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.

Article First Published here

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.

Article First Published here

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.

Article First Published here

European Central Bank Exec Calls Bitcoin the ‘Evil Spawn of the Financial Crisis'

Executive Board member of the European Central Bank (ECB) Benoit Coeure considers Bitcoin (BTC) to be the “evil spawn of the [2008] financial crisis,” Bloomberg reports Nov. 15.

Coeure reportedly made his acid remarks at the Bank for International Settlements (BIS) in Basel. The BIS’ general manager Augustín Carstens has likewise previously made a spate of crypto-skeptical remarks, notably characterizing Bitcoin as a “combination of a bubble, a Ponzi scheme and an environmental disaster.”

Explicitly recalling Carstens’ characterization, Coeure framed his criticisms of the ten year old innovation with a reference to the aftermath of the Lehman Brothers bankruptcy in fall 2008 – the tipping point for economic turmoil, global recession, and, subsequently, the controversial “too big to fail” rationale for state intervention:

“Few remember that Satoshi [Nakamoto, the inventor of Bitcoin] 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.”

After this historical overture, Coeure continued to address international monetary authorities’ present-day pursuit of cryptocurrency tokens and distributed ledger technology (DLT) initiatives. While acknowledging the widespread interest, he claimed that “there is broad agreement that a central bank digital currency, in whatever form, is unlikely to be issued within the next decade.”

The ECB official’s stance is at odds with remarks from International Monetary Fund (IMF) managing director Christine Lagarde just yesterday. Speaking at the the Singapore Fintech Festival Nov. 14, Lagarde urged the international community to “consider” endorsing central bank-issued digital currencies (CBDC), arguing they “could satisfy public policy goals,” specifically “financial inclusion.”

Coeure’s argument is also directly contrary to that of Stanley Yong, Chief Technical Officer (CTO) of IBM’s Blockchain for Financial Services, and a veteran of Singapore’s central bank, the Monetary Authority of Singapore.

Yong stated this week that CBDCs are “the only way” to mitigate the “kinds of risks that came about during the Lehman crisis of 2008,” and could specifically prevent a settlement system freeze – a systemic failure that affected financial systems across multiple countries during the Lehman fallout.

Article First Published here

October ICO Market Overview: Trends, Capitalization, Localization, Success Rate

Disclaimer: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, you should conduct your own research when making a decision.

The ICOmeter aims to provide the accurate and concise information about the development of the ICO market in the previous month, and its relation to the all-time statistics. The ICO market data is provided by ICObench, based upon the projects’ announcements recorded in ICObench database, which includes over 4700 ICOs since August 2015.

ICO market situation in October is the result of different trends: the inertial forces put in motion months ago, during a period of stronger confidence, seem to still be influencing the structure of the market, while the more recent negative tendency could influence the decision-making of investors.

At the same time, the final outcome seems more confident than that of September. In spite of a smaller number of ICOs ending with a positive result, as only 54 raised at least $1, versus 67 the previous month, the capital gathered has been $508.54 million versus $403.10 million, a positive gain of 26 percent.

The ICO market indicators are still far from the high levels of some months ago, for instance, June 2018 record with 253 successful ICOs and $1.5 billion raised. However October shows some signs of recovery after September’s minimum. The long-lasting permanence of the Ethereum price in negative territory is still affecting the mood of the market, but the attitude of investors toward the new issuing of tokens seems to diverge slightly from the trend of the cryptocurrency, which most ICOs are based on.

October’s ICOs: a stable composition

Alongside the results, it could be useful to consider the expectations, which shaped the market during October 2018. A total of 223 ICOs started during this month, versus 249 during September, and almost the same number of projects chose October for setting their end date: 158, compared with 154 ICOs ending in September, with a average of about 555 ICOs going live daily during the month, including the projects, which had started previously and were still ongoing throughout the month.

The data presented in the previous chart is, nevertheless, influenced by the time gap that exists from the moment when a token issuing event is scheduled to its actual beginning. This reflects, in fact, the expectation that exists when the ICO is set, and not when it is actually starting. Therefore, October’s data is a result of optimistic market expectations, while the recent more cautious attitude of investors could emerge, eventually, in the composition of ICOs over the next few months.

As a matter of fact, the number of new ICOs listed by ICObench during October (219) is below that of September (274), very far from the record achieved between February and April, and the minimum considering the last 12 months.

ICOs by size: more different and with better results

A distinctive feature of ICOs is the strong dissimilarity between projects, which makes it difficult to analyze them by considering aggregate and average values. As a matter of fact, measuring the envisaged hard caps (HC) of all the ICOs ending in October, it is possible to detect a slight contraction in their size. Thus, the hard cap average value was about $28 million (compared with almost $38 million for ICOs ending last September), while the largest ICO ending during the month aimed to raise $400 million (compared with $1 billion for September’s largest one).

On the basis of the data published in whitepapers, it is possible to say that the degree of divergence among the HC goals of the ICOs ending in October was lower than that for the same data for September. Considering the ICOs, which are possible to label as “large,” the span between their maximum goals has decreased since September, while the range was greater for the hard caps of the “medium-large” ICOs.

The actual results of the token issuing events ending during the month radically overturn the picture forecasted on the basis of the whitepapers published by ICOs: the average size of the capital gathered rose significantly from September (from $6 million to $9.4 million), with an increasing divergence among the ICOs, greater among the “large” and “medium-large” categories. Besides, the higher result reached by a single ICO during October ($136 million) was far above the best performer of September ($46.6 million).

During October, the highest 5 percent of the sample (considering capitalization) accounted for about 41.9 percent of all the funds gathered by ICOs ending during the month, which was concentrated in just three projects. In September, the top 5 percent (gathered by four ICOs) corresponded with about 29.3 percent of the total raised that month.

ICO by location: a strong leading group and some surprises

October’s data didn’t bring about a relevant change in the ranking of countries with the largest number of ICOs setting up their headquarters there. Singapore, USA, and the United Kingdom (the latter didn’t account for Gibraltar, acting as an overseas territory) are the countries which hosted the most ICOs launched during the last month. Therefore, no variations affected the relative positions of the top 10 countries for number of hosted ICOs since 2015, while, in this general placement, it is possible to notice some movement below the higher rankings, such as the rise of the Czech Republic, from 24th to 23rd position, or Belarus and Georgia, climbing three position each (the first from 46th to 43th, the latter from 49th to 46th).

Considering the ranking among countries by economic indicators, the data confirms the stability of a strong leading group: the countries hosting the ICOs which are collecting the most funds in October are the same that occupy the top positions in the rankings for total funds gathered up to September: Singapore, USA, and Switzerland, while the only change among the top 10 in the cumulative ranking since 2015 is the rise of Estonia, from 8th to 7th position (overcoming the British Virgin Islands).

The economic data confirms some of the movements already reported, considering the number of ICOs (for instance, the dynamism of Georgia and the Czech Republic). Moreover, they reveal a new entry, even in the lower part of the rankings: during the month of October, the first ICO hosted by Zimbabwe ended successfully, gathering little more than $8 million (the country is now ranked in 65th position).

Success expectations: far from actual results, but closer

The goals of the ICOs scheduled to end in October remain similar to the previous month: considering the sum of all the hard caps set for the ICOs ending in October, the amount was almost stable in terms of absolute value (a decline of 1 percent compared to September’s data).

Moreover, the ratio of the cumulative HC on the market capitalization of Ethereum at the beginning of the month was higher than September’s, rising from 11.85 percent to 14.18 percent of the Ethers available on the market. This ratio always reflects very optimistic assumptions, but October’s results are closer to the desiderata than the data referring to the previous month: indeed, the funds raised are about 2.36 percent of the average monthly market capitalization of Ether, while the value was about 1.74 percent in September.

If the envisaged higher threshold was stable, the planned soft caps (SC) grew, from a cumulative value of about $476.7 million for ICOs ending in September, to $524.9 million in October. As a result, the gap between HC and SC is reducing: the cumulative value of the hard caps planned for October was 6.4 times the sum of all the soft caps, whereas the ratio was 7.1 a month ago. The trend could indicate a more attentive evaluation of projects, representing a more prudent minimum level of capitalization.

Considering the final data about the funds raised, the funnel between expected and actual results remain, nevertheless, very tight, as only 10 percent of the envisaged cumulative hard cap was reached during October (the value was 11 percent in September). By the way, if it is true that the number of ICOs collecting at least $1 decreased compared to one month ago, among the “survivors,” the number of ICOs achieving their soft cap (31 versus 26) and their hard cap (two versus one in September) was nevertheless higher.

Analyzing data about October’s ICOs, it is possible to say that the outcome seems very far from the planned target, at least in terms of aggregate values. The market is still applying a harsh selection process, but the general picture seems to show some improvement and the rise of several significant variables, first of all – the total amount offered by the investors.

Article First Published here

Huobi’s US-Based Strategic Partner HBUS Hires Former Exec of VC Firm Draper Athena

HBUS, the strategic partner of top crypto exchange Huobi, has hired a former executive of venture capital (VC) firm Draper Athena, according to a press release shared with Cointelegraph Nov. 13.

The HBUS trading platform, which currently employs around 40 people in their headquarters in San Francisco, has officially announced the appointment of Jay Ryu, formerly of Draper Athena, as Vice President of Corporate Development.

