Crypto Assets to Be Regulated Differently in the US, Potential Impact on Industry

The United States government could regulate crypto assets and tokens differently than stocks and traditional assets by altering the existing regulatory framework on securities.

On Dec. 22, CNBC reported that two congressmen — Warren Davidson and Darren Solo — have introduced a bipartisan bill entitled “Token Taxonomy Act,” in an effort to prevent over-regulation in the cryptocurrency space.

“In the early days of the internet, Congress passed legislation that provided certainty and resisted the temptation to over-regulate the market. Our intent is to achieve a similar win for America’s economy and for American leadership in this innovative space,” said Davidson.

When passed, what sort of impact could the bipartisan Token Taxonomy Act have on the cryptocurrency and blockchain sector?

More clarity, exactly what the industry needs

In a statement, the Blockchain Association — a Washington, D.C.-based non-profit trade association that represents many of the biggest companies in the cryptocurrency industry such as Coinbase, Circle and Digital Currency Group — said that the bill provides a definition to crypto assets and digital tokens that exclude them from being recognized as a security.

Throughout the past two years, many blockchain projects have left the U.S. market to pursue token sales in regions like Switzerland and Singapore, which have lenient and flexible policies regarding initial coin offerings (ICOs).

By providing a clear guideline on the regulatory nature of tokens and digital assets, the bill encourages blockchain projects to remain within the U.S. market and contribute to the growth of the local cryptocurrency and blockchain sector.

The vast majority of token sales and ICO projects — apart from a select few like Telegram that have reportedly conducted a private token sale with the approval from the U.S. Securities and Exchange Commission (SEC) — have disallowed investors in the U.S. to participate in token sales due to the ambiguity in existing securities laws.

Even projects such as 0x (ZRX) that have been listed by a U.S.-based strictly regulated cryptocurrency exchange Coinbase, which clears the project from being considered a security, did not allow investors in the country to contribute to the ICO.

“With these terms clarified, we can police bad actors while encouraging the good ones, giving US-based innovators the framework they need to build next-generation technologies and services here rather than doing that valuable work overseas,” the Blockchain Association said.

The bill also offers clarity on the taxation policy surrounding cryptocurrencies for the first time in the market’s history, eliminating the friction between blockchain networks and users.

Currently, users in the U.S. are required to declare capital gains taxes on all cryptocurrency transactions — small or big — because the Internal Revenue Service (IRS) of the United States federal government has recognized cryptocurrencies as a form of property.

Although the bill does not aim to alter the recognition of cryptocurrencies as a property, it imposes an exemption for capital gains taxes on transactions that do not exceed $600, deeming them as tax-exempt exchanges.

The Blockchain Association added:

“Also, this legislation includes provisions that would address issues with the tax treatment of tokens. In 2014, the IRS declared that ‘virtual currencies’ be treated as property, which means capital gains taxes need to be calculated for all transactions. This adds tremendous friction to decentralized networks. The legislation addresses this by providing a de minimis exemption for gains less than $600 and allowing for tax-exempt like-kind exchanges.”

Decentralization is key

The bill does not encourage the SEC and other enforcement agencies to acknowledge all types of tokens and ICO projects as non-securities. It still allows the SEC to exercise authority over tokens that are considered securities, based on a newly established definition and guideline.

On June 14, the SEC’s Director of the Division of Corporate Finance Bill Hinman said that a key factor in determining whether a token is considered a security under existing regulations is the level of decentralization of the project.

If a blockchain network is sufficiently decentralized and no central party has control over the majority of the project’s elements, including its monetary policy and development, the SEC director said in a speech that the native token of the blockchain network cannot be considered a security under existing regulations. Hinman said:

“If the network on which the token or coin is to function is sufficiently decentralized – where purchasers would no longer reasonably expect a person or group to carry out essential managerial or entrepreneurial efforts – the assets may not represent an investment contract. Moreover, when the efforts of the third party are no longer a key factor for determining the enterprise’s success, material information asymmetries recede.”

