

Prediction of the Week

Civic CEO Believes Bitcoin Will Trade Range-Bound for “Three to Six Months”

According to Vinny Lingham, the CEO of identity management startup Civic, Bitcoin’s (BTC) price will remain range-bound between $3,000 and $6,000 for the next three to six months. Speaking on CNBC’s “Fast Money,” the CEO noted that it is doubtful that the coin will break down the support level of $3,000 since there is “a lot of buying in the short term around that mark.”

Best Cointelegraph Features

Best Cointelegraph Features

Ohio to Accept Tax Payments in Crypto — Setting the Standard for Future?

Ohio state is looking to become the first in the U.S. to let businesses, and possibly later individuals, to use cryptocurrencies to pay for taxes. Cointelegraph spoke to Ohio’s State Treasurer Josh Mandel, the person responsible for the initiative, about how he sees the state becoming more of a blockchain hub as well.

Trezor One Wallets Forgery Reveals New Techniques Used to Steal Crypto

Last week, Trezor, one of the leading crypto hard wallets, reported that one-for-one copies of their devices had been found, and warned customers to be careful of purchasing Trezors from unreliable sellers. The key difference between the real and fake Trezors? A holographic sticker on the box, which some critics say is too weak as a security measure.

ABC vs SV: Assessing the Consequences of the Bitcoin Cash War

The Bitcoin Cash (BCH) hard fork took place on Nov. 15, but the consequences are far reaching. Bitcoin ABC, which was backed by both BCH advocate Roger Ver and Bitmain founder Jihan Wu, ended up winning the allegiance of the majority of exchanges, but Bitcoin SV is far from being dead.

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North Korean Hackers Move Onto Attacking Individuals After Exchanges Boost Security

The CEO of cybersecurity firm Cuvepia declared that his company detected over 30 attacks on crypto-bearing individuals probably carried out by North Korean hackers, English-language media site South China Morning Post reports Nov. 29.

Kwon Seok-Chul, the CEO of the aforementioned South Korean cybersecurity company, said that the new targets of the suspected North Korean cyberattacks “are just simple wallet users investing in cryptocurrency.” He then added that many cases probably haven’t been detected, and that there may have been well over 100 attacks.

As the article states, the “targeting of individuals holding virtual currencies such as Bitcoin (BTC) marks a departure from its previous methods.” As Cointelegraph reported this October, North Korea allegedly backed two cryptocurrency scams this year: hacks funded by the country reportedly comprise of 65% of all cryptocurrency stolen to date.

Simon Choi, founder of cyber warfare research company IssueMakersLab, attributes the shift towards attacking individuals to cybersecurity enhancements by exchanges and financial institutions:

“Direct attacks on exchanges have become harder, so hackers are thinking about alternatively going after individual users with weak security.”

Choi also said that most targets have been wealthy South Koreans since “they believe that if they target CEOs of wealthy firms and heads of organisations” then “they can take advantage of billions of won in virtual currencies.”

According to Luke McNamara, an analyst at cybersecurity company FireEye, “it’s possible from previous intrusions they’ve been able to collect information” about “people using these [cryptocurrency] exchanges.”

McNamara explained that “when they understand and know the targets” then “they are able to craft lures specific to those organisations or entities.” He added that this makes them “effective at what they are doing.”

As Cointelegraph reported, Kaspersky Labs claims that North Korean hacker collective Lazarus Group used the “first” macOS malware to hack a crypto exchange. Experts have also argued that North Korea increasingly uses cryptocurrencies to avoid U.S. sanctions.

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Crypto Markets See Persistent Red, Bitcoin Briefly Dips Below $4K

Friday, Nov. 30 — After a short-lived spike earlier this week, the crypto markets are today back in the red, with virtually all of the top 20 cryptocurrencies seeing losses within a 4 and 10 percent range, as data from Coin360 shows.

Market visualization by Coin360

Bitcoin (BTC) has had a volatile week, jaggedly trading between its low of around $3,600 (Nov. 25) and high of $4,400 (Nov. 29). As of press time, the top coin is at $4,037, down 6.3 percent on its 24-hour chart, according to CoinMarketCap. Today’s negative momentum briefly brought the asset below the $4,000 mark, before it stemmed losses somewhat in later trading hours.

On the week, Bitcoin is around 6 percent in the red; monthly losses are at a stark 36.3 percent.

Bitcoin 7-day price chart. Source: CoinMarketCap

Second-largest ranked crypto asset, Ripple (XRP), is down 5.5 percent on the day, trading at $0.35 to press time. While its market share has dropped down to $14.45 billion, it continues to hold its margin ahead of Ethereum (ETH), now ranked 3rd largest crypto, with a market cap of just below $11.7 billion.

On the week, Ripple is 12 percent in the red, with monthly losses above 19 percent.

Ripple 7-day price chart. Source: CoinMarketCap

Ethereum (ETH) is down a round 5 percent on the day to trade at $112.9. The asset veered close to double digits during a market tumble Nov. 25, and has since recovered, briefly hitting $125 Nov. 28 — yet without sustaining significant gains. The altcoin’s decline on the week has brought it to around 7.6 percent in the red; monthly losses are pushing 43 percent.

Ethereum 7-day price chart. Source: CoinMarketCap

Most of the remaining top ten coins on CoinMarketCap are seeing losses of between 4 and 10 percent, with the notable exception of newly-forked Bitcoin SV (BSV) (from the Bitcoin Cash (BCH) split), which has decoupled from the wider market to seal a 2.6 percent gain on the day, trading at $96.35.

Meanwhile, EOS (EOS) is down 5.4 percent at $2.86 and Litecoin (LTC) is down 6.3 percent at $32.06: Cardano (ADA) is the hardest hit among the top ten, sinking 9.2 percent to trade at $0.038.

The remaining coins in the top twenty by market cap are all red, with the exception of privacy-focused alt, Zcash (ZEC), ranked 19th, which is up 1.74 percent at $82.05. Zcash’s spike is likely due to major U.S. cryptocurrency exchange Coinbase announcing its launch of support for the asset on its Coinbase Pro platform yesterday, Nov. 29.

15th largest coin NEM (XEM) is down almost 8 percent at $0.07, and Tron (TRX) is pushing a 10 percent loss at $0.014. 13th largest crypto, IOTA (MIOTA), is down 5.7 percent at $0.28, and Dash (DASH) is down 6.74 percent at $90.60.

Total market capitalization of all cryptocurrencies is around $130.4 billion as of press time, up  almost $16 billion from an intraweek low of $114.6 billion Nov. 25.

Total market cap 7-day chart. Source: CoinMarketCap

With the deep red markets continuing to command attention, Chinese cryptocurrency mining giant Bitmain has today released several price indices for cryptocurrencies, aiming to track the largest 17 assets by market cap for both institutional and retail investors.

BlockShow Asia 2018 has been a barometer of both the crypto sector’s dynamic development and of recent market sentiment, with BlockShow CEO Addy Creeze quipping that “bear market” and “crypto winter” were among the most-heard words at the event.