As the press release states, Ryu previously worked with prominent figures in the VC industry, such as Draper Athena chairman Tim Draper, well-known for his pro-crypto stance.

According to the report, with seven years of experience as Venture Capital Director at Draper Athena, Ryu led technology investments across Silicon Valley, Asia, and the Middle East. Apart of Draper Athena, the VC expert is also a founder of investment consulting group Rage Partners, as well as a former managing partner and strategic advisor for the private equity group Checkmate Capital.

The new HBUS entrant commented in the release that the current condition of the crypto and blockchain industry is “drastically different than what we witnessed last year,” stressing that the community is “rapidly maturing,” which attracts more institutional players to the field.

Huobi, the third largest crypto exchange by trade volume, first announced their U.S. strategic partner in June this year. Following the announcement, HBUS’ trading platform went live on July 10, offering its customers trading in 22 cryptocurrencies, including  Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Ethereum Classic (ETC), and Bitcoin Cash (BCH).

Reportedly positioning themselves as “aggressively” competitive with major crypto services such as Coinbase and Robinhood, HBUS has recently announced the release of its API for “experienced traders,” intending to expand crypto-related tools for institutional investors.

At press time, Huobi is ranked 3rd among crypto exchanges on CoinMarketCap by daily trade volumes, with about $388.2 million in trades. HBUS is ranked 142nd for daily trade volumes, seeing about $255K in trades over the past 24 hours.

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Ripple, Monero, NEM See Solid Growth Amid Calm, Mostly Green Markets

Monday, Nov. 12: crypto markets are seeing a wave of stability, with most major assets seeing low-level fluctuations both red and green, with just a few exceptions, as data from Coin360 shows.

Market visualization. Source: Coin360

Bitcoin (BTC) is up around 0.85 percent, trading around $6,354 at press time. After a period of protracted stability, the top coin saw a recent spate of downwards momentum and has been trading beneath $6,400 for the past several days. After an intra-week low of $6,307 yesterday, Nov. 11, Bitcoin has stemmed its losses and pushed back above the $6,350 mark.

On the week, the top cryptocurrency is just a little down from the start of its weekly chart, in the red by a slight 0.4 percent. On the month, Bitcoin is up around one percent.

Bitcoin 7-day price chart. Source: Cointelegraph Bitcoin Price Index

The market’s leading altcoin Ethereum (ETH) has also seen a fractional gain, up around three quarters of a percent to trade at $210 at press time. Correlating with Bitcoin, the altcoin saw an intra-week peak at around $220 Nov. 7, declining in the following days to trade as low as $207 Nov. 11 before recovering ground today.

On the week, the asset is just under one percent in the green, but monthly growth is a healthy 8.5 percent.

Ethereum 7-day price chart. Source: Cointelegraph Ethereum Price Index

Ripple (XRP) has outstripped all of the top ten coins on CoinMarketCap, sealing almost six percent growth to trade at around $0.53 at press time. While still below its weekly peak at over $0.55 Nov. 6, Ripple saw a strong surge during the hours before press time, having traded sideways at a lower price point around $0.51 in recent days.

On the week, Ripple’s growth is now a solid 5.2 percent, with monthly gains at 25.6 percent.

Ripple 7-day price chart. Source: Cointelegraph Ripple Price Index

Most of the remaining top ten coins on CoinMarketCap are in the green, seeing growth capped below a two percent range, with the exception of anonymity-oriented altcoin Monero (XMR), which has seen solid a 3.35 percent gain to trade at around $107.03.

After a period of heated controversies ahead of its forthcoming hard fork Nov. 15, Bitcoin Cash (BCH) has tipped slightly into the red, down around 0.8 percent to trade at $527.74 at press time.

Mati Greenspan, an eToro senior analyst, has today pointed out on Twitter that despite “all this drama in BCH [Bitcoin Cash] and still Google searches aren’t even coming close to BTC [Bitcoin]. Tell me again, which is the real Bitcoin?”

Greenspan provided a screenshot of Google Trend analytics for the past 30 days, which show that Bitcoin — sometimes dubbed Bitcoin Core — continues to significantly outflank Bitcoin Cash in terms of Internet searches.

Comparison of Bitcoin (BTC) and Bitcoin Cash (BCH) Google searches over the past 30 days. Source: Google Trends

The top twenty coins by market cap are seeing more mixed red and green, with the 15th highest-ranked crypto NEM (XEM) a significant outlier, up 16.3 percent to trade at about $0.108 at press time. NEM saw a sudden, steep uptick during earlier trading hours to peak at $0.114, before correcting just slightly downwards ahead of press time.

NEM 24-hour price chart. Source: CoinMarketCap

Altcoins DASH (DASH) and IOTA (MIOTA) have both seen above-average growth over a 24 hour period, up 3.3 and 4.5 percent at $165.07 and $0.50 respectively.

Tezos (XTZ) and privacy-focused altcoin ZCash (ZEC), ranked 18th and 19th largest by market cap, are each down just a little over 2 percent on the day, trading at about $1.29 and $127.44 respectively.

Total market capitalization of all cryptocurrencies is around $212.9 billion as of press time, down from an intra-week high of around $220.7 billion Nov. 7.

7-day chart of the total market capitalization of all cryptocurrencies: Souce: CoinMarketCap

Today, Japanese IT giant GMO Internet published its third quarter (3Q) report, revealing a “historical performance” of its crypto-related business segments despite “the harsh external environment.”

Meanwhile in China, a new blockchain alliance has been formed by the Guangzhou City Blockchain Industry Association, the Hong Kong Blockchain Industry Association, and the Macau University Innovation Center to collaborate on four new finance-oriented blockchain platforms.

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Hodler’s Digest, November 5-11: Star Trek’s Captain Kirk Defends ETH Decentralization, While Fake Elon Musks Overrun Twitter

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

Elon Musk Impersonators Flood Twitter With Fake Crypto Giveaways

Although impersonators on Twitter pretending to be famous celebrities offering crypto giveaways are many, this week saw an influx of these crypto pretenders posing as Tesla CEO Elon Musk. After compromising verified accounts with the blue check mark, scammers would change the name and picture to appear to be Musk, asking in comment threads for people to send them small amounts of crypto in exchange for more crypto sent back in a fake “giveaway.” According to news reports, one fake Musk account received around $170,000.

China’s Central Bank Scrutinizes Crypto Airdrops, Questions Their Legality

The People’s Bank of China (PBoC), the country’s central bank, has begun to scrutinize crypto airdrops, which is refers to as “disguised” Initial Coin Offerings (ICO). This week’s report from the bank notes that the entity is strictly anti-ICO and crypto trading, noting the high risks of financial fraud and pyramid schemes. The report notes that “airdrops” are potentially evading the regulation concerning the public token sale model, adding that they capitalize on speculation in the market to drive their own profits.

Star Trek’s William Shatner Tweets Thumbs up in Support of Vitalik Buterin

William Shatner, the former Captain Kirk on popular American television show Star Trek, tweeted a thumbs up at Ethereum (ETH) co-founder Vitalik Buterin this week. The celebrity’s tweet led to backlash from crypto Twitter trolls that criticized the Ethereum network’s supposed centralization, leading Shatner to quote ERC standards in response. The 87-year-old Shatner then received kudos from other crypto Twitter participants for his seemingly in-depth knowledge of the network.

Apple Apparently Briefly Removes Crypto Podcast Reportedly Ranked #4 in Investing

The podcast “Off the Chain,” hosted by Morgan Creek Digital partner and crypto analyst Anthony “Pomp” Pompliano has apparently been removed from the U.S. iTunes store this week. According to a tweet from Pompliano, the podcast was ranked 4th in the “investing” category before it was “mysteriously” taken down. The episode, which contained an interview with “Bitcoin Maximalist” Murad Mahmudov about the current worldwide monetary system, is available by press time.

Joseph Lubin Thinks Blockchain Will Take “A Little Longer” to Develop Than the Internet

In an interview this week, Ethereum co-founder Joseph Lubin said that blockchain will “probably take a little longer” to develop than the Internet, because it is “much more complicated. Lubin, who is also the creator of ConsenSys, noted that blockchain is developing similar to the web, due to its exponential growth and the “hundred of projects” to date. Lubin also said that DLT will be able to “permeate society more than the Internet” and make way for Web3.0.

Most Memorable Quotations

“His viewpoints don’t take into account the fact that the code has to be audited by an auditing firm and approved by consortium or it doesn’t get accepted. He thinks it exists in a bubble.

That’s why we have ERC-20, ERC-721… ERC-1701”— William Shatner (Captain Kirk), defending the Ethereum network’s decentralization

“We are NOT tolerant. We will not capitulate. We will not surrender. We will not negotiate. We will not end,” — Craig Wright, speaking about his own Bitcoin Cash (BCH) faction before the upcoming hard fork

Laws and Taxes

Thai Revenue Department Plans to Use Blockchain to Track Tax Payments

Thailand’s Revenue Department is planning to track payments using blockchain and machine learning, utilizing the tech to verify the validity of taxes paid as well as increasing the speed of the tax refund process. The machine learning use will help to expose tax fraud and support more transparency, as a digital tax collection system based on modern technologies is a stated goal of Thailand’s government.