On that front, the SEC and the lawmakers behind the bill are in agreement that, as long as a security is sufficiently decentralized, it should be able to continue on without the interference from the authorities.

When passed, the bill is expected to allow both the token issuers and investors to better evaluate whether a token is recognized as a security or not, based on the newly amended securities policies. The bill could also encourage more companies to register with the SEC to distribute securities through the issuance of tokens in a private sale.

In the upcoming months, the Blockchain Association, the companies represented by the non-profit organization and U.S. regulators are set to cooperate in improving the bill and move it forward to gain the approval from the House and the Congress.

For a bill that has only been in the making for several months, the Blockchain Association said that it is not perfect in many ways. But, throughout 2019, industry leaders, experts and lawmakers will work together to solidify policies surrounding the cryptocurrency and blockchain space.

“Like all legislation in the early stages, we expect this bill isn’t perfect yet. However, what excites us is that it was proposed by a bipartisan team, demonstrating a vision for innovation and responsibility that is shared across the aisle. With the new Congress starting in January, we hope digital tokens will be an idea that we can build upon. We want to work together to debate the key issues, ensure adequate consumer protection, and work toward advancing legislation that represents our collective views,” the association stated.

Crypto tax policy reform needed

Cryptocurrencies like Bitcoin are fundamentally, structurally and conceptually different than stocks and traditional forms of assets. As such, the Bitcoin market behaves and moves differently than most stocks with extreme volatility and rapid price movements, mostly because the market is open for 24 hours a day for investors in the global digital asset exchange market.

The problem with cryptocurrencies — or with any emerging asset class in its infancy — is that an investor could record a 300 percent gain on paper by the year’s end and lose all of the profits in the following year.

Because losses are not carried across to the next year and crypto taxes are calculated in the same way as stocks and properties, the mismanagement of a cryptocurrency portfolio could lead to a big tax bill for investors.

On Dec. 21, the Wall Street Journal reported that investors could use certain strategies to lower taxes on cryptocurrency investments, such as selling and repurchasing crypto assets.

Without the implementation of such strategies, the aggressive approach of the IRS to collect taxes from crypto investors — as seen in the federal court order that demanded Coinbase to provide information on about 13,000 cryptocurrency trading accounts worth more than $20,000 between 2013 and 2015 — could affect many investors in the future.

Currently, the IRS is evaluating tens of thousands of trading accounts that traded between 2013 and 2015 to potential charge capital gains taxes on cryptocurrency investors. Investors that do not have the know-how on reducing tax rates could get hit hard by the IRS in the future, especially given that the tax policy around crypto remains identical with that of stocks and properties.

If the bill gets passed and a new definition is provided to crypto assets, most areas of the asset class, including taxation, are likely to be altered.

From 2017 to 2018, Bitcoin increased by around 1,900 percent, from $1,000 to $19,500. Since then, Bitcoin has dropped to $4,000 by around 85 percent. For an asset class that tends to increase and decline in value by margins that are not comparable to the stock market, it is impractical to rely on the same tax policies.

Even major projects are shutting down

On Dec. 13, Basis — a stablecoin project financed by some of the largest venture capital firms in the world, such as Andreessen Horowitz and Bain Capital Ventures — announced that it will shut down its operations and return the $133 million it raised to its investors.

Dissimilar to other widely adopted stablecoins like Circle’s USDC and Gemini’s GUSD, Basis incorporates an algorithm and alters the supply of the token to adjust to the price of other major crypto assets, like Bitcoin and Ethereum.

In an official statement, the Basis team said that, ultimately, the closure of the project came down to the securities law of the U.S.

“As regulatory guidance started to trickle out over time, our lawyers came to a consensus that there would be no way to avoid securities status for bond and share tokens (though Basis would likely be free of this characterization). Due to their status as unregistered securities, bond and share tokens would be subject to transfer restrictions, with Intangible Labs responsible for limiting token ownership to accredited investors in the US for the first year after issuance and for performing eligibility checks on international users.”