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The Key to Staying Profitable When Mining Revealed by Software Startup

A company has released the beta version of its cryptocurrency mining platform – the first iteration of “simple to setup, highly automated” software that is aimed to appeal to newbies and seasoned professionals alike.

Cudo Miner says its offering is a GUI miner, which in other words is a graphic frontend for its interface. Its accessible technology means “inexperienced miners can install and sit back while the software automates everything else,” while experts have the chance to adjust advanced settings in line with their preferences.

The program is able to mine multiple coins and switch between them based on which one is the most profitable at any given moment. Casual miners can leave Cudo Miner working in the background while they use their PC, ensuring that it does not interfere with their computer’s performance. Crypto enthusiasts with dedicated mining rigs can maximize earnings by tweaking algorithms on the “advanced settings” page, where they can also see the results of all their benchmarks. Automatic overclocking and other features designed to boost profitability are being released by the end of the year, aiming to bridge the gap between traditional command line and GUI miners.

These features are reinforced by a dashboard where miners can examine data related to their mining performance, look at historic earnings, view hardware information and power levels, as well as keep a close eye on the health of their devices.

Cudo Miner users also have a choice in how they get paid – they can receive compensation through Ethereum or Bitcoin, and additional coins will be included to the list in the future.

Mining: no longer a minefield

The company says that its simplified approach to mining has struck a chord with crypto enthusiasts. Since launching a month ago, Cudo says that its software has attracted thousands of users in more than 130 countries. Available on Windows, Mac and Linux, the program updates automatically and makes the necessary changes as forks arise.

Overall, the crypto mining world has been suffering a crisis of confidence over the past few months – but with Bitcoin miners alone already generating $4.7 billion in revenue for the first nine months of 2018, there is still a lot to play for.

Cudo Miner ardently believes that “GPU mining is definitely alive and kicking,” but its team argue that the strategies being adopted by some professional miners are diminishing their chances of making a decent profit. Altcoins are often the most profitable only for a few minutes or hours, so one needs to mine during this period to maximize gain. They say the emphasis needs to move away from focusing on a single coin or algorithm in favor of chopping and changing between an array of cryptocurrencies as well as choosing optimal settings – elevating their chances of making it worthwhile.

The company’s founders were motivated to find an accessible mining solution when they discovered “the huge amounts of computing power on laptops, PCs and servers” – with hardware often idle 60 percent of the time. As a result, they sought to develop a solution that kills two birds with one stone: stopping resources from being wasted while maximizing profitability from mining by removing barriers to entry.

Crypto with a conscience

Of course, utilizing underused resources doesn’t detract from the fact that there are concerns about the energy consumption that goes into cryptocurrency mining, with a recent report suggesting that it takes more energy to produce $1 of Bitcoin than it does to uncover a dollar worth of gold or silver.

Cudo says it is the first crypto mining company to commit to being carbon neutral – as well as making an active effort to get its users to follow suit.

The company offsets its energy consumption by investing in carbon credits that aim to help good causes – delivering funding to solar and wind power projects in India which deliver renewable energy to the national grid. Miners will soon be able to select options that make their own hardware carbon neutral, too.

Over time, Cudo believes distributed computing has the potential to help a number of good causes, including cancer research, protein folding and seismic imaging.

Within Cudo Miner, users can choose to mine anonymously in order to test the software without logging in. The revenue received goes to charity. It has also established a charitable arm called Cudo Donate, where miners can convert their spare computing power into cash for good causes. This project has the goal of raising $1 billion in funding and computing resources for charities in the coming years.

Cudo was founded by CEO Matt Hawkins and by Duncan Cook, and both men have been motivated by a desire to do something philanthropic. Cook has experience in building technology for good causes, and one of his projects was a disaster warning app for the American Red Cross, which has helped to save countless lives during natural disasters.

 

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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The Imitation Game: Startup’s Big Idea in Building AI That’s as Good as Human

Artificial intelligence has come a long way in recent years, but there is still one milestone which is yet to be achieved: passing the Turing test.

The premise is simple: an interrogator asks questions to a machine and to a human while sitting in a separate location, and receive the answers written down. If they can’t tell the difference between man and machine after a period of time, the AI has passed.

For the past 12 years, a $100,000 prize has been offered to the developers of the first program to pull this off. Alas, there have been no winners so far.

Now, a startup is taking on the challenge of building an AI which can succeed where no machine has done before – and is using blockchain to incentivize the public to help them in its quest.

A helping human hand

According to CEN, current AI offerings can be fragile – “making childish errors when they come across new information from outside their training set.” This is normally the key reason AIs struggle in the Turing test, as they often provide answers that lack any relevance to the question that was asked.

The startup’s approach is to switch questions that an AI cannot answer to a human in real time – a seamless blend of machine and manpower. This new information is then added to the AI’s knowledgebase, helping it to learn what to do in the future.

Tokenization is used to log the answers given by “minders,” the humans intervening, and they are rewarded for their efforts in ERC-721 tokens – a non-fungible token that has become popular in recent years because of how they are unique and non-divisible. Minders also have the chance to earn royalties if their knowledge is used again in the future.

CEN is now running a campaign to recruit these minders, and has also launched a test version of its chatbot where members of the public can put it to the test and make improvements by replying with “+” when they like an answer or “-“ if they don’t.

Ownership of knowledge

The startup firmly believes that AI will have a fundamental role in the 21st century, but argues that many machines are being built incorrectly – and subsequently lack human understanding. It is also passionate about ensuring that people are rewarded for their knowledge, in an age where large corporations often solely reap the benefits.

Its platform also paves the way for individuals and businesses who are seeking expert information to pay for further insight from a human using tokens.

CEN says its founding team “have made various groundbreaking accomplishments in the field of technology,” which include inventing the touch screen and delivering the world’s first mobile VoIP call. They are now upbeat about achieving similar success in the AI industry and say it is ripe for disruption.

The company has developed a number of pre-production systems which aim to reveal the full potential of a hybrid artificial and human intelligence system. Over time, CEN hopes to scale these platforms further – and ensure that humans who want to make a contribution can do so through an interface that’s suitable for non-programmers.

A “freemium” model will enable registered users to access crowdsourced information free of charge, and additional products or services will be available for purchase on demand. It is hoped that artificial intelligence will help to reduce costs per hour when compared with the fees charged by humans alone.

The network is scheduled to launch in the spring of 2019, and CEN is currently holding a crowdfunding campaign. CEN will also be attending BlockShow’s Asia Blockchain Week in Singapore, giving participants a chance to learn more about what it has to offer.

 

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

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Bitcoin Is World’s Best Performing Asset Class Over Past 10 Years, Says Pompliano

Crypto industry investor Anthony Pompliano says Bitcoin (BTC) will likely fall to 85 percent below its all-time-highs – around $3,000. Pompliano gave his forecast during an interview on CNBC’s Squawk Box Nov. 26.

The partner at crypto investment firm Morgan Creek Digital Assets argued that while “Bitcoin was overvalued in Dec. 2017” – with selling pressure this year subsequently driving its price downwards – there are several important factors related to the asset’s long-term value that are important to remember:

“First, [Bitcoin] is the most secure transaction settlement layer in the world, so it’s got to be worth something […] it’s the best performing asset class over the past ten years – it’s outperformed S&P, DOW, NASDAQ, etc. during the longest bull run. It experienced two 85 percent drops during that time, but [it’s] still up over 400 percent in the last two years.”