French Parliament Finance Committee Adopts Amendments to Crypto Tax Bill

The Finance Committee of the lower house of France’s parliament has adopted regulations this week that would ease taxes on cryptocurrency sales. The Finance Committee of the National Assembly has submitted a draft of the government finance bill for 2019, specifying that the tax on crypto sales will be equal to capital income tax. If the amendments to the budget are accepted in the hearings scheduled for next week, the rate will be reduced from 36.2 percent to 30 percent starting Jan. 1, 2019.

US Judge Ends Freeze on Charlie Shrem’s Assets Amidst Winklevoss Lawsuit

A U.S. judge has ruled this week to end the freeze on Charlie Shrem’s assets in a lawsuit brought against him by the Winklevoss twins. The twins alleged in their lawsuit that Shrem took part of their $250,000 investment in his now-defunct exchange BitInstant to buy 5,000 Bitcoins (BTC). Shrem’s lawyer has said that his client is innocent, and that the claims have “no basis in fact or law.” According to the Winklevoss’ lawyers, the freeze should continue as Shrem possess $12 million in crypto, real estate holdings, and other assets. However, at present time only $10 in assets have been identified.

Thailand’s Securities Regulator Promises to Certify One ICO Portal in November

The general secretary of the Thai Securities and Exchange Commission (SEC) said this week that “at least one” ICO “portal” will be able to operate legally in the country in November. Rapee Sucharitakul said that they “might” starting approving ICO offerings in December, noting that five such “operators” are currently under consideration by the Finance Ministry. Thailand’s legislation requires that the Thai SEC vet crypto entities like ICOs, exchanges, and “digital asset operators” who wish to operate in Thailand.

Adoption

Wallet Provider Blockchain.Com to Airdrop $125 Mln in XLM After Adding Stellar Support

Crypto wallet provider Blockchain.com will now support altcoin Stellar (XLM), accompanied by an airdrop of $125 in XLM to its user base. The provider noted that the large airdrop is a “great way to drive decentralization and adoption for new networks,” noting that crypto airdrops allow consumers to “test, trade, and transact” newer crypto assets without need to mine or invest in them first. The choice to add support for Stellar was driven by the scalability of the token’s network, as well as its ability to create custom tokens that represent “real-world or virtual goods and services.”

Decentralized Network Bancor Partners With EOS for Cross-Blockchain Trading With ETH

Decentralized liquidity network Bancor said this week that it had partnered with EOS in order to allow for cross-blockchain swaps between Ethereum and EOS-based tokens. Bancor has now expanded to the EOS blockchain, using its DApp BancorX for the conversation. Bancor noted that the cross-blockchain DApp was built in collaboration with LiquidEOS, Bancor’s EOS “Block Producer.” According to the press release, this conversion DApp paves the way for “vastly more blockchain” to be included in cross-blockchain trading.

Trading Platform eToro Releases Crypto Wallet Supporting Bitcoin, Three Altcoins

Global crypto and fiat trading platform eToro has released its own cryptocurrency wallet this week with support for Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. The platform noted that they plan to add a “whole host of additional functionality” including additional crypto and fiat tokens, crypto-to-crypto conversion, and fiat deposits. eToro currently supports 14 total cryptocurrencies on its platform and has more than 10 million registered users.

Major Crypto Wallet Coinbase Launches Support for Basic Attention Token

Crypto exchange and wallet Coinbase announced this week that it would add support for a rollout of full trading of the Basic Attention Token (BAT) for its Android and iOS apps. As per the announcement, Coinbase customers can now buy, sell, send, receive, and store BAT on the platform, except for initially those residents of New York. Last week, Coinbase had noted the addition of inbound transfers of BAT to Coinbase Pro, specifying that the token would undergo four listing stages until it reached full access.

Mergers, Acquisitions, and Partnerships

Port of Valencia Integrates Maersk and IBM’s Blockchain Shipping Platform

The Port Authority of Valencia, Spain, has joined IBM and Maersk’s blockchain ecosystem, the TradeLens platform, which aims to apply blockchain tech to global supply chains. According to the announcement, the port has integrated into the platform as “Early Adopters,” meaning that the port will be a part of the platform’s early development. There are currently more than 20 participants in the TradeLens ecosystem, which has already reportedly processed 154 million “data-sending events.”

Deloitte Partners With Identity Management Startup for Digital ID System

“Big Four” accounting firm Deloitte has partnered with identity management firm Attest Inc. in order to create a blockchain-based digital identity system. The Chicago-based Attest offers a shared identity platform that allows its clients to conduct transactions, including its governmental customers, which can provide identity services to citizens. The partnership plans to develop a digital identity offering for government-compliant identifiers to be used for existing products, including a cryptographically secured identity storage wallet.

South Korea’s Bithumb Partners With E-Commerce Giant Qoo10 for Crypto Payments

South Korea’s leading virtual currency exchange Bithumb announced a partnership this week with Asian e-commerce fim Qoo10 to create a cryptocurrency payment service. Qoo10, which covers Asian markets including Singapore, Hong Kong, China, and Indonesia, will work with the Bithumb Cache system to purchase products through Qoo10. The two companies will use both the Qoo10 settlement service and the cache system, which is a password settlement service that allows Bithumb customers to convert their funds for use in payments with their password.

Nine Major Shipper Operators Launch Blockchain-Based Global Business Network

Nine major terminal operators and shipping companies have signed a Memorandum of Understanding (MoU) to develop an open digital platform based on DLT. The MoU is aimed at forming a consortium of shipping operators to develop the Global Shipping Business Network (GSBN), noting that the software solution will be provided by Hong Kong-based shipping and logistics firm CargotSmart. The new alliance includes such shipping giants as PSA International, a Singapore-based company and one of the world’s largest port operators, and Shanghai International Port Group, leading operator of ports in China.

Funding Rounds

Major Mining Provider Bitfury Raises $80 Million in Closed Funding Round

Bitcoin mining infrastructure provider Bitfury raised $80 million this week in a closed funding round led by European venture capital fund Korelya Capital. Other participants in the funding round included South Korean Internet giant Naver Group, Asian institutions Macquarie Capital and Dentsu Japan, and Mike Novogratz’s Galaxy Digital. The funding round comes several weeks after rumors circled that Bitfury was considering an IPO.

Winners and Losers

The crypto markets are seeing mixed signals, with Bitcoin trading for around $6,404.13 and Ethereum at $211 by press time. Total market cap is around $212 billion.

The top three altcoin gainers of the week are Traco, Pedit, and the Internet of Things. The top three altcoin losers of the week are Simmitri, empowr coin, and OBXcoin.

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

FUD of the Week

Turkish Police Arrest 11 in Reported Hack of Crypto Wallet Accounts

The Cybercrime Department of the Turkish National Police arrested 11 suspects this week while investing the alleged hack of crypto accounts, with victims reporting more than $80,000 in losses. 14 individuals so far have reported crypto wallet hacks to local prosecution authorities, noting that their Bitcoin had been transferred to other wallets. Police have since seized two fake identity cards, as well as a number of devices allegedly used in the hacks such as 18 mobile phones and SIM cards, 22 memory sticks, from the hackers. The investigation notes that it found the suspects by tracking new SIM cards registered to exchanges by the hackers.

Texas Regulator Issues Emergency Cease and Desist to Australian Cloud Mining Company

The Texas State Securities Board has issued an emergency cease and desist order this week to Australian cloud mining firm AWS Mining PTY LTD for selling unregistered securities. AWS Mining, along with many of its employees, are charged with violating the Texas Securities Acts by convincing Texas residents to purchase AWS’ unregistered cloud mining power contracts promising a “200 percent passive return on every investment.” The cease and desist notes that AWS did not follow through on its promised profits to investors, as well as failed to register as a securities broker-dealer.

Swiss Financial Regulator Recommends Banks to Set Crypto Risk Coverage at 800%

The Swiss Financial Market Supervisory Authority (FINMA) said in a report this week that banks and other financial institutions could calculate risk coverage for cryptocurrencies at 800 percent of their current market value. The confidential letter, seen by a local Swiss news outlet, noted that the recommendation for a flat risk weight at 800 percent are to “to cover market and credit risks, regardless of whether the positions are held in the banking or trading book.” The news outlet reports that 800 percent is at the upper end of the range, meaning that FINMA sees crypto as a volatile asset.

US SEC Charges EtherDelta Founder With Operating Unregistered Securities Exchange

Zachary Coburn, the founder of crypto token trading platform EtherDelta, has been charged by the U.S. Securities and Exchange Commission (SEC) with operating an unregistered securities exchange. EtherDelta has operated as a secondary marketplace for trading ERC20 tokens, letting users buy and sell digital assets using an order book and smart contracts on the ETH blockchain and placing a total of more than 3.6 million orders (some involving those considered securities) over an 18-month operating period. Coburn neither denied nor admitted the findings, but agreed to pay $300,00 in unlawful profits, as well as $13,000 in prejudgement interest and a $75,000 penalty.

Chinese Mining Giant Bitmain Sues Unknown Hacker for $5.5 Million Crypto Theft

China-based BTC mining firm Bitmain has sued an anonymous hacker for the reported theft of crypto work about $5.5 million from Bitmain’s account on Binance this April. As stated in the U.S. court documents, the “John Doe” hacker used stored Bitcoin after taking over Bitmain’s Binance account to manipulate the price of altcoin Decentraland (MANA) and then abscond with the profits. Bitmain notes that the hacker was able to steal $5.5 million in digital assets, including about 617 BTC. The documents also note that the hacker carried out transactions between BTC and MANA from Bitmain’s wallet and their own, completing the theft by transferring BTC from their Bitmain account into a digital wallet on Bittrex.