Based on the statement of Basis, it is likely that the SEC and the lawyers of the project deemed it was not sufficiently decentralized, as the development is led by a team of developers hired by the company.

Basis was considered a promising algorithm-based stablecoin project. But, inefficient regulatory frameworks and securities policies that consider crypto assets in the same way as stocks and traditional assets limited the scope of the project.

For the long-term growth of the cryptocurrency sector, the bipartisan bill is crucial in defining cryptocurrencies in a new manner to facilitate the development of blockchain technology and encourage innovation in the space. Jake Chervinsky, a government enforcement defense and securities litigation attorney at Kobre & Kim, said:

“The Token Taxonomy Act would provide exactly the type of regulatory clarity the crypto industry needs. Legislation like this is orders of magnitude more important than non-binding guidance from agencies like the SEC.”

While the time frame of the approval of the bipartisan bill is uncertain, industry leaders and experts remain generally optimistic in the first initiative led by the members of Congress to regulate cryptocurrencies efficiently.

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Chinese Fintech Incubation Zone Officially Begins Operations in Guangdong Province

The Chinese fintech incubation zone located in the Guangdong province has officially started its operations, Chinese news outlet Chinese Software Developer Network (CSDN) reports Dec. 21.

According to the article, the zone — which officially opened Dec. 20 — has a total area of 120 square kilometers and already hosts the headquarters of over 20 companies. The zone and its administration will reportedly offer the companies project financing, office space and policy guidelines, and will overall “promote the transformation and application of technological achievements.”

CSDN notes that the Guangdong financial high-tech zone will “focus on the major needs and major pain points of the financial [industries] encouraging blockchain and other technologies in finance, manufacturing, trade.” The zone will begin with fostering pilot projects, and then will move forward in order to “culvative a group of blockchain financial technology enterprises and innovation teams.”

In November, the “Guangdong, Hong Kong, and Macao Dawan District Blockchain Alliance” had been established to promote innovation and sustain the development of blockchain tech. CSDN mentions the three districts as areas for expanding the use of the technology.

China, which has long been cracking down on cryptocurrency by banning both domestic and foreign exchanges, and even crypto-related social accounts, seems to be heavily investing in blockchain technology. As Cointelegraph reported this week, a media copyright protection alliance has been created in Beijing to provide copyright protection employing blockchain technology.

Also in December, Shenzhen, a major city in the Guangdong Province and home to the first economic special zone in China, announced that it will use blockchain technology for electronic tax invoices.

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Blockstream, Swiss IT Consulting Firm Sign MoU for Blockchain Integration Services

Global blockchain company Blockstream has partnered with а Swiss crypto consulting firm to launch a blockchain-driven settlement network, according to a press-release Dec. 17.

Inacta AG and Blockstream have reportedly recently signed a Memorandum of Understanding (MoU) to provide integration services for Liquid — a sidechain solution launched by Blockstream in October. Liquid reportedly combines key features of public and permissioned blockchains, allowing for the issuance and transfer of different crypto tokens.

As per inacta AG’s release, the company will focus on “helping financial institutions to leverage the benefits of the Liquid blockchain.” The Swiss firm will provide support for clients considering issuing their own assets via Liquid.

In addition to that, inacta has integrated Liquid with its own platform, Tokengate, that was initially developed to make the initial coin offering (ICO) market in Zug Valley compliant and transparent.

This week, Blockstream also announced that it has expanded its crypto satellite services. The company is now broadcasting the BTC blockchain to all of Earth’s major land masses, with the recently-added fifth satellite covering the Asia Pacific region.

Switzerland’s Zug Valley, dubbed Crypto Valley for hosting multiple industry-related startups, has recently been ranked the fastest-growing tech community in Europe.