Third, he added, all of Bitcoin’s price action in past years has been driven by retail investors – ahead of any meaningful involvement from major institutional players such as those now poised to enter the crypto space next year. Big players include Fidelity and New York Stock Exchange (NYSE) operator Intercontinental Exchange (ICE).

Pompliano argued that the recent “wash-out” on the crypto markets is a barometer of retail investor patterns; throughout its retail-driven history in 2017, the cryptocurrency traded as a “highly volatile speculative asset.” By contrast, he continued, more recent institutional involvement is primarily conducted via less transparent over-the-counter (OTC) trades, where trends are not immediately apparent and harder to gain insight into.

Pompliano was lastly asked about dwindling profit margins for cryptocurrency miners as the asset’s value tumbles. He conceded that outside of regions with abundant low cost power, such as China – where he claimed miners can mint Bitcoin for as little as $2,000-2,500 – we are seeing a similar “wash out” of miners in areas where electricity costs push expenses closer to $6,000 or $6,500. These latter, he said, “are underwater now.”

As previously reported, Morgan Creek Digital assets is backed by the institutional investment house Morgan Creek Capital, which has $1.5 billion in assets under management. The firm launched a Digital Asset Index Fund in late August, which gives accredited investors indirect exposure to Bitcoin, Ethereum and eight other large market cap assets, although not pre-mined cryptos such as Ripple (XRP) and Stellar (XLM).

Speaking yesterday, Vinny Lingham, CEO of identity management startup Civic, predicted Bitcoin will trade range-bound between $3,000 and $5,000 for at least three to six months; if the coin fails to then break higher, it could lose the $3,000 support as well.

Bitcoin is currently trading at $3,730 by press time, down just over 6 percent over the past 24 hours.

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Bitmain Faces $5 Mln Lawsuit for Allegedly Unauthorized Mining at Clients' Expense

Crypto mining giant Bitmain is facing a class action lawsuit of $5 million that alleges it mined cryptocurrency for its own benefit on its customers’ devices. The filings were published under docket listings for the North District Court of California, Nov. 19.

The lead plaintiff, Los Angeles County resident Gor Gevorkyan, has leveled his lawsuit against Bitmain’s U.S.- and China-based entities, alleging that the company is benefiting — without authorization — from the lengthy “initialization” period that its ASIC [Application-Specific Integrated Circuit] devices need for set up:

“Until the complicated and time-consuming initialization procedures are completed, Bitmain’s ASIC [Application-Specific Integrated Circuit] devices are preconfigured to use its customers’ electricity to generate crypto currency for the benefit of Bitmain rather than its customers.”

In Gevorkyan’s case, the filing states he purchased Bitmain devices, including its S9 Antminer machine, in January 2018. The product was reportedly “difficult to configure” and during the “substantial amount of time” that lapsed before he could fully initialize his devices, they operated at cost-intensive “full power mode,” at his expense.

The filing states that “the ASIC devices were mining crypto currency from the moment Plaintiff started the device and it would transfer any electronic crypto currency mined to Defendant.” This allegedly continued until the devices were associated with Gevorkyan’s personal account.

The lawsuit thus accuses the company of engaging in “an unfair business practice,” and of having “unjustly enriched” the firm by converting the use of its customers’ ASIC devices and electricity, thereby causing “ascertainable and out-of-pocket losses.”

Gevorkyan is seeking damages in excess of $5 million on behalf of all miners “similarly situated” as Bitmain clients.

The lawsuit comes at an eventful time for the mining titan; its China-produced mining rigs are likely to be affected by recently imposed U.S. sanctions on Chinese goods; something that would be particularly burdensome, as according to the company’s pre-Initial Public Offering (IPO) prospectus, foreign sales accounted for 51.8 percent of its total revenue in 2017.

On the eve of its IPO — which aims to raise anything from $3 billion to $18 billion — Bitmain has become mired in a series of difficulties.

As the fallout from the Bitcoin Cash (BCH) hard fork continues, the hardware manufacturer could face serious losses after having invested a significant amount of its funds in the asset. Moreover, the company’s pre-IPO triggered controversy as alleged participants, such as SoftBank, Termasek and the Chinese IT-giant behind WeChat, Tencent, officially denied their participation.

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Crypto Markets See Mild Volatility on The Day, Fail to Hold Sharp Rebound Trend

Saturday, Nov. 23: crypto markets have seen some volatility on the day, but failed to hold a sharp rebound attempt. The top 20 cryptocurrencies by market cap are seeing their prices stabilize after another sell-off yesterday, according to CoinMarketCap.

As of press time, the major 20 crypto markets are seeing a mix of red and green, with most gains fluctuating around 1-2 percent.

Market visualization from Coin360

Bitcoin Gold (BTG), ranked 20th by market cap, has seen the biggest growth on the day, spiking almost 10 percent over the past 24 hours. At press time, the altcoin is trading at around $20.70.

In early September this year, Bitcoin Gold was delisted from major crypto exchange Bittrex, following a $18 million hack of the BTG network in May. The “double-spending” hacking vulnerability of Bitcoin Gold reportedly allowed hijackers to take control over 51 percent of the BTG hashrate.

Bitcoin (BTC) is slightly down around 1 percent over the day, and trading around at $4,225 at press time. Earlier in the day, the major cryptocurrency spiked to as high as $4,413, but failed to hold the rebound trend and dropped to its 24-hour low at press time.

Bitcoin is down almost 24 percent over the past 7 days.

Bitcoin 24-hour price chart

Bitcoin 24-hour price chart. Source: CoinMarketCap

Ripple (XRP), still holding its place as the second top cryptocurrency by market cap after replacing Ethereum (ETH), is also slightly down around 1 percent on the day to press time.

Ethereum is seeing even less movement on the day, down just 0.23 percent and trading at $120.69 at press time.

Total market capitalization of all cryptocurrencies is around $136.3 billion at press time, down from its high this week of $187 billion. Daily trade volume is just under $12 billion, while Bitcoin’s dominance on the market constitutes around 53.9 percent.

Total market capitalization 7-day chart

Total market capitalization 7-day chart. Source: CoinMarketCap

Ran Neuner, the host of CNBC’s CryptoTrader show, has commented on the shaky state of the market on Twitter today, arguing that trying to speculate in crypto is not the genuine purpose of the industry:

“Bear markets shake out weak hands, those only here for money, those trying to make a buck trading & those trying to profit w/out building or adding value. Look around, you can see who will be around when it’s done & who won’t. If you want to survive this, build something, add value.”

Recently, Stephen Innes, head of trading at Singapore-based capital market service OANDA Asia Pacific, predicted that gold prices will “jump considerably higher and there’s an inverse relationship we’re starting to see with gold and coins,” while Bitcoin could fall to as low as $2,500 by January 2019.