Prediction of the Week

Tim Draper Maintains Bitcoin Prediction of $250,000 by 2020

Venture capital investor Tim Draper said this week that he still believes that Bitcoin will experience 40 times returns and reach $250,000 by 2022. Although his initial prediction was for the coin to hit this price point in April of this year, Draper said that the industry merely needs to make it so that “Bitcoin could be used to buy Starbucks coffee” and the world will “open up.” Draper also added that he didn’t trust “political currencies” that are “determined by some weird political party,” adding that he sees a future with blockchain and smart contracts taking on a more prevalent role in states.

Best Cointelegraph Features

Morgan Stanley Report Shows Strong Institutional Investment for Bitcoin

At the end of October, multinational investment bank and financial services firm Morgan Stanley released a report on how Bitcoin has been a new “institutional investment class” since 2018. The report, which shows a relatively bullish outlook for 2018, brings attention to the stablecoin phenomenon, noting that not all stablecoins active currently will survive.

The SEC Stops Accepting Public Comments on Bitcoin ETFs, Takes Time to Make Decision

Last week, the cryptoverse buzzed with misinformation that the U.S. SEC was finally going to make a decision about Bitcoin ETFs. However, last week’s deadline concerned a close to the acceptance of public comments, leaving the SEC to now make their decision on the nine BTC ETFs on their own. Cointelegraph delves into the possibilities for the SEC’s decision, as well as looks into the root of where this deadline confusion came from.

Blockchain Advocates Storm Governors’ Mansions and Retain House Seats in US Midterm Elections

The U.S. saw midterm elections that week that led to the Democratic Party taking back the House, leaving the Republicans still in control of the Senate. Amidst the party lines, the governorships in both California and Colorado were won by crypto- and blockchain-friendly candidates Gavin Newsom and Jared Polis respectively. Beyond his strong blockchain policy push in his state, Polis (also the first openly gay elected governor), co-founded and co-chaired the Congressional Blockchain Caucus, a bipartisan group of Members of Congress. Electorally, the Caucus has done exceptionally well in the midterms: both of the co-chairs and 10 out of 12 regular members who stood for reelection retained their seats.

Article First Published here

FATF Guidelines Updated to Combat Money-Laundering and Terrorism Financing in Europe

Regulation has been a major talking point in the cryptocurrency sphere in 2018 – mainly due to the monumental crypto-craze in 2017.

This has come to the fore in Europe, after the Financial Action Task Force (FATF) updated its policy on cryptocurrencies in October, which were initially established back in 2015.

To understand the implications of these refurbished guidelines, one needs to understand the role of the FATF and its involvement in the regulation of cryptocurrencies.

FATF and crypto

Established in 1989, by the G7, the FATF is responsible for creating legal, regulatory, and operational measures to prevent money laundering in Europe and around the world. Since its inception, the FATF has created a number of recommendations that are regarded as the international standard for fighting money laundering and the financing of criminal activities.

A massive surge of investors looking to gain exposure by trading cryptocurrencies on exchanges across the world, has led to governments and financial regulatory bodies having to provide clear legal frameworks and guidelines for those operating in the space.

Naturally, this has taken on different shapes and forms in different regions of the globe. We’ve seen hardline, no-to-crypto stances from countries like China, while a nation like Malta has adopted a pro-crypto attitude that could well make it a leading destination for crypto and blockchain-related businesses to thrive.

Within that vein, the FATF organisation released a “risk-based-approach” guideline for cryptocurrencies in 2015, which aimed to help countries develop regulatory processes to manage the potential risk of cryptocurrencies being used for money-laundering and terror-financing.

As it stands, 35 countries are members of the FATF, many of which are situated as financial centers across the globe.

European countries make up a large percentage of the member states, including UK, Turkey, Switzerland, Sweden, Spain, Norway, Netherlands, Luxenbourg, Italy, Ireland, Iceland, Greece, Germany, France, Finland, Denmark, Belgium and Austria.

With this in mind, the FATF’s recommendations on the regulation of cryptocurrencies to address AML concerns are specifically important for the continent.

Calls for clarity in Europe

As of October 2018, FATF has implemented some changes to its original recommendations three years ago that apply to financial activities relating to cryptocurrencies. This has largely been in response to calls for clarity on which activities the FATF guidelines apply to.

In relation to cryptocurrencies, the FATF rules regarding a risk-based response to Anti-Money Laundering (AML) and Countering Financing of Terrorism (CFT) have been amended to address concerns around the use of cryptocurrency financial activities.

Exchanges, wallet providers, and providers of financial services for ICOs, are expected to be subject to AML/CFT regulations. This should be done by licensing, registering, or monitoring these entities to ensure their compliance with existing regulations.

This follows similar guidelines that have been implemented in South Korea, where anonymous trading has been banned and stricter guidelines for exchanges are being implemented, including the use of AML/CFT, as well as Know-Your-Customer (KYC) requirements.

At the end of October, the Federal Financial Monitoring Service of the Russian Federation urged members of the FATF to implement these changes. The Russian service wants to put rules in place to control crypto transactions of 600,000 rubles or more (about $9,120).

In a Russian context, there are no official regulations governing the use and trade of cryptocurrencies, although a draft bill is still in preparation.

This seemingly puts the FATF recommendations in perspective, as they seem to be the only real standard that different countries can fall back on to deal with cryptocurrencies in a broad perspective.

Just a day before the FATF released its newest recommendations, Switzerland-based Capital Markets and Technology Association (CMTA) published its own updated AML standards for digital assets and distributed ledger technologies (DLT).

The document outlines compliance standards for virtual asset issuers, guidelines for classifications of initial coin offerings (ICOs) as well as directions for banks, securities dealers and other financial institutions looking to get involved with cryptocurrencies or blockchain-based projects.

In September, a Belgian report was issued that called for the regulation of cryptocurrencies and ICOs at a European level. These were led in order to manage potential risks as well as developing the use of blockchain technology.

The European Union has already made it clear that it will work on cryptocurrency classification and management over the next 12 months, according to European Commission Vice President, Valdis Dombrovskis. A pressing concern once again is the threat of money-laundering and fraud.

There are risks – U.K. Cryptoasset Taskforce

While the FATF has provided general guidelines for the international community to follow, the U.K. has done its own homework on the sector – in addition to being a member of the FATF.

In March 2018, a Cryptoasset Taskforce was established by the HM Treasury, the Financial Conduct Authority and the Bank of England. This has culminated in a final report, which was published at the end of October.

The report maintains that there are multiple benefits to be gained from blockchain technology, described as distributed ledger technology in the report. However, it maintains an air of negativity and skepticism towards cryptocurrencies:

“There is limited evidence of the current generation of cryptoassets delivering benefits, but this is a rapidly developing market and benefits may arise in the future. There are substantial potential risks associated with cryptoassets, and the most immediate priorities for the authorities are to mitigate the risks to consumers and market integrity, and prevent the use of cryptoassets for illicit activity.”

The report recommends that cryptocurrencies that meet the standards of existing regulations must be treated as such.

Meanwhile, newer cryptocurrencies that pose challenges to older financial regulations will require international coordination to ensure they are treated accordingly.

These recommendations have been met with some skepticism as well, with a report labelling proposed regulations as a “blunt instrument approach.” The companies involved in compiling the report suggested that a heavy-handed approach could actually stifle the development of cryptocurrencies and various fintech companies.

A waiting game

As it stands, the current guidelines from the FATF are non-binding, they mainly serve as advisory parameters for regulators and governments to follow and apply to cryptocurrency operations in their respective locations.

In conjunction with the October update to its recommendations, FATF president, Marshall Billingslea, announced the plans to release governing rules for the crypto industry by June 2019, according to Reuters.

A number of European countries have enforced their own rules and regulations for cryptocurrencies, wallet providers, and other associated businesses.

Nevertheless, those member states that haven’t enforced any regulation of cryptocurrency trade can expect to be given a directive from the FATF next year.

Cointelegraph has reached out to the FATF for comment – and has not received a formal reply at the time of publication.

Article First Published here

Crypto Markets See Ongoing Mild Losses, Bitcoin Trades Below $6,400

 

Friday, Nov. 9: crypto markets are continuing to see downward momentum, with virtually all of the major cryptocurrencies at least mildly in the red, as data from Coin360 shows.

Market visualization by Coin360

Bitcoin (BTC) is down just over 1 percent, trading around $6,340 at press time. After a period of protracted stability, the top coin has seen a short-lived burst of price action of late, growing Nov.7 to break above the $6,500 mark.

Bitcoin has since corrected downard to trade close to the start of its weekly chart, where it is seeing virtually no price percentage change to press time. On the month, Bitcoin is down a mild 3.6 percent.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: Cointelegraph Bitcoin Price Index

Bitcoin pioneer Jeff Garzik – reportedly the “third-biggest contributor” to Bitcoin’s code and one of Bitcoin creator Satoshi Nakamoto’s key collaborators – gave an interview today in which he reflected that:

“[Bitcoin] hasn’t evolved in the direction of high-volume payments, which is something we thought about in the very early days: getting merchants to accept Bitcoins. But on the store-of-value side it’s unquestionably a success.”  

The market’s largest altcoin Ethereum (ETH) has also sustained a fractional loss, down just over percent to trade at $211. Correlating with Bitcoin, the altcoin saw an intra-week spike at around $220 Nov. 7, and has since jaggedly shed value down to its current price point.