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Hong Kong Stock Market Regulator ‘Reluctant’ to Greenlight Bitmain IPO, Sources Report

Hong Kong stock market regulator is reportedly reluctant to allow Bitcoin mining equipment manufacturer Bitmain to conduct an initial public offering (IPO) in the city. Local English-language newspaper South China Morning Post (SCMP) made this claim in an article published Dec. 19, with reference to anonymous sources.

Citing two “sources familiar with the matter,” SCMP poured more cold water on the plans of mining giant Bitmain to go public, just a day after the Hong Kong Stock Exchange (HKEX) told Cointelegraph that any hesitation on part of the company was “rumors.”

According to the publication’s sources, Hong Kong’s stock market regulator thinks it is “premature for any cryptocurrency trading platform – or business associated with the industry – to raise funds through an IPO in Hong Kong before the proper regulatory framework is in place.”

As a result, SCMP suggests, current conditions “could be an insurmountable hurdle” for Bitmain and other cryptocurrency companies planning to launch an IPO.

Controversy has surrounded the mining giant’s IPO plans ever since rumors about them leaked into the community earlier this year.

Various factors — such as alleged poor sales — have already contributed to doubts about the likelihood that the IPO will be successful.

HKEX meanwhile repeated its refusal to comment on the Bitmain case when queried by SCMP.

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Israel: Financial Services Firm GMT Joins RippleNet

Israel-based financial services firm GMT has joined Ripple’s bank and payment provider network, the company confirmed in a recent press release.

The result of a “long and precise process,” the move reportedly will help the company remain “at the forefront” of the local finance industry.

Ripple, which operates blockchain-based financial products using its XRP token, has partnered with multiple financial institutions and banks to expand its international reach in recent years.

“After a long and precise process GMT was chosen to be Ripple’s representative in Israel, by so joining Ripple, and its partners, in creating a global financial system, with high-end technology and values such as; [sic] transparency and affordable costs,” GMT’s statement reads.

In a private statement to Cointelegraph, a Ripple representative said that they can “confirm that [GMT is] a Ripple customer, similar to the 100+ customers on RippleNet.”

Ripple’s partners currently include MoneyGram, American Express and Japan’s SBI Group, among others.

Remittances have formed a central area of interest for new partners. This month, the United Arab Emirates’ UAE Exchange partnered with the blockchain firm to set up a payments corridor to Asia.

Earlier this month, enterprise blockchain consortium R3 chose XRP as the first cryptocurrency in its new universal payments decentralized application (DApp).

Ripple has meanwhile faced mixed publicity over its corporate structure, with criticism coming from the conflicting accounts about its relationship with XRP.

XRP is currently up almost 3 percent on the day to press time, trading at $0.33.

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Hong Kong's New Regulation ‘Might’ Be Harmful for Local Crypto Industry, Experts Say

New regulations for crypto-related companies, which Hong Kong’s Securities and Futures Commission (SFC) announced earlier , might prevent crypto entrepreneurs from entering the market. Expert comments on the situation were reported by business media Nikkei Asian Review on Monday, Dec. 17.

Timothy Loh, owner of a local law firm, told Nikkei that some entrepreneurs might decide not to participate in the new framework in order to “maintain their current shares in the market.” “The requirements of the SFC initiative may prove too burdensome for some operators,” he added.

Other speakers cited by Nikkei believe that higher trading costs could discourage institutional investors from entering the market, which could work against the plans to stabilize markets with their presence. However, the counterargument is that a stricter policy may lead to greater investor confidence, Nikkei notes.

The SFC first announced the new regulatory framework in November. The guidelines compared cryptocurrency exchanges to existing licensed providers of automated trading services, pointing out that they also need to protect investors.

Moreover, the SFC has major concerns about money-laundering cases and fraud, which have prompted the regulator to introduce new legislation. It will likely be applied to exchanges, traders, investment funds and other crypto-related businesses.

Under the new guidelines, investment funds are obliged to obtain a license from the SFC in the event that more than 10 percent of their assets consist of Bitcoin (BTC) or other cryptocurrencies. Moreover, in this case, they will be allowed to sell products only to professional investors.