Crypto analyst Joseph Young subsequently reacted to Innes’ claim on Twitter, pointing out that gold has seen a decline of 33 percent since 2011, “from $1,800 to $1,200,” while “Bitcoin is up 13,900%, from $30 to $4,200” in the same time frame.

Today, Anthony Pompliano, founder and partner at Morgan Creek Digital Assets, tweeted that traditional assets are in fact “taking a beating,” in line with the recent collapse of crypto markets. The expert pointed out that oil is down 30 percent over 7 weeks, while Facebook, Apple, Amazon, Netflix and Google (“FAANG”) are down 20-40 percent from their all-time highs, and the Dow Jones Industrial Average (DOW) had its “worst Thanksgiving week since 2011.”

In an interview with CNBC Nov. 23, Michael Moro, the CEO of cryptocurrency trading companies Genesis Trading and Genesis Capital Trading, said that the Bitcoin price could bottom at $3,000, stating, “You really won’t find [the floor] until you kind of hit the 3K-flat level.”

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The Making of the First US ICO Fraud Case

In common law systems, it is precedent that informs judicial approaches to new and previously unaddressed matters. The precedent that will likely shape the body of U.S. case law on fraudulent initial coin offerings (ICOs) is currently being forged in a federal court in the New York borough of Brooklyn, where a 39-year old entrepreneur, Maksim Zaslavskiy, has pleaded guilty to committing securities fraud.

The development that will most likely result in a landmark decision – the jury will gather in April 2019 to decide on a sentence – is yet another twist of a now 14 month-long effort, involving both the U.S. Department of Justice and Securities and Exchange Commission (SEC). Previously, the process has already yielded a fateful ruling by a federal judge who in September established that securities law is applicable to ICO-related cases.

The case that is poised to become so consequential for the whole ICO space deals with two ventures that neither issued a token nor developed any blockchain-powered infrastructure: REcoin and Diamond Reserve Coin both only existed on paper. Yet it also makes perfect sense that the authorities first went after the most brazen instances of ICO fraud, the ones that hurt rookie retail investors the worst and inflicted the most reputational damage on the industry.

When the SEC first filed a complaint against Zaslavskiy in a federal court in September 2017, it was estimated that REcoin and Diamond Reserve Coin ICOs resulted in around 1,000 investors losing some $300,000. Having fallen for Zaslavskiy’s aggressive marketing campaign, these people were led to believe that they either invested in a digital asset that was backed by real estate located in developed countries (REcoin), or purchased a tokenized membership in an elite club for wealthy business people, with physical diamonds in the company’s custody underlying the value of tokens.

In fact, though, they were buying “worthless certificates,” as U.S. district attorney, Richard Donague, put it, on Nov. 15, 2018, Zaslavskiy admitted in his guilty plea: “We had not yet purchased any real estate.” He now faces up to 5 years in prison, pending the decision of a jury panel. The regulator is also filing a civil lawsuit against Zaslavskiy.

The making of a fraudster

The Ukrainian city of Odessa, overlooking a scenic coastline of the Black Sea, is known for its vibrant spirit and unique culture. Throughout both the Imperial and Soviet periods of its history, the city has been home to a large Jewish community. As the final years of the USSR saw the liberalization of immigration policies, many Odessan Jews chose to leave for either Israel or the West. Born in Odessa, Maksim Zaslavskiy was 12 when his family relocated to the U.S. While Maksim was destined to make ICO history, his brother, Dmitry, chose a banking career and later became an executive director for Morgan Stanley.

Zaslavskiy’s social media pages, as well as websites of many organizations he ran at various points of time, were either deleted or became unavailable in the wake of the high-profile investigation into his activities. The main source of information about his pre-trial life is now the four-hour interview to the SEC representative that he gave in September 2017, of which the Fast Company magazine managed to obtain a transcript.

In 2003, Zaslavskiy received his degree in finance from Baruch College, followed by a LLM from Yeshiva University’s Cardozo School of Law three years later. He worked as an IT consultant for several banks before starting his own international business, whose nature is difficult to infer from the interview. Zaslavskiy also claimed to have been involved in real estate business since the age of 18, yet Fast Company’s investigation failed to verify his employment with the firms he claimed to have worked for.

According to the interview, the 2008 crisis became a major blow for Zaslavskiy’s business, further entrenching him in his resentment of the U.S. financial system. He turned to charity work, founding a philanthropic organization called Live Love Laugh. However, it is impossible to say whether the ambitious statements on its website (which is now down) were ever backed by any real actions, since the entity appears to never have been properly registered.

Zaslavskiy has also written at least three books (under the name Avi Meir Zaslavsky) that can be still found on Amazon. These are how-to guidebooks on the ins and outs of real estate business. Another one, which appeared around the time his two ICOs were in full swing in August 2017, sets out to explain the reader that “what you perceive and use as money is designed in such a way that the wealth created by the economy truly benefits only large banks and multinational corporations.”

Apparently, the book was meant to lend credibility to Zaslavskiy’s claim for intellectual leadership in the crypto space, as its press release presents him as “one of the world’s leading currency decentralization proponents.” The publicity campaign around the book provides a glimpse into Zaslavskiy’s approach to marketing himself and his ventures: bold, extravagant, overblown. Unsurprisingly, this style carried over to the way his two ICOs were presented to potential investors.

Real estate tokens and Initial Membership Offerings

For someone disenchanted with both the traditional financial system and traditional means of making money, the ICO rush of 2017 presented innumerable opportunities. The beauty of the ICO model was that it opened up the world of venture capital, previously reserved exclusively for professional investors, to anyone with a few spare dollars and some interest in the uncharted space of blockchain applications. The flipside of it is that some of the newcomers were unable to tell legitimate projects from outright scams replete with red flags.

Megalomaniac language and exaggerated promises are usually telltale signs of something not being right with the venture that’s taking off. Zaslavskiy’s projects had both. REcoin, announced in June 2017, presented its founder as a “Real Estate guru” and proclaimed that the 101REcoin Trust held properties “in developed and stable economies like the USA, Canada, Japan, Great Britain, and Switzerland” without providing any evidence in support. Also, an “international team of attorneys and programmers” was allegedly there to “work tirelessly” on increasing token holders’ fortunes. As the court proceedings later revealed, no such team ever existed.

In August, after facing the first signs of SEC interest to REcoin, the “Entrepreneur, Philanthropist, and Author Max Zaslavsky” began his marketing campaign for an allegedly diamond-backed digital asset, the Diamond Reserve Club token. The release (beginning with “If the Holy Scriptures have taught us anything at all…”) touted a brand new Initial Membership Offering model, which was supposed to tokenize investors’ participation in a large ecosystem of interconnected businesses. It also suggested that the tokens could be inherited by the investors’ grandchildren.

One would think that the theatrical language and gargantuan assurances of the two ICOs’ public-facing documents would only make any reasonable person scoff. Yet from July through September Zaslavskiy and his accomplices managed to amass around $300,000 before the SEC took the matter to court.

The fallout

On Sep. 29, 2017, the SEC brought a civil complaint to the U.S. District Court for the Eastern District of New York against Zaslavskiy and his two companies for violating U.S. securities laws. Recoin and DRC responded on their websites with a joint statement that argued that it was due to “lack of legal clarity as to when an ICO or a digital asset is a security,” suggesting that their operations were not within the SEC’s purview.