Nonetheless, on the week, the asset remains a strong 6 percent in the green, with monthly losses at around 7.2 percent.

Ethereum 7-day price chart

Ethereum 7-day price chart. Source: Cointelegraph Ethereum Price Index

Most of the remaining top ten coins on CoinMarketCap are in the red, although remaining within a 1-4 percent range.

Bitcoin Cash (BCH) has taken the heftiest hit among the top ten, down just under 4 percent to trade around $567, as controversies ahead of its forthcoming hard fork – scheduled for Nov. 15 – continue to divide the community.

Another top ten alt shaken by larger-than-average losses is Cardano (ADA), down 3.19 percent at $0.074.

Altcoins Ripple (XRP) and Stellar (XLM) are the only top ten coins in the green by press time, both up under 1 percent over the past 24 hours.

The top twenty coins by market cap are likewise almost unanimously red, with the exception of the 19th largest crypto, privacy-focused alt Zcash (ZEC), which is pushing 3.5 percent growth to trade at around $133.

For the remaining coins, losses are capped below 4 percent, with Vechain (VEC) and DASH (DASH) each on the higher end, down 3.9 and 3.47 percent respectively.

Total market capitalization of all cryptocurrencies is around $212.5 billion as of press time, down from an intra-week high of around $220.7 billion Nov. 7, but above the $207-210 billion levels it held throughout much of the past month.  

7-day chart of the total market capitalization of all cryptocurrencies

7-day chart of the total market capitalization of all cryptocurrencies from CoinMarketCap

In other major crypto news of the day, ConsenSys-backed blockchain startup Kaleido and Amazon Web Services (AWS) have launched a full-stack platform that helps enterprises implement blockchain solutions without starting from scratch. The platform, dubbed Kaleido Marketplace, reportedly “eliminates 80 percent of the custom code” needed to build a given blockchain project.

In Asia, Thailand’s securities regulator is set to clear “at least one” Initial Coin Offering (ICO) “portal” to operate legally this month, with officials saying that ICOs themselves “might” start being approved as soon as December.

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Crypto Markets See Visible Drop Off as Major Coins Are in The Red

Wednesday, Nov. 8: most cryptocurrencies have seen a drop-off today, with the most visible losses seen by Bitcoin Cash (BCH) and Ripple (XRP), as data from Coin360 shows. As of press time, the markers are seeing mixed signals, mostly staying in the red.

Market visualization from Coin360

While in the beginning of the week Bitcoin (BTC) was mostly in the green, up almost to 2 percent on the day Monday, Nov. 5, today the major coin is hovering around zero, mostly staying in the red and trading around $6,450 as of press time.

Bitcoin 7-day price chart. Source: CoinMarketCap Bitcoin Price Index

Ethereum (ETH) is also about 2 percent down on the day, being traded slightly over $213 as of press time. The coin is seeing some stability after it has regained its second spot, bypassing Ripple (XRP) by market capitalization.

Ethereum 7-day price chart. Source: CoinMarketCap Ethereum Price Index

Ripple (XRP), in its turn, is currently trading at $0.50, dropping as much as 5.6 percent over the day as of press time. As per its weekly charts, the currency has seen its peak on Tuesday, Nov. 6, when the coin temporarily overtook Ethereum as the second largest altcoin.

Ripple 7-day price chart. Source: CoinMarketCap Ripple Price Index

Total market capitalization of all cryptocurrencies is around $215 billion at the press-time, falling from $219 billion over the last 24 hours. According to daily trading volume, it has also dropped in comparison to yesterday, Nov. 7, hovering around $13.5 billion as of press time.

Weekly total market capitalization chart. Source: CoinMarketCap

18 of the 20 major cryptocurrencies are in the red, with Bitcoin Cash (BCH), Ripple (XRP) and NEM (XEM) seeing the biggest drops in last 24 hours according to CoinMarketCap. BCH has lost a distinctive 4.8 percent after almost a week-long growth following its upcoming hard fork, which is backed by major crypto exchange Binance. As of press time, the coin was traded at around $589.

Dash (DASH) is the only crypto to see a slight growth among top 20 coins, up to 1 percent on the day and trading at around $167 as of press time.

Meanwhile, today, Nov. 8, two countries in Asia have called for clearer crypto regulation. The Deputy Prime Minister of Thailand, Wissanu Krea-ngam, urged to lawmakers to amend the existing legal framework for crypto — set in May 2018 — to meet the development of the technology, warning about possible dangers for consumers. In the meantime, South Korea’s lawyers have lobbied the local government to speed up its work and expedite a legal framework for cryptocurrencies as well.

Yesterday, Nov. 7, crypto Twitter saw an extensive discussion in response to William Shatner’s positive tweet about Ethereum (ETH) co-founder Vitalik Buterin.

The Canadian actor, most known for his role of captain James T. Kirk in Star Trek, posted a thumbs-up emoji tagging Buterin for his 2.5 million followers. Shatner was then drawn into a debate over the ETH network’s decentralization, showing familiarity with ERC standards in his rebuttal to “crypto troll[s].”

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Crypto Exchange Gate.io Removes StatCounter Service Following Report of Security Breach

Crypto exchange Gate.io has removed web analytics tool StatCounter from their website following a breach report by cybersecurity firm ESET, according to an official blog post published today, Nov. 7.

The company has reported that they immediately removed StatCounter’s traffic stats service after receiving a security notice by ESET about suspicious behavior. Gate.io claimed they subsequently scanned the website with 56 antivirus products, and “no one reported any suspicious behavior at that time.” However, the firm still changed its traffic tracker, also reporting that “users’ funds are safe.”

On Nov. 6, Slovakia-based cybersecurity firm ESET published a security report claiming that hackers had successfully breached major web analytics tool StatCounter, targeting Bitcoin (BTC) exchanges that use the traffic analytic service. According to ESET researcher Matthieu Faou, the attackers compromised the StatCounter platform — which is reportedly used by more than two million other websites — by modifying the JavaScript (JS) code on each page of the website.

The hackers managed to add a piece of malicious code containing “myaccount/withdraw/BTC,” which intends to replace the destination address of a Bitcoin transfers by crypto exchange users with an address belonging to the attackers.

Modified script at www.statcounter[.]com/counter/counter.js. Source: WeLiveSecurity

According to Faou, who is reportedly the first to detect the “supply-chain attack,” this Uniform Resource Identifier (URI) “myaccount/withdraw/BTC” has been solely valid on crypto exchange Gate.io, allegedly “the main target of this attack.”

Now-ranked the 38th top crypto trading platform by daily trade volume as of press time, the exchange is quite popular in China with a rank of 9,382 in terms of in-country traffic, while its global rank amounts to 33,365, according to SimilarWeb traffic data and analytics tool.

In the conclusion to his report, the ESET researcher stated that the recent security breach again demonstrates the fact that external “JavaScript code is under the control of a third party and can be modified at any time without notice.”

As reported by Cointelegraph earlier this year, JS has been one of the major tools of hackers implemented in cryptojacking. According to the analysis, JS-based browser add-ons and extensions are “extremely vulnerable to hacking attacks” and often used for hidden mining by deploying users computing resources. For example, in mid-October, researchers found a crypto-mining malware that hides itself behind a fake Adobe Flash update.

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Blockchain.com Wallet Adds Stellar, Announces $125 Mln XLM Airdrop to ‘Drive Adoption’

Cryptocurrency wallet provider Blockchain.com has launched full support for altcoin Stellar (XLM), accompanied by a hefty airdrop of $125 million worth of XLM to its user base. The news was announced in an official blog post today, Nov. 6.

Blockchain.com pitched the mammoth offering as “the largest airdrop in the history of crypto and likely the largest consumer giveaway ever,” suggesting that airdrops are “a great way to drive decentralization and adoption for new networks.”

The firm underscores that the benefit of crypto airdrops for consumers are that they are able to “test, trade, and transact” unfamiliar crypto assets without having to mine or invest first.

Blockchain.com gives the rationale for its choice to launch support for Stellar as being due to the token’s network being “built for scalability,” as well as for its provision of the ability to create custom tokens that represent “real-world or virtual goods and services.”

Prior to adding Stellar support, the Blockchain.com wallet already supported three other cryptocurrencies, Bitcoin (BTC),  Bitcoin Cash (BCH), and Ethereum (ETH).

As of press time, Stellar (XLM) is ranked sixth largest cryptocurrency by market cap on CoinMarketCap’s listings, seeing a strong 5.35 percent growth on the day, trading at $0.258.

In late September, Cointelegraph reported that Blockchain.com had been ranked within the top ten most “sought-after” U.K. startup employers in new listings on LinkedIn. Among its attributes, LinkedIn noted Blockchain.com’s “benefits such as free food and flexible working,” unlimited holiday policy and a bonus scheme for employees paid in Bitcoin.

Airdrops have recently made headlines in less auspicious terms, with China’s stringently anti-crypto central bank, the People’s Bank of China (PBoC), announcing it would be widening its regulatory scrutiny to include token airdrops, which it characterized as “disguised” Initial Coin Offerings (ICOs) in its 2018 financial stability report.