Before applying for a license, crypto entrepreneurs can participate in a “regulatory sandbox” to test their solutions.

The new regulation also refers to initial coin offerings (ICO), Nikkei reports. For example, all tokens have to fulfill the SFC’s requirements and are obliged to have existed for at least 12 months before an ICO is launched.

Hong Kong is known for its significantly more lenient approach toward cryptocurrencies in comparison to mainland China, which upholds an effective ban on crypto activities. According to a recent report published by CryptoCompare, the highest quantity of top exchanges is still located in Hong Kong (10) and Singapore (11).

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Hodler’s Digest, Dec 10-16: Top Stories, Price Movements, Quotes and FUD of the week

Top Stories This Week

CEO of Defunct Mt. Gox Exchanges Faces Ten Year Jail Sentence Over Embezzlement

Mark Karpeles, the former CEO of now-defunct Japanese Bitcoin exchange Mt. Gox, could be facing a ten-year jail sentence over charges of embezzlement. Karpeles, who headed the exchange during the major hack in 2014 that resulted in the loss of 850,000 BTC ($2.87 billion at press time), has denied any wrongdoing. Prosecutors in a Tokyo court this week have claimed that Karpeles had stolen around $3 million worth of funds from the exchange, in a case not connected to the hack.

Only Two ASIC Mining Rigs Remain Profitable in Current Crypto Markets

During this week’s cryptocurrency market crash, crypto mining machines are having trouble making a profit for their operators, according to data from a mining profitability site. At one point this week, ASICMinerValue.com  — which calculates real-time profitability for ASIC miners — found that only two were currently making any profit. Both of the profit-reaping miners were released in October 2018 and were making $0.58 and $0.21 in profits at the time. At press time, however, more than two miners are now in the green.

Canadian City of Calgary Launches Digital ‘Calgary Dollar’ for Intracity Transactions

The Canadian city of Calgary, located in the province of Alberta, has launched its own digital currency: the Calgary Dollar. The digital currency will allow citizens, using an app on their devices, to support small businesses and nonprofits by keeping funds within the city. The Calgary Dollar can be used at shops and restaurants that participate in the program and can be earned in various ways, such as by inviting friends to the app or posting an ad for goods and services priced in the digital currency.

US SEC Chairman Speaks Positively of Initial Coin Offerings as Capital Raising Tool

The chairman of the United States Securities and Exchange Commission (SEC), Jay Clayton, said this week that Initial Coin Offerings (ICOs) “can be effective” instruments for raising capital. During a speech given this week, Clayton noted that there are a “number of concerns” related to ICOs, but that they can be “effective” ways to raise capital providing that securities laws are followed. Clayton also mentioned the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub), which will facilitate the agency’s involvement in fintech.

Samsung Refutes Rumors of Plans to Add Crypto Cold Wallet on Galaxy S10 Smartphone

Korean-headquartered transnational tech conglomerate Samsung has refuted rumors this week that it plans to launch a crypto cold wallet on its Galaxy S10 smartphone. The rumors began after the company filed three E.U. trademarks for blockchain- and cryptocurrency-software. SamMobile confirmed to Cointelegraph that the trademarks are part of the development of a Samsung proprietary cold wallet, which “may be launched” with the Galaxy 10 smartphone.

Winners and Losers

The cryptocurrency markets are holding steady, with Bitcoin (BTC) trading at around $3,275, Ripple (XRP) at around $02.38, and Ethereum (ETH) at around $86,29. Total market cap is about $104 billion.

The top three altcoin gainers of the week are Bolenum (BLN), Vestoria (VSTR) and SURETY (SURE). The top three altcoin losers of the week are BitF (BITF), KWH Coin (KWH) and DACH Coin (DACH).