However, the Feds seemed to disagree. On Nov. 1, Zaslavskiy was apprehended by FBI agents and criminally charged with a conspiracy to commit securities fraud. In early December, he pleaded not guilty and secured a $250,000 bail backed by his family’s Brooklyn house. In February, Zaslavskiy’s defense filed a motion to dismiss the indictment on the grounds of inappropriate application of securities law to cryptocurrencies. Yet both the DoJ and SEC insisted that REcoin and DRC tokens passed the Howey test – a legal standard that determines whether a contract is a security.

In September, U.S. district judge Raymond Dearie concluded that for the purposes of the case, the tokens could, indeed, be treated as securities, potentially setting a precedent that could shape the future of ICO regulation. The judge was also unequivocal in characterizing the nature of Zaslavskiy’s enterprises:

“Stripped of the 21st century jargon, including the Defendant’s own characterization of the offered investment opportunities, the challenged indictment charges a straightforward scam, replete with the common characteristics of many financial frauds.”

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Mt. Gox Trustee Announces Efforts to Extend Deadline for Civil Rehabilitation Claims

Nobuaki Kobayashi, trustee of the now-defunct Bitcoin (BTC) exchange Mt.Gox, is making efforts to extend the deadline for filing civil rehabilitation claims, according to an official announcement Nov. 22.

While the official deadline for the filings was given as October 22, for both individual and corporate users, today’s announcement indicates that:

“[I]f filings are delayed for reasons not attributable to creditors, proofs of rehabilitation claims filed after the deadline […] may be acceptable. Whether [these] will be accepted is determined by the court […] the Rehabilitation Trustee will make efforts to request the court to accept proofs of rehabilitation claims received by December 26, 2018 (Japan time).”

The announcement further outlines detailed online and offline methods for submitting a claim ahead of the potentially extended deadline of December 26.

As reported, roughly 24,000 creditors are thought to have been affected by Mt. Gox’s 2011 hack and subsequent collapse in early 2014, which resulted in the loss of 850,00 BTC valued at roughly $460 million at the time.

Tokyo attorney Nobuaki Kobayashi, who has been appointed to act as civil rehabilitation trustee to manage Mt. Gox’s bankruptcy estate funds, has recently issued a statement that indicated he had liquidated almost 26 billion yen (about $230 million) in Bitcoin (BTC) and Bitcoin Cash (BCH) over four months as of early March 2018.

Kobayashi earned the ambivalent moniker of Tokyo’s Bitcoin Whale amid allegations his crypto sell-offs had a conspicuously adverse effect on markets; he subsequently pledged to cease the liquidations when civil rehabilitation proceedings began in June of this year.

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Japan: Zaif Exchange Handover Complete as Previous Owner Vows to Dissolve Company

Tech Bureau, the company that formerly operated hacked Japanese cryptocurrency exchange Zaif, has completed its handover to buyer Fisco Cryptocurrency Exchange (FCCE), Cointelegraph Japan reported Nov. 22.

FCCE, which agreed to take over proceedings in October, will now assume responsibility for compensating users who lost money in the hack, which occurred Sept. 20 and involved funds worth around $60 million at the time.

According to a press release from FCCE, compensation proceedings should begin before the end of this month.

No timeframe has yet been set for deposits and withdrawals at Zaif to resume.

Confirming the move, Tech Bureau said it planned to dissolve its entity and retire from the cryptocurrency industry.

“We will abolish the registration of our virtual currency exchange and plan to dissolve,” the company wrote in a statement.

The hack occurred as both authorities and the Japan’s new self-regulatory crypto group are beefing up application requirements for the country’s new cryptocurrency exchange licensing scheme.

In January, fellow exchange Coincheck lost $534 million in one of the biggest exchange hacks in history, subsequently seeing a buyout and turnaround by online broker Monex.

Last week, Coincheck finally began resuming deposits and withdrawals of NEM (XEM), one of the coins affected by the hack.

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Siemens Joins Blockchain-Driven Energy Platform to Increase Interoperability in Industry

Two energy divisions of German tech giant Siemens have joined a blockchain-driven energy platform to promote the use of decentralized technologies in the sector, according to a press release published Wednesday, Nov. 21.

According to Siemens, its Energy Management and Power Generation Services departments are partnering with open-source, scalable blockchain platform Energy Web Foundation (EWF), founded in 2017 to elaborate regulatory, operational, and market solutions for the energy sector.

Siemens officials believe that blockchain technology will help increase interoperability in the area, linking consumers with energy producers and network operators, the press release writes. Moreover, the technology could help increase the efficiency of energy systems and enable new forms of project financing.

The statement also notes that Siemens is already using blockchain accompanied by microgrid control solutions to optimize control over energy consumption. For instance, in 2016, the German firm collaborated with U.S. startup LO3 Energy to develop microgrids

that enable local trading between energy consumers and producers on a blockchain platform. The solution was trialed in one of New York’s boroughs, Brooklyn, enabled to feed the excess electricity back into the local grid and receive payments from its purchasers.

As Cointelegraph previously reported, the company’s financing arm, Siemens Financial Services (SFS), took part in a blockchain pilot in August for bank guarantees using R3 Corda technology, launched by U.K. multinational banking and financial services company Standard Chartered (SC).

Blockchain is actively tested by major energy industry players in different countries. For instance, major Singaporean utility company SP Group, which provides electricity and gas transmission in the country, launched a blockchain marketplace to trade solar energy. Also in Asia, South Korea’s largest power provider KEPCO will use blockchain and other innovative energy solutions to develop an eco-friendly microgrid.

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‘The Big Issue’ Newspaper Launches Blockchain Platform to Promote Impact Investing

The Big Issue, a street newspaper sold by the homeless in the U.K. and other countries, is launching a blockchain-driven platform to promote impact investing, The Financial Times reports Monday, Nov. 18.

Three investment companies — UK Standard Life Aberdeen, U.S. Columbia Threadneedle, and AllianceBernstein — will join The Big Issue as founders of the platform dubbed The Big Exchange. According to the FT, it will offer 30 to 40 social and environmental impact funds, and is set to start working within six months.

The potential investors will be charged a minor fee to use The Big Exchange. Once registered to the platform, they will be able to choose between several sets of proposals awarded a gold, silver, or bronze score based on their correlation with the UN’s 17 sustainable development goals.

The minimum investment is expected to be $640, but Nigel Kershaw, chairman of The Big Exchange, is planning to reduce it down to £2.50 ($3.20) — the same price as The Big Issue.

As per the FT, the platform has already raised about $1.3 million from three of its founders and London-based fintech company FNZ. In the following five years, The Big Exchange expects to attract as much as $3.8 million.

Blockchain is widely used for social needs, especially in the field of charity. As Cointelegraph previously explained, crypto-related technologies, and in particular blockchain, could help increase transparency for donations and international transactions, reducing the fees on money transfers at the same time.