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‘Creating DApps Can Be Simple’: Platform to Bring Decentralized Economy to Mass Adoption

A new project from Dubai, HetaChain, is developing a universal blockchain platform with “industrial scale computational capabilities.” The project is intended to make blockchain more easy-to-use and flexible for regular users and developers. HetaChain aims to help governmental services, businesses, and organizations create decentralized applications (DApps) and integrate them into different industries, such as banking, e-commerce, robotics, and healthcare.

Solving blockchain issues

The new Heta Blockchain 3.0 Platform, launched in 2018 by Relam Investment and its founder, Sultan Ali Rashed Lootah, runs a hybrid of the Delegated Proof-of-Stake (DPoS) and a Byzantine fault tolerance (BFT) consensus mechanisms which are designed to bring security to fight against cyberattacks.

According to the company, the hybrid consensus algorithm will be able to handle most of the challenges that many blockchain platforms are currently facing. These limitations include issues with security, difficulty in developing DApps, and the speed of the network. For example, Bitcoin can process only seven transactions per second (TPS), compared to Visa which can process 24 TPS. HetaChain says its technology allows for fast TPS “without the risk of downtime.”

Mainchain

The core element of HetaChain is Mainchain, the place for storing all of the public tokens. The tokens will be validated by master nodes and Mainchain will also generate multiple private chains that can be private channels for different users like a person, a company or an organization. They will have control over their own chain and will connect to the public MainChain via a special communication protocol.

The Heta Blockchain is powered by an internal cryptocurrency, HETA, which can be used to pay usage fees. There are two types of payments: the first one is the transaction fee that is paid once the user exchanges coins or tokens made by Heta. The second fee is an endorsing reward, which is paid when the user is involved in consensus or the validation process of a private chain or MainChain.

“Drag, drop, adjust”

For users without the knowledge of developing DApps, the platform offers ready solutions in the DApp Store. There will be plug-and-play DApps, software, and smart contracts, pre-built by the community or third parties for the HetaChain ecosystem. Those who want to try to create a simple smart contract can use an auto generation DApp. The company says that anyone with even basic programming skills will be able to handle it by dragging, dropping, and adjusting elements. An off-chain Database will also be available. The project’s development is planned to also be supported by a big data analysis which will be provided by third-party data centers connected to the MainChain.

There will be one more Relam Investments’ project powered by HetaChain technology and based on the smart contracts. T-Hub system is the place for integration of stakeholders in business and logistics operations like ports, customs, government agencies. Relam Investments will offer logistics services which are “fast and easy to use.”

Hetachain team

The founder, chairman and CEO of HetaChain is Sultan Ali Rashed Lootah, who has been a vice chairman of Mashreqbank PSC since March 18, 2015 and its director since 1996. The co-founders of the project are Mr. Ali Juma AlAjme – director of the United Arab Emirate’s Ministry of Health and Prevention’s IT Department, and Duy Phuong Nguyen, the vice chairman of Relam Investment. Nguyen has experience in leading finance and banking projects in VieVietnam Industrial Securities and Vietnam Commodities Exchange.

Recently, Relam Investments announced their plan of expansion to India. The company said it will start with initial investment of around $250 million in technology startups and real estate projects.

 

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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Hodler’s Digest, Oct. 29 – Nov. 4: Rapper T.I., Charlie Shrem Sued Over Alleged Pump-and-Dump, BTC Theft Respectively

 

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

US Rapper T.I. Sued for $5 Million After Alleged Failure of FLik Token

U.S. rapper T.I. is being sued for $5 million by a group of 25 persons who have alleged that the rapper’s promotion of FLiK tokens led to a loss of around a $1.3 million investment. The plaintiffs allege that T.I. and his business partner Ryan Felton promoted the “now worthless securities” on social media, creating a false impression of a “valuable liquid investment.” The lawsuit writes that T.I. and Felton defrauded them by driving the token’s price up with money from the investment, and then dumping the token when the price dropped.

The Winklevii Sue Charlie Shrem for Alleged Theft of 5,000 BTC in 2012

Tyler and Cameron Winklevoss have claimed in a new lawsuit that Bitcoin Foundation founder Charlie Shrem has “stolen” 5,000 Bitcoin (now $31.7 million) from them in 2012. According to a recently unsealed lawsuit, the Winklevii allege that Shrem failed to repay the twins as part of their investment in his extant project BitInstant. Shrem’s lawyer has called the claims “erroneous,” noting that his client will “quickly clear his name.” The judge overseeing the case has “agreed to freeze” some of Shrem’s assets in response to the case.

BTC Wallet Xapo Founder Says Bitcoin’s Current Stage Compares to 1992 Internet

Bitcoin “Patient Zero” Wences Casares, the founder of BTC wallet startup Xapo, said that Bitcoin may take years to become successful. In an interview this week with Bloomberg, Casares said that Bitcoin “may work, it might not work,” noting that the currency is in the early stages of its development, similar to that of the Internet in 1992. Casares gave a rough seven-year timeline for determining whether Bitcoin is successful, noting that if it is, it will become a non-political global standard of value and settlement.

Crypto Exchange and Wallet Coinbase Raises $300 Million in New Funding Round

Major U.S. crypto exchange and wallet Coinbase has raised $3 million in its latest funding round, bringing its post-money valuation to about $8 billion. Tiger Global Management reportedly led this recent Series E equity financing round, with participation from Y Combinator Continuity, Wellington Management, Andreessen Horowitz, and Polychain, among others. Coinbase noted that the funds will be used for the purpose of “accelerating” crypto adoption, noting plans to support regulated fiat-crypto trading worldwide, and laying the foundation for supporting “thousands” of cryptos in the future.

Climate Change Report Finds Bitcoin Usage Could Raise Global Temperature by 2 C

A new reported published by climate change scientists has raised warnings about the effects of Bitcoin’s carbon footprint on global environment. According to their research, which is based on the existing data for BTC’s electricity consumption in conjunction with different projections for the crypto’s future adoption, the cumulative emissions of BTC usages would “cross the 2 C threshold within 22 years.” Even if Bitcoin follows a faster adoption path, it could cross that threshold in just ”11 years.” The report notes that while more efficient hardware could reduce BTC’s carbon footprint, one can’t relay on “yet-to-be-developed hardware.”

Most Memorable Quotations

Most Memorable Quotations

Ella Pamfilova

“The word ‘block’ is immediately associated with something closed. In Russia, where a third of the population was held behind bars… Next you have ‘chain’. ‘Block’ and ‘chain’ — it works on a subconscious level,”  — Ella Pamfilova, the head of the Russian Election Commission

Jamie Dimon

“I never changed what I said, I just regret having said it. I didn’t want to be the spokesman against Bitcoin. I don’t really give a sh*t, that’s the point. Blockchain is real, it’s technology, but Bitcoin is not the same as a fiat currency,” — Jamie Dimon, JPMorgan CEO

John McAfee

“[Crypto is] all I’m going to talk about. See, I don’t want to be president. I couldn’t be… no one’s going to elect me president, please God. However, I’ve got the right to run,” — John McAfee, crypto enthusiast

Laws and Taxes

Laws and Taxes

Ukraine Development, Trade Ministry Creates State Policy for Legalizing Crypto

Ukraine’s Economic Development and Trade Ministry announced this week that it has initiated a “state policy” for the classification and legalization of crypto-related activities. According to the ministry’s press release, the purpose of the policy is to “create understandable conditions for conducting activities in the field of virtual assets and virtual currencies,” and to usher in “adoption of the concept of a state policy” for crypto. The policy specifically suggests creating legal definitions for key terms like “virtual currency” (“cryptocurrency”), “virtual assets,” Initial Coin (or Token) Offerings (ICOs or ITOs), cryptocurrency mining, “smart contracts,” and “tokens.”

Brazil’s Tax Regulatory Creates Draft Regulation for Crypto Taxes

The Department of Federal Revenue of Brazil (RFB) wants to receive monthly reports on crypto assets operations, according to recently released draft legislation. In the draft bill, the RFB would require Brazil-based crypto exchanges to send them detailed reports on all crypto-related operations on a monthly basis. The bill also notes that legal entities and individuals living in Brazil would be required to report all transactions with foreign crypto exchanges if they are over than R$10,000 (about $2,700) per month.

Adoption

Adoption

Crypto Investment Firm Greyscale Reaches $330 Million in Revenue

Crypto asset management firm Grayscale Investments Inc. has reported around $330 million in revenue in 2018, according to its third quarter investment report, despite the currently prevailing bear market. In the recently released report, Grayscale notes that they have raised $81.1 million over the last three months, representing an increase of almost 1,200 percent from the same period in 2017. Grayscale writes that this is the strongest calendar year the firm has experienced since the beginning of its activity.

New York Regulator Grants BitLicense to Bitcoin ATM Operator Coinsource

The New York State Department of Financial Services (NYDFS) has granted a virtual currency license, the BitLicense, to Bitcoin ATM operator Coinsource. The regulatory approval means that New Yorkers can use cash to buy or sell Bitcoin using Coinsource’s “Bitcoin Teller Machines (BTMs),” of which there are 40 machines currently deployed across the state in three counties. This is the first BTM operator to receive the BitLicense, and the regulator notes that its decision came following a comprehensive review of Coinsource’s application and requirements for AML and CFT measures.