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

Most Memorable Quotations

“I believe that ICOs can be effective ways for entrepreneurs and others to raise capital. However, the novel technological nature of an ICO does not change the fundamental point that, when a security is being offered, our securities laws must be followed,” — Jay Clayton, United States Securities and Exchange Commission (SEC) chairman

“We’re totally at home in winter,” — Tyler Winklevoss, speaking about the crypto bear market

“The audience is more sober now—the drug is gone. […] But it’s not going to zero. We’re at the methadone clinic,”  — Mike Novogratz, founder of Galaxy Digital

Prediction of the Week

Tom Lee: Bitcoin’s Fair Value Price Could Reach as High as $150,000

Crypto bull and co-founder of Fundstrat Global Advisors Tom Lee said this week that Bitcoin’s (BTC) “fair value” is much higher than its current price. In a note from this week, Lee also said that the coin’s fair value is between $13,800 and $14,800, also adding that the value could reach as high as $150,000. Lee added: “In fact, working backwards, to solve for the current price of Bitcoin, this implies crypto wallets should fall to 17 million from 50 million currently.”

FUD of the Week

China: Central Bank Governor Defines STOs as ‘Illegal Financial Activity’ in the Country

The People’s Bank of China (PBoC), the country’s central bank, highlighted the illegality of Security Token Offerings (STOs) in the country in a statement this week. Pan Gongsheng reportedly told a summit in Beijing this week that both STOs and ICOs were “rampant” in the mainland, despite the “nationwide clean-up” of the crypto markets in China last year. In regards to the “STO business” in China, Gongsheng added that cryptocurrencies are still associated with crime.

Major Stablecoin Profit Basis to Shut Down and Return Funds to Investors

Major United States-based stablecoin project Basis will shut down operations and return most of its funds to investors. The algorithmic stablecoin project will return the majority of its $133 million in funding that it raised during a private placement in April, according to a report.

Bloomberg later reported that Basis’ CEO Nader Al-Naji confirmed that the impetus to close the project came from regulatory concerns over a type of token in Basis’ — as well as other algorithmic stablecoins’ — a system known as a “secondary token,” which helps keep the coin’s price stable. Al-Naji noted that there was no way to “escape” classification as a security.

Head of Largest Romanian Crypto Exchange Arrested for Fraud on US Warrant

Vlad Nistor, the CEO of Romania’s largest crypto exchange Coinflux, was reportedly arrested on a warrant from the U.S. for fraud, organized crime and money laundering. Coinflux is an online digital currency trading platform, with reportedly more than 200 million euro worth of Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Ripple (XRP) in transactions. Nistor was allegedly arrested in Romania at the behest of the U.S.

After this arrest, CoinFlux posted an announcement about a temporary suspension of all digital currency exchanges, noting that the investigation has also restricted its access to some parts of the platform.

Best Cointelegraph Features

Europe Takes Serious Steps Toward Blockchain Adoption

Cointelegraph explores how Europe is orienting itself towards blockchain and digital ledger technology as a whole. Looking at several initiatives, including the European Blockchain Partnership and the blockchain-based healthcare project, the analysis examines how Europe is working to become a “global leader” in DLT.

From South Korea to IBM Food Trust – How Blockchain Is Used in the Food Industry

In this analysis, Cointelegraph looks at how different companies and areas in the food industry use blockchain technology to bring transparency to their food chains, and why that the traditional use of blockchain doesn’t always work here.

Article First Published here

Cryptojacking Overtakes Ransomware as Top Malware in Some Countries

Cryptojacking, the unauthorized use of another’s hardware to mine cryptocurrency, has become the biggest cyber threat in many parts of the world, Bloomberg reported Dec. 14.

According to research from cyber security research firm Kaspersky Lab, cryptojacking overtook ransomware as the biggest cybersecurity threat particularly in the Middle East, Turkey, and Africa. In Afghanistan and Ethiopia over one out of four detected malware are cryptocurrency miners, according to Kaspersky’s data.

As cited by the Bloomberg, Kaspersky’s research “shows crypto mining attacks have risen almost fourfold in the region, from 3.5 million in 2017 to 13 million this year.” The cybersecurity firm reportedly also claimed that cryptojacking incidents are “likely to continue given the increased use of digital currencies.”