For instance, major crypto exchange Binance has recently managed to raise $1.41 million in various types of ERC20 tokens for those who suffered from devastating floods in Japan in mid-July.

Moreover, blockchain solutions have been used to promote social activity. The manufacturer of household cleaning supplies SC Johnson and environmental organization Plastic Bank partnered in October to open several plastic recycling centers in Indonesia, offering locals tokens for waste collection.

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Top Crypto Exchange Huobi Pays Its Dues to Beijing by Setting up Communist Party Committee

The company behind major cryptocurrency exchange Huobi has created a Communist Party branch as part of its obligations to the Chinese state, the company’s U.S.-based subsidiary Huobi Info confirmed Nov. 16.

Singapore-based Huobi, which was founded in China and has sought considerable international expansion this year, has appeared to opt for “closer ties” with the government. As local news outlet South China Morning Post notes, the company is creating the Party branch at an additional subsidiary, Beijing Lianhuo Information Service (BLIS).

The opening attracted an audience and speeches, including comments from Huobi founder and CEO Li Lin, who owns a 99 percent stake in BLIS, according to the publication.

Under Chinese law, any company with more than three Communist Party member employees must set up its own branch, the Post notes, adding that until recently, the practice was nonetheless mostly confined to state enterprises.

Huobi thus becomes evidently the first cryptocurrency industry business to embrace the tradition, following in the footsteps of Baidu, Alibaba and others.

“Today is a milestone for our company,” Li said at the opening, continuing:

“Under the cordial care of the Party Working Committee of Haidian Park, the party branch of the Beijing Lianhuo Information Service Co., Ltd. has been gloriously established.”

China remains a difficult jurisdiction in which to conduct cryptocurrency-focused business, a ban on trading and “propaganda” creating a cautious atmosphere among investors, while sparking a slow exodus of many outfits to neighboring Hong Kong and further afield.

Last month, an annual ranking of China’s richest citizens included Li among several cryptocurrency entrepreneurs.

Huobi is currently the world’s third largest crypto exchange by daily trade volumes, seeing about $754.8 million in trades over the past 24 hours to press time.

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Hodler’s Digest, Nov. 12–18: a Stablecoin Gets Sharia Certified, the IMF Considers Central Bank Digital Currencies

Coming every Sunday, the Hodler’s Digest will help you to track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions, and much more — a week on Cointelegraph in one link.

Top Stories This Week

Swiss Crypto Firm X8 AG Receives Islamic Finance Certification for Sharia-Compliant Stablecoin

Swiss-based fintech firm X8 AG has received a certification from the Shariyah Review Bureau (SRB) for its Ethereum-based stablecoin. According to the X8 director and co-founder, the ETH-based crypto asset is backed by a basket of eight fiat currencies and gold, allowing Islamic advisors’ concerns over excessive volatility and speculation to be assuaged. The debate whether crypto can be Sharia-compliant has focused on their compatibility with the Islamic prohibition on sheer monetary speculation.

IMF’s Christine Lagarde: Central Bank Digital Currencies Could Have Legitimate “Role”

The head of the International Monetary Fund (IMF), Christine Lagarde, said this week that the international community should look into endorsing central bank issued digital currencies (CBDCs). Lagarde, despite being “not entirely convinced” of the concept of crypto more generally, stated the case for countries to issue government-backed tokens or similar assets in a speech. The comments came a day after the IMF published a dedicated report on CBDCs, examining what it views as the pros and cons of the financial tool.

Aftermath of Bitcoin Cash Fork Cause Expensive “Hash War” Between Camps

This week’s Bitcoin Cash (BCH) hard fork has led to a so-called “hash war,” resulting in mining at a hefty loss on both sides. BitMEX Research tweeted that “although the ABC SV split is entertaining, we estimate that SV miners are burning $280,000 per day mining the SV chain.” On the other side, BCH ABC miners are estimated to be making even larger losses than the SV camp. BitMEX Research estimated these numbers based on SV miners using Bitmain’s Antminer S9 machines, their ability to sell SV coins at the current spot market price ($100 at the time of the tweet), and energy consumption costs of 5 cents per/kWh.

Blockchain Protocol EOS’ Decentralization Questioned After Transactions Reversed

Blockchain protocol EOS had questions raised about its decentralization again this week as evidence emerged on Reddit that appeared to show a moderator reversing transactions which had already been confirmed. According to screenshots posted on the site, a dispute over a phished EOS account was referred to an EOS “arbitrator,” who then reversed the transactions without the owner’s permission, citing the EOS constitution for the actions.

US Man Fined $1.1 Million Over Fraudulent Bitcoin, Litecoin Schemes

U.S. citizen Joseph Kim of Phoenix, Arizona has been sentenced to 15 months in jail and fined $1.1 million for the misappropriation of Bitcoin (BTC) and Litecoin (LTC) from several people. The U.S. Commodity Futures Trading Commission (CFTC) has found that Kim defrauded his employer of about $601,000 worth of BTC and LTC into his own accounts in 2017. After Kim was subsequently fired, he reportedly then defrauded private investors to return the funds to his employer, luring around $545,000 worth of crypto from five individuals before losing the funds in a high risk bet.

Most Memorable Quotations

“Any time there are hard forks things tend to trade weird and strange, so I think people are trying to take some risk off the table,”— Meltem Demirors, CSO of CoinShares   

“Few remember that Satoshi embedded the genesis block with a Times headline from January 2009 about U.K. banks’ bailout. In more ways than one, Bitcoin is the evil spawn of the financial crisis,”  — Benoit Coeure, executive board member of the European Central Bank (ECB)

Laws and Taxes

Judge Rules in Favor of Canadian Bank in Case With Crypto Exchange 5k

A judge has ruled in favor of the Canadian Imperial Bank of Commerce (CIBC) in the court case involving a $19.6 million disputed sum between the bank and Canada’s largest crypto exchange QuadrigaCX. On Oct. 8, the exchange reported it had difficulties accessing its funds since january, when CIBC froze five accounts belonging to the exchange’s payment processor, Costodian Inc., and its owner, Jose Reyes over its purported inability to identify the funds’ owners. This recent court decision hands the disputed sum into the custody of the Ontario Superior Court so the court can identify the owner of the money.

Ripple Lawyers Suggest Moving Ongoing Securities Lawsuit to Federal Court

Lawyers representing payment startup Ripple in its current securities lawsuit are attempting to move the case to a U.S. federal court, a move that one legal commentator described as “tactical brilliance.” The court records confirm the application to move the case, which would potentially allow the outcome to prove that its XRP token is not a security under U.S. law. In the filing, litigation partner Peter Morrison noted that the case meets the requirements needed for the move to take place.

Malaysian MP Asks Gov’t to Develop Crypto Regulations Before Approving Political Funding Coin

A Malaysian Member of Parliament (MP) has asked the country’s government to develop comprehensive cryptocurrency regulations before going further with the Harapan Coin (HRP) crypto project. The project claims to be the world’s first political fundraising platform, with the aim of raising money for the opposition party in Malaysia and potentially becoming an official currency. The MP said this week that it was important to have appropriate crypto regulations before they are used to finance political campaigns and initiatives.