Morgan Stanley Report Classifies Cryptocurrency as New Institutional Investment Class

A new report from investment bank and financial services firm Morgan Stanley notes that Bitcoin and altcoin have been a “new institutional investment class” since 2017. According to the document, the “surprises” to be seen in crypto in 2018 are a “strong” formation of new funds targeting the nascent sectors, as well as the “growth” of crypto-tied futures. The report also touches on decentralized technology, noting that it makes the world “better.”

Crypto Exchange and Wallet Coinbase Executive Reveals Plans to Add up to 300 Coins

Major U.S. crypto exchange and wallet Coinbase may offer as many as 300 more coins in the future, according to an interview with the company’s president and COO. Speaking to Bloomberg, Asiff Hirji said that Coinbase planned on avoiding complex U.S. regulations on crypto tokens by offering more assets to non-residents, noting that the number could jump from its current seven to “200-300” over the next year. Moreover, Hirji noted that the company will not perform an IPO “any time soon.”

Mergers, Acquisitions, and Partnerships

Mergers, Acquisitions, and Partnerships

Chinese Retail Giant JD.Com Partners With Tech Institutes for Blockchain Research Lab

Chinese e-commerce firm JD.com will launch a research lab for blockchain in partnership with two technology institutes: the Ying Wu College of Computing at the New Jersey Institute of Technology and the Institute of Software at the Chinese Academy of Sciences (ISCAS). According to the release, the lab aims to develop solutions for efficiency problems and examine new applications and uses cases of blockchain tech, as well as specifically researching consensus protocols, privacy protection, and security in DApps.

Nasdaq to Integrate Microsoft’s Azure Blockchain Tech Following Partnership

American software firm Microsoft will integrate its Azure blockchain technology into stock exchange Nasdaq Inc.’s Financial Framework (NFF). According to this week’s announcement, Microsoft will collaborate with Nasdaq to develop a “ledger agnostic blockchain capability” that will allow for operability across multiple ledgers. The release also notes that the new product can facilitate easier buyer and seller matching, management of delivery, and payment and settlement of transactions, as well as allow NFF customers to deploy various blockchain through one common interface.

Belgian-Based Investment Firm Acquires Crypto Exchange Bitstamp

Crypto exchange Bitstamp has been acquired by Belgian-based investment firm NXMH in an “all cash deal” this week. The CEO of Bitstamp told Reuters that the exchange was valued at $60 million in 2016, up from $39 million in 2014. NXMH is a subsidiary of South Korean-based media giant NXC Corp., which bought a 65.19 percent stake in South Korean exchange Korbit last year. NXMH now has an 80 percent stake in Bitstamp, with the CEO retaining his 10 percent ownership interest and staying on as CEO. The exchange noted that it is looking towards “global expansion” with the new deal.

Report: Bithumb Signs Deal With US Fintech Firm to Launch Securities Token Exchange

South Korean crypto exchange Bithumb has reportedly signed a deal with American crowdfunding platform SeriesOne in order to open a securities token exchange. A South Korean news outlet was told by its sources about the partnership, with at Bithumb official reportedly adding that the exchange plans to increase its efforts to develop into a worldwide financial firm. The sources also told the news agency that the exchange will be established by SeriesOne in the U.S. during the first half of 2019, with Bithumb to provide investment and the technical support for the exchange’s operations.

Controversial Stablecoin Tether Releases Letter Confirming New Banking Partner

The issuer of cryptographic stablecoin Tether has released a statement this week, confirming that it will now be banking with Bahamas-based Deltec Bank & Trust. Tether had previously been the subject of rumors about its ability to back up its tokens 1:1 with fiat after it parted ways with previous financial institution Noble Bank. This week’s statement, purportedly from Deltec Bank, reads that the USDT in the market are “fully backed by US dollars that are safely deposited in our bank accounts.”

Funding Rounds

Funding Rounds

Berkshire Hathaway Invests $600 Million in Two Fintech Payment Firms

Multinational holding conglomerate Berkshire Hathaway, whose CEO and chairman is crypto critic Warren Buffett, has invested about $600 million in two fintech payment firms that focus on emerging markets. The investments are reportedly headed by Todd Combs, one of Berkshire’s two portfolio managers, and go outside the purview of investments normally made by the company. The first is a roughly $300 million stake in the parent company of India’s largest mobile-payments service Paytm, and the second is a purchase of shares in an IPO for Brazilian payments processor StoneCo.

Sequoia USA Participates in $30 Million Funding Round for Israeli Blockchain Startup

Israeli blockchain startup StarkWare Industries has ended a $30 million funding round with participation from Intel Capital and Sequoia USA. The funding round, which was led by crypto hedge fund Paradigm — founded by Coinbase co-founder Fred Ehrsam — also included Atomico, DCVC, Wing, Consensys, Coinbase Ventures, Multicoin Capital, Collaborative Fund, Scalar Capital and Semantic Ventures. StarkWare Industries develops software and hardware, with applications including transparent privacy in blockchain, increased transaction throughput, as well as off chain computation.

Winners and Losers

Winners and Losers

Winners and Losers

The week has seen continued relative market stability, with Bitcoin at around $6,371 and Ethereum at about $200. Total market cap is at around $208 billion.

The top three altcoin gainers of the week are Etheera, Mero, and Mindexcoin. The top three altcoin losers of the week are YENTEN, empowr coin, RusGas.

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

FUD of the Week

FUD of the Week

CryptoTrader Host Ran NeuNer Rescinds Claim That BTC Will Hit $50K in 2018

Ran NeuNer, the host of CNBC’s CryptoTrader, has retracted his earlier prediction that Bitcoin will reach $50,000 by the end of 2018. Speaking privately to Cointelegraph, NeuNer stated that he changed his prediction due to the recent state of the market, noting that the bear market status and the lack of “good news” moving the market made him lower his expectations. NeuNer had originally tweeted in February of this year that Bitcoin will finish 2018 at $50,000, and has updated it with a new pinned tweet that Bitcoin “will not” finish 2018 at $50,000.

Former US Federal Reserve Chair: Bitcoin Is “Anything But” a Useful Store of Value

Former U.S. Federal Reserve chair Janet Yellen said this week that Bitcoin is “anything but” a useful store of value. Speaking during an interview at the 2018 Canada FinTech Forum in Montreal, Yellen noted that Bitcoin’s failure to be a stable source of value means that it is not a useful currency, adding that it’s “very slow” at payments and has difficulty “because of its very decentralized nature.” Yellen is known in the Bitcoin community due to an incident when a Bitcoin fan held up a handwritten “Buy Bitcoin” during her televised speech on interest rates and reserve policies last July.

“Godfather of ETFs” Says Bitcoin Exchange-Traded Funds Will Not Be Approved Soon

Reggie Brown, the so-called “godfather of ETFs,” said this week that Bitcoin exchange-traded funds (ETFs) will be certified “no time soon.” Browne, who is a senior managing director and head of ETF trading at financial services firm Cantor Fitzgerald, noted during a speech that BTC ETFs will only be approved after the development of a robust regulatory framework in the industry. Browne noted that it is “very difficult” for the SEC to “wrap their heads around a positive approval” due to a lack of data.

Report Finds Lack of Diversity in Ethereum Smart Contracts Could Pose Risks

A report from a group of analysts at Northeastern University and the University of Maryland said this week that a lack of diversity in Ethereum (ETH) smart contracts poses a risk to the ETH blockchain ecosystem. According to the researchers, since they found that most Ethereum smart contracts are “direct- or near-copies of other contracts,” the risk arises if copied smart contract contains a vulnerable or buggy code. The study, which was partially supported by the U.S. National Science Foundation, analyzed Ethereum smart contracts’ bytecodes during its first 5 million blocks over an almost three-year timeframe from the cryptocurrency’s inception in 2015.

American Faces 5 Years in Prison for Operating Unlicensed Business via LocalBitcoins

A U.S. citizen has pled guilty this week in federal court for operating an “unlicensed money transmitting business” through LocalBitcoins.com. Jacob Burrell Campos allegedly admitted selling “hundreds of thousands of dollars” in BTC to more than 1,000 customers from January 2015 to April 2017, meaning that he operated an unregistered “Bitcoin exchange.” According to the court, it is illegal in that Burrell did not register his business operation with the U.S. Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury, and failed to apply AML regulations on the sources of his clients’ funds.

Prediction of the Week

Prediction of the Week

Crypto Winter Could Last 12 to 18 Months, Says CEO of Top Derivatives Platform BitMEX

Arthur Hayes, the CEO of major crypto derivatives platform BitMEX, said this week that “based on previous experience,” the low volatility and volume trading climate could continue for “another 12 to 18 months.” Hayes noted that he has been in the Bitcoin space since 2013, and based his current predictions on his experience in the 2013-2015 “nuclear bear market.”

Best Cointelegraph Features

Best Cointelegraph Features

Bitcoin White Paper — 10 Years Since Satoshi’s Vision Was Brought to Life

Cointelegraph celebrates the 10 year anniversary of Satoshi Nakamoto’s release of the Bitcoin white paper with an overview of the white paper’s influence, a brief history of the cryptocurrency, and an interactive quiz to find out how “expert” our readers’ knowledge of Bitcoin is.

Trend of Global Crypto Mining: Despite the US-China Trade War, Activity Surges as Samsung and GMO Enter

As the crypto markets see the fourth worst correction in their nine-year history, the hash power of the Bitcoin network continues to increase. Cointelegraph contributor Joseph Young delves into how crypto mining manufacturing giant Bitmain will compete with the emergence of products from Samsung and GMO into the market, as well as the effects on mining due to the ongoing U.S.-China trade war.