A report released by Kaspersky in November declares that the reason for the rise of cryptojacking malware compared to ransomware may “be due to the fact that people from developing markets are not so eager to pay a ransom.”

Not only PC but also smartphone users are targeted by unauthorized mining software — from the 2016-2017 period to the 2017-2018 period, these kinds of attacks reportedly increased by 9.5 percent.

Fabio Assolini, Kaspersky’s Senior Security Researcher, told Bloomberg that “the [Middle East, Turkey, Africa] region is becoming more appealing to cyber-criminals, with financial and malicious cryptomining attacks taking center stage.” Assolini also claimed that such attacks are becoming increasingly popular because they are “less noticeable” than ransomware.

Still, the increase in the popularity of this kind of malware has not been global. For instance, this year it registered a decrease of 15 percent in Zambia and 11 percent in Uzbekistan, according the cybersecurity firm. The report concludes

“Last year we asked what tips the scales for cybercriminals? Today, this is no longer a question. Miners will keep spreading across the globe, attracting more people.”

Cryptojacking is not the only way in which cybercriminals use cryptocurrency. As Cointelegraph reported in October, users of the popular video game Fortnite have been targeted by a malware that steals Bitcoin (BTC) wallet addresses.

Not only individuals resort to such actions in search of financial gains. According to a Chinese cybersecurity company, after targeting cryptocurrency exchanges, North Korean hackers have started to steal cryptocurrencies from individuals.

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US Credit Union Blockchain Consortium Joins R3's Global Ecosystem

CULedger, a credit union service organization (CUSO)-owned blockchain consortium, has joined enterprise software firm R3’s global blockchain ecosystem. The partnership was officially revealed in a press release published Dec. 13.

Based in Denver, Colorado, CULedger reportedly delivers blockchain applications to credit unions and their members, using the technology to mitigate cybersecurity and fraud risks, as well as streamline administrative and operational processes to save time and costs. The firm also provides a specific blockchain-based identification solution for credit union members.

As the press release notes, the consortium joins the R3 global network, which has to date reportedly gathered over 200 financial services companies, tech firms, central banks, regulators, and trade associations to collaborate on or use its enterprise-grade blockchain platform “Corda.”

Corda has been designed to work within the financial services industry and uses a permissioned distributed ledger technology (DLT) system to restrict data access to the required participants only. This July, R3 released a commercial version of Corda, dubbed “Corda Enterprise,” aimed specifically at businesses.

The Corda platform has seen a wave of positive adoption news in recent months.

Just in December, R3’s Corda-based Euro Debt Solution was used by a German-French-Dutch triad of banks to successfully complete a live commercial paper transaction; major Japanese financial services company SBI Holdings announced its partnership with R3 to boost use of Corda in Asia; and 26 French companies and five major banks completed a know your customer (KYC) test using Corda.

In mid-October, United Kingdom-based bank Natwest announced it would be integrating a new blockchain platform based on R3 Corda technology for use in the syndicated loans market.

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UAE Exchange, Ripple to Launch Blockchain Remittances to Asia by Q1 2019

United Arab Emirates-based UAE Exchange has partnered with Ripple to launch blockchain-based cross-border remittances to Asia by Q1 2019, Reuters reports Dec. 13.

According to the report, UAE Exchange, a part of payments and foreign exchange company Finablr, is among the key players in the Middle East region, which sees high levels of remittance inflows from expatriate workers. As Reuters notes, Asia was one of the largest recipients of the $613 billion in remittances estimated to have been sent globally in 2017.

While remittances are at present largely sent via foreign exchange branches, CEO of Finablr Promoth Manghat has said that blockchain-based alternatives hold “tremendous promise for the industry.” Aiming to bring the technology to the mainstream via UAE Exchange’s joint venture with Ripple, Manghat has said:

“We expect to go live with Ripple by Q1, 2019 with one or two Asian banks. This is for remittances to start with, from across the globe into Asia.”