Ohio Congressman Plans Draft Bill to Let ICOs “Sidestep” Securities Laws

Ohio Congressman Warren Davidson made clear plans this week to introduce a bill that would allow Initial Coin Offerings (ICOs) to “sidestep” U.S. securities laws. The Republican congressman for the 8th district of the state of Ohio wants to propose a bill that would categorize ICOs as products, rather than securities, at both the federal and state level. The referred-to bill would reportedly “eliminate” the U.S. Securities and Exchange Commission’s (SEC) oversight of the industry.

Adoption

Major Swiss SIX Stock Exchange Lists World’s First Multi-Crypto ETP

Switzerland’s main stock exchange, the SIX Swiss Exchange, announced this weekend that it would list the world’s first multi-crypto-based exchange-traded product (ETP) next week. The ETP will be backed by Swiss startup Amun AG, will be listed under index HODL, and will track the five major cryptos: BTC, XRP, ETH, BCH, and LTC. The Amun AG index will be managed by the German index unit of investment management firm VanEck. Each crypto will have a certain market share within the upcoming ETP, with Bitcoin accounting for around half of the ETP’s assets.

Microsoft Introduces Cloud-Based Azure Blockchain Development Kit

U.S. software corporation Microsoft has announced the release of a serverless blockchain-powered Azure development kit, dubbed the “Azure Blockchain Development Kit.” The kit reportedly improves the capabilities of Microsoft Azure’s Blockchain Workbench, with features like off-chain identity and data, monitoring, and messaging application programming interfaces (API) in a format that can be used to develop blockchain-based apps. The announcement also notes that the release will focus on core objectives like “connecting interfaces, integrating data and systems, and deploying smart contracts and blockchain networks.”

Bank of America Receives Patent for Storing Clients’ Crypto in Enterprise Accounts

Major U.S. bank, Bank of America, has won a patent for a system that allow enterprises to store customers’ crypto deposits. The filing outlines several different interactions between clients’ crypto holdings and an enterprise account, with one setup allowing the enterprise account to conduct transactions on the customers’ behalf, debiting and crediting the account as appropriate. The document also touches on fiat-crypto conversions, outlining a system for determining optimal exchange rates for an “essentially simultaneous” conversion.

Chinese Insurance Giant Ping An, Sanya City Gov’t Build “Smart City” With Blockchain

One of the world’s largest insurance corporations, China’s Ping An Insurance Group, has signed an agreement with the Sanya municipal government to build a “Smart City” backed by blockchain, artificial intelligence (AI), big data, and cloud computing. The cooperation on financial investment and “Smart City” construction will play a role in the major strategic urban development in China.

Mergers, Acquisitions, and Partnerships

South Korean Messaging App Kakao, Stablecoin Tether Partner for Blockchain Payment System

Major South Korean Internet conglomerate and service provider Kakao Corp (which own messaging app KakaoTalk) and new stablecoin Tether have partnered to develop the latter’s blockchain-based payment system. The new agreement will apply the former’s blockchain platform tech Klatyn, of Kakao subsidiary Ground X, to a blockchain-based payment system. The cooperation plans to work on enhancing “core requirements for payment services, such as speed, stability and reliability.”

ETH-Payment Platform OmiseGo, Singapore Ride Hailing App Partner for Blockchain Tech

Ethereum-based payment platform OmiseGo and blockchain protocol Mass Vehicle Ledger (MVL) have announced that they will work together to research blockchain technology. The two companies will develop a Proof-of-Concept (PoC) to test whether the decentralized OMG Network could work for MVL’s data record-keeping system, recording data collected from TADA on the OmiseGo platform. OmiseGo and MVL will also collaborate on further technical and research cooperation on possible blockchain applications in TADA’s services.

Electronics Firm Bosch Partners With IOTA for New IoT Data Device

Engineering and electronics manufacturing giant Bosch has partnered with IOTA, with plans to integrate its new data collection Internet of Things (IoT) device with the decentralized IOTA Data Marketplace. The new connectivity device, Bosch XDK (Cross Domain Development Kit), is “a programmable sensor device and Internet of Things prototyping platform” that also works as a sensor node solution. The device will combine sensor, data storage, and network technologies to allow users of all programming level to collect real-time data and sell it on the IOTA marketplace.

Major Spanish Telecoms Operator and IBM Partner to Manage International Call With Blockchain

Spanish telecommunications firm Telefónica has partnered with IBM in order to apply blockchain tech to managing international mobile phone call traffic. Telefónica, the seventh largest telecom company in the world by market cap, is valued at $51 billion according to Forbes. The partnership is aimed at streamlining certain Telefónica business processes, including the reliability and transparency of information registered from various network when routing international calls. The telecoms company will use the IBM Blockchain Platform to track each international call and data such as origin, destination, and duration.

German Holding Company Bitcoin Group SE Acquires 100% of Investment Bank Tremmel

Bitcoin Group SE, a German holding company, has acquired a 100 percent stake in investment bank Tremmel Wertpapierhandelsbank GmbH. Bitcoin SE operates what is reportedly the county’s only regulated crypto exchange, Bitcoin Deutschland AG (Bitcoin.de). With the acquisition, the crypto holding will now obtain the use of Tremmel’s banking license, allowing the company to “significantly expand” its crypto-related offerings and operate ATMs for cryptocurrencies in Germany.

Funding Rounds

Hong Kong Crypto Exchange KuCoin Raises $20 Million in Funding Round

Hong Kong-based international crypto exchange KuCoin closed a Series A funding round this week worth $20 million. The round was led by IDG Capital, Matrix Partners, and Neo Global Capital, and the exchange noted that the funds will go towards the release of KuCoin’s 2.0 platform as well as expansion into new markets.

Winners and Losers

The crypto markets have taken a hit this week, with total market cap around $185 billion, Bitcoin trading around $5,599, Ripple at $0.52, and Ethereum at $176 by press time.

The top three altcoin gainers of the week are ZeusCrowdfunding, GoHelpFund, and Coupecoin. The top three altcoin losers of the week are Etheera, Vivid Coin, and Olive.

Top three altcoin losers of the week:

For more info on crypto prices, make sure to read Cointelegraph’s market analysis.

FUD of the Week

“Crypto Hangover”: Nvidia’s Q3 Results Show Lack of Demand for GPU Crypto Units

American GPU manufacturer Nvidia released its third quarter earnings this week, showing a lack of demand for Nvidia’s GPU’s among crypto miners. The crypto frenzy late last year brought the prices for Nvidia gaming cards up, but with the bear market, the prices have not decreased quickly enough to attract customers waiting for more affordable cards, according to the Nvidia founder and CEO Jensen Huang. Huan told Reuters that the “crypto hangover lasted longer than we expected.”

Analysis: Bear Market, Declining Hashrates Makes Mining ETH Not Profitable

A report from U.S.-based global trading and tech firm Susquehanna has found that mining Ethereum (ETH) using a graphics processing unit (GPU) is no longer profitable. The analysis shows that profit per month for ETH miners using GPU rigs is now $0 as of Nov. 1, as opposed to the $150 per month in July 2017. Susquehanna notes reasons for the decline in profit include Ethereum’s falling price, but adds that in July 2017, miners profit was $147 even as ETH traded roughly around its current price.