Skirting the Great Wall: The Chequered Saga of Crypto in China, 2018

Part two of Cointelegraph’s series on China and cryptocurrency gives an in-depth analysis of what exactly is going on in China in the aftermath of the country’s ICO ban, and why regulators continue to attempt to curb the rise of crypto trades.

Article First Published here

Taiwan’s Legislature Amends AML, CFT Laws to Place New Requirements on Crypto Exchanges

Taiwan’s legislature has passed amendments to existing anti-money laundering (AML) and counter terrorism financing (CFT) laws to place new requirements on crypto exchanges. The development was reported by FocusTaiwan, the English language news website of Taiwan’s national news agency, on Nov. 2.

Under the new changes to Taiwan’s Money Laundering Control Act and Terrorism Financing Prevention Act, the Legislative Yuan — the Taiwan-based unicameral legislature of the Republic of China — has given Taiwan’s Financial Supervisory Commission (FSC) the authority to bar anonymous crypto transactions.

The FSC can now demand that exchange operators require their customers to register using real-names: if they fail to do so, banks can block anonymous transactions and report them to the watchdog if they deem them to be suspicious.

Taiwan’s Ministry of Justice (MoJ) has said that the changes align the country more closely with international AML standards, and that the ensuring “good” AML and CFT practices will help to foster a “compliance culture and mindset” among local businesses and institutions.

The ministry further remarked that earlier amendments to the country’s Money Laundering Control Act had “not “fully prevented related financial crimes,” and that the latest action from the Legislative Yuan is expected to better Taiwan’s performance in its upcoming assessment by Asia/Pacific Group on Money Laundering (APG), due to take place Nov. 5-16.  

Last month, the Financial Action Task Force (FATF), an international organization that develops policies and AML standards, implemented changes to its AML and CFT standards for firms involved in crypto-related activities, such as exchanges and providers of financial services for Initial Coin Offerings (ICOs).

Taiwan has previously announced plans to release release draft Initial Coin Offering (ICO) regulation by June 2019, with the FSC chairman telling the Legislative Yuan on Oct. 22 that “the more we regulate, the more this new economic behavior wanes.”

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Trend of Global Crypto Mining: Despite the US-China Trade War, Activity Surges as Samsung and GMO Enter

Throughout 2018, the cryptocurrency market experienced the fourth worst correction in its nine-year history, as Bitcoin lost more than 69 percent of the value from its all-time high of $19,500.

Despite the substantial decline in the price of Bitcoin (BTC), which heavily affects the earnings of miners, the hash power of the Bitcoin network has continuously increased throughout the past 10 months, from 15 million TH/s to over 50 million TH/s from January to October.

As portrayed by the research of blockchain analyst Barclay James, the breakeven cost of mining Bitcoin at 35 million TH/s is around $6,900. The formula employed by James considers the hash power of the Bitcoin network, the hashing power of an ASIC Bitcoin miner, and the efficiency of each miner in producing BTC:

# units = global hashing power ÷ unit hashing power ÷ unit efficiency

Given the cost of Bitcoin mining, when its hash power is currently around 35 million TH/s and the value is $6,400, the breakeven cost of Bitcoin is in the $7,000 to $8,000 range. Which means, at $6,400, Bitcoin miners are losing money by generating BTC and are solely relying on their expectations of the price of BTC to eventually increase in the months to come.

For miners outside of China, specifically the mountainous region of Sichuan known to have the cheapest electricity in Asia and a cold climate that naturally cools down cryptocurrency mining equipment, it is even more expensive to mine BTC. The paper of Barclay James reads:

“China has some of the world’s cheapest electricity rates as well as average temperatures consistent with temperate regions. This is important as cooling is one of the largest overheads in mining. In addition, the country’s generally low operating costs also give it a competitive advantage. In fact, current estimates place 70 % of global hashing power in China, the majority of which is located in the Sichuan region.”

Since June, Bitcoin miners have been mining the dominant cryptocurrency at a significant loss. The fact that the hash power of BTC has continuously risen throughout the bear market of 2018 demonstrates large activity in the global cryptocurrency mining sector and the confidence of miners that the industry will recover as the year comes to an end.

Bitmain and its Antminer sold at a discount

BitMEX Research, a cryptocurrency firm that operates as a research subsidiary of major digital asset exchange BitMEX, disclosed in its paper in August that Bitmain, the dominant conglomerate in the cryptocurrency mining sector, has been deliberately selling its latest Bitcoin ASIC miner Antminer S9 at a lower price.

In 2017, Bitmain sold more than one million Antminer S9 miners and another 700,000 of them in the first quarter of 2018. According to the researchers, who calculated the disclosed gross profit margin of Bitmain in 2017 and the implied cost of each miner. Bitmain has set a negative profit margin of 11.6 percent for the Antminer S9, its main product.

The researchers stated that the distribution of Antminer S9 miners at such a low profit margin and the sudden increase in the sale of the miner in the first quarter of 2018 suggest the company employed a strategy to outsell its competition by underpricing its products.

“These low prices are likely to be a deliberate strategy by Bitmain, to squeeze out their competition by causing them to experience lower sales and therefore financial difficulties. In our view, herein lies the key to one of the main driving forces behind the decision to IPO. A successful IPO may increase the firepower available to continue this strategy and eliminate an advantage rivals could have by doing their IPOs first.”

The paper also proposed that the company may simply have too many Antminer S9 miners in its inventory.

In June 2018, Bitmain was criticized for shipping Antminer S9 miners caked with dust. Some miners alleged the firm of sending old or used ASIC miners. In response to this, Bitmain stated that all traders who received defective or affected Antminer S9 miners would be fully compensated.

“Any product can be imperfect, and there will be shortcomings in the process of enterprise development. We have also compensated the miners who have received mining equipment with inadequate computing power and the mining equipment are now being run properly.”

Whether the decision of the firm to sell its main ASIC miner with a low profit margin was to due to its competition or to clear its inventory, the end result was the distribution of an increased number of efficient and high performance ASIC miners to the global mining sector, which ultimately led to the increase in the hash power of the Bitcoin network.

Is Bitmain’s dominance in danger with the emergence of Samsung and GMO?

In the first quarter of 2018, Bitmain generated twice the profit of Nvidia, the world’s largest graphics card manufacturer. Nvidia generated $550 million in pure profit while Bitmain recorded $1.1 billion in profit from January to March.

The lucrative business model of Bitmain and its high profits led GMO and Samsung, two of the most influential technology conglomerates in Japan and South Korea, to enter the global cryptocurrency mining industry.

GMO introduced its own ASIC miner with competitive specifications in comparison to Bitmain’s Antminer S9. Samsung Electronics has allocated a portion of its foundry in Suwon, South Korea, to manufacture cryptocurrency ASIC miners, in partnership with emerging companies in the mining sector.

When Samsung Electronics first announced its decision to target the global cryptocurrency mining industry, it emphasized that it remains unsure whether it can improve the company’s revenues in general. But, the emphasis of the establishment on its mining venture was to engage in an emerging industry like crypto, given that it has successfully penetrated into insurance, fintech, electronics manufacturing, car making, and ship building in the past several decades. Samsung Securities analyst, Hwang Min-seong, said in January of this year:

“Samsung Electronics could increase its revenues through ASIC chip manufacturing but because the foundry only accounts for a small portion of the company’s semiconductor manufacturing plant, it is difficult to predict that the firm’s mining venture will have a significant impact on the company’s revenues.”

 Since then, Samsung has aggressively expanded its mining businesses, seeing an increased demand in the market. The uncertainty of Samsung towards cryptocurrency mining demonstrated the firm’s unwillingness to commit to the industry unless the company sees significant potential in both the short-term and long-term growth of the market.

Most recently, Samsung signed a deal with Squire, a Canada-based crypto mining corporation that raised $19.5 million in August to develop cryptocurrency mining equipment, to manufacture ASIC miners on behalf of the Canadian firm.

Around a similar period, Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest independent chipmaker, slashed the growth target of the cryptocurrency mining sector from 9 percent to 6.5 percent.

The conglomerate stated that the weakening of the demand for cryptocurrency mining led the firm to decrease the growth target of the industry. But, it remains unclear whether the report is exclusive to Bitmain, given that TSMC is the manufacturer of Bitmain’s ASIC miners, or to the rest of the industry.

“However, our business is also negatively impacted by further weakening of cryptocurrency mining demand. As a result, we estimate our 2018 growth rate will be about 6.5% in U.S. dollar term, which is close to the foundry industry’s growth but slightly below our 7% to 9% guidance given in the last conference.”

New multi-million dollar mining facilities open

Despite the conflicting viewpoints of Samsung and TSMC toward the demand for cryptocurrency mining, in the past several days, two multi-million dollar mining facilities have opened in Armenia and Colorado.

Local publications in Armenia reported that a new $50 million digital asset mining facility was opened on October 19 with 3,000 ASIC miners to mine Bitcoin and Ethereum. In the upcoming months, 120,000 ASIC miners are expected to be added to the facility.

It was local real estate firm Multi Group Concern (MGT) and Malta-based technology company Omnia Tech International Company which created the facility with the support of the government and local authorities.

The plan to build the facility was originally released in April, when Omnia Tech founder, Robert Velghe, said that the two companies intend to invest more than $2 billion in mining and crypto-related businesses in