UAE Exchange’s partnership with Ripple for cross-border payments dates back to February of this year, making the firm, according to Reuters, the “largest payments firm in the Middle East” to use RippleNet. Lenders in the region who have reportedly joined RippleNet include the National Bank of Ras Al Khaimah RAKB.AD and Kuwait Finance House.

As reported just yesterday, the UAE’s central bank is currently collaborating with the Saudi Arabian Monetary Authority (SAMA) to issue a cryptocurrency that will be accepted in cross-border inter-bank transactions between the two countries.

In early October, it was revealed that a digital currency pegged to the UAE’s fiat currency, the dirham, would soon have its own retail payment system open for Dubai consumers.

As of press time, Ripple’s native token XRP is trading at roughly $0.30, down just over one percent on the day, and over 12 percent on the week, according to Cointelegraph’s XRP Price Index.

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Dutch Central Bank Proposes License Requirement for Cryptocurrency Service Providers

Cryptocurrency service providers will soon be required to obtain a license from the central bank of the Netherlands, major Dutch news outlet DeTelegraaf reports Dec. 11.

The article explains that the measure has been undertaken hoping that it will “prevent such cryptocurrencies being used to launder money obtained through crime or to fund terrorism.”

To qualify for a license, providers will reportedly need to know who their customers are and report unusual transactions. All of this data will be monitored by De Nederlandsche Bank, the Dutch central bank.

After the implementation in April of similar laws in Japan obliging cryptocurrency exchanges to report dubious cryptocurrency transactions, a notable increase in the number of such reports was noted this winter.

In August, an executive at the Dutch central bank stated that cryptocurrencies aren’t recognized as “real money,” but that the bank has no plans to ban them. Also in August, an advisor of the central bank claimed that Bitcoin’s (BTC) price changes coincide with Google searches for the cryptocurrency.

As Cointelegraph reported in October, the Port of Rotterdam has partnered with both a major Dutch bank and Samsung to test blockchain use for shipping in Europe’s largest port. Also in Holland, the country’s largest supermarket chain, Albert Heijn, revealed in September that it is using blockchain to make the production of its orange juice more transparent.

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Crypto.com Nets Ex-PayPal Exec to Increase Merchant Cryptocurrency Adoption

Hong Kong-based cryptocurrency payment platform Crypto.com has hired a former PayPal executive, the company confirmed in a press release Dec. 11.

Tyson Hackwood will join the crypto firm as its senior vice president and head of global merchant acquisition. Crypto.com, which came into being after cryptocurrency debit card provider Monaco acquired the domain name for a reported $10 million in July, seeks to increase consumer and merchant adoption for point-of-sale (PoS) transactions.

Hackwood was previously head of the Australian branch of PayPal Here, the company’s own PoS division, followed a role as head of Asia Pacific for mobile and web payment offshoot Braintree.

“As we develop the Crypto.com Chain to fulfil the current industry need to pay and be paid in crypto, Tyson will play an important role in expanding the number and quality of merchants that are part of our network,” the CEO of Crypto.com Kris Marszalek commented.

Hackwood said he would additionally focus on increasing merchant uptake of the Crypto.com product, at a time when multiple competitors are seeking to corner the PoS market.

Despite the downturn in cryptocurrency prices throughout 2018, the number is tipped to expand beyond crypto industry names such as BitPay and Coinbase.

When payment company Square unveiled its new payment terminal last month, rumors soon followed that Bitcoin (BTC) functionality could soon form an additional feature of the device. Square had previously launched a Bitcoin wallet service for its users.

In August, former PayPal president David Marcus quit his post at Coinbase amid concerns over a conflict of interest.

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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.

Article First Published here

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.

Article First Published here

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.

Article First Published here

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.

Article First Published here

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.

Article First Published here

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).

Article First Published here

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.”

Article First Published here

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.

Article First Published here

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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