Official Google G Suite Twitter Account Reportedly Compromised to Promote BTC Scam

The official Twitter account of Google’s G Suite appeared to tweet a Bitcoin (BTC) giveaway scam this week to its more than 800,000 followers. The tweet in question asked its followers to participate in a fraudulent 10,000 BTC giveaway, also announcing that Google’s G Suite now accepted crypto as a means of payment. Tech news outlet The Next Web later reported that the account was compromised through a third party marketing app that was authorized to post content on G Suite’s behalf. The scam also targeted major U.S. department retailer Target.

WSJ Report: SEC Opened Probe Into Erik Voorhees, Crypto Loans Firm Salt Over Token Sale

The Wall Street Journal reported this week that the U.S. Securities and Exchange Commission (SEC) had opened a probe in February against crypto loans company Salt Lending Holdings, which was once associated with crypto industry stalwart Erik Voorhees. The probe involves whether Salt’s 2017 $50 million token sale constituted a noncompliant securities offering and Voorhees’ potential involvement, which could break laws as he has effectively been prohibited from raising money in private markets after a SEC settlement in 2014.

US SEC Imposes “First” Civil Penalties Against Two ICOs for “Unregistered” Securities

The U.S. Securities and Exchange Commission (SEC) has levied civil penalties on two Initial Coin Offerings (ICOs) this week over their failure to register their token sales. CarrierEQ Inc. (Airfox) and Paragon Coin Inc. both reached settlements with the SEC, agreeing to “return funds to harmed investors, register the[ir] tokens as securities, file periodic reports with the Commission, and pay penalties” of $250,000 each. Both of the firms conducted token sales last year following the SEC’s warning that ICOs could be considered as securities offerings.

Prediction of Tthe Week

Bloomberg Analysts Predict BTC Price Fall As Low As $1,500

Bloomberg Intelligence analysts have predicted this week that Bitcoin “has further to fall,” noting that the coin is “no longer boring.” Hedge fund founder Travis Kling told Bloomberg that he “didn’t sleep well” in response to the recent Bitcoin Cash hard fork, adding that it could affect the entire crypto market.

Best Cointelegraph Features

Why Did Crypto Market Experience a $27 Billion Wipeout? Experts Discuss Factors

After the market saw several cryptocurrencies hitting new year-to-date lows, Cointelegraph looks at some of the reasons behind the $27 billion “wipeout.”

Opposing Bitcoin ABC and Bitcoin SV Factions’ Debates Grow Heated as the Bitcoin Cash Hard Fork Draws Closer

This week saw a volatile market amidst the Nov. 15 Bitcoin Cash hard fork, which divided the community into two “warring” factions: Roger Ver’s Bitcoin ABC and Craig Wright’s Bitcoin SV (Satoshi’s Vision).

Skirting the Great Wall, Part Three: The Paradox of Cryptocurrencies in China

In the third part of Cointelegraph’s series on Chinese cryptocurrency regulations (read part one – here, and part two – here), the article looks at the People Bank of China (PBoC)’s crypto regulatory interventions, as well as the role of China’s judiciary in cases involving crypto.

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TRON Launches Accelerator Program for DApp Developers

Decentralized Internet project TRON (TRX) is launching a $1 million accelerator program to support developers building DApps and products on the TRON protocol, according to a press release shared with Cointelegraph Nov. 16.

The initiative aims to facilitate consumer adoption of blockchain technology through TRON’s ecosystem following the recent acquisition of peer-to-peer file sharing service BitTorrent, Project Atlas, and payment service Poppy app. TRON’s protocol currently processes more than one million transactions and 600,000 wallets.

The startup will purportedly accept submissions to its accelerator through December, while the winners will be announced at TRON’s first international summit in January.

In October, TRON and China’s largest Internet search provider Baidu announced they will cooperate on cloud computing resources. The partnership between the two firms remains focused on the purchase and use of Baidu’s basic cloud computing resources, rather than being a connection “at the blockchain business level.”

Also in October, TRON’s CEO Justin Sun claimed its update dubbed Odyssey 3.1 would see it beat Ethereum on speed and EOS on cost. The changes include the launch of the TRON Virtual Machine, which would allow developers to test smart contracts before they transfer to the TRON mainnet.

As of press time, TRX is the 11th top cryptocurrency, trading at around $0.018, up by 0.27 percent on the day, according to CoinMarketCap.

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Chinese Blockchain-Related Company Xunlei Reports $45.3 Million Q3 Revenue

Chinese desktop software and blockchain-related company Xunlei has published its Q3 report Wednesday, Nov. 14. According to the report, the firm’s revenue increased in 2018 after the introduction of blockchain services.

The report notes that the company’s Q3 revenue reached $45.3 million, representing an increase of 1.1% year-over-year. The firm attributed $19.8 million of that revenue to its cloud and Internet value-added services sectors, which is an increase of 8.3 percent over the same period last year.

Lei Chen, CEO of Xunlei group, stated that blockchain remains one of the key investment areas for the company, noting:

“We believe that blockchain is a technology that can change our lives, and we will strive to make it available in different areas in a simpler and more cost-effective way.”

The company specifically mentioned its blockchain platform ThunderСhain, which has been launched this year, and lists recent blockchain-related partnerships, including a deal with the largest media group in China, People’s Daily, which is also the official newspaper of the Communist Party of China.

Xunlei, known for its P2P software and BitTorrent client and especially popular in China, re-oriented towards blockchain technology development in October 2017.

Back then, following a sustained downturn over two years, the company announced its first blockchain-driven initiative: the Link Token, which could be used to pay for some of Xunlei’s services. Shortly after, Xunlei became the best performing stock on Nasdaq, seeing up to 75 percent increase in shares, according to Bloomberg.

Later, in November, Xunlei came under scrutiny from China’s financial regulator following a state ban on Initial Coin Offerings (ICO). Consequently, its shares fell 40 percent. Despite the loss, Xunlei launched two new blockchain products in the spring, StellarCloud and ThunderChain Open Platform. Several months after the launch, the company’s CEO Lei Chen claimed that in Q2 Xunlei saw a $65.8 million in revenue, meaning a growth of over 70 percent on a year-over-year basis.

As Cointelegraph previously reported, in 2018 Xunlei also partnered with People’s Daily to construct a laboratory for “technology innovation” at the People Capital’s Blockchain Research Institute. Moreover, the two will develop a blockchain-driven platform to organize competitions, seminars, workshops, and promote and identify startups in the blockchain industry.

Several crypto-related companies have recently published their Q3 2018 reports: Japanese IT giant GMO Internet revealed a “historical performance” of its crypto-related sector, and Canadian Bitcoin (BTC) mining company Hut 8 declared a record revenue of $13.5 million, an increase by 126 percent compared to the previous quarter’s revenue of $5.9 million.

Moreover, Q3 2018 marks biggest quarter yet for Bitcoin revenue of Square — a U.S. financial services company that introduced Bitcoin support in its Square Cash payment app earlier this year.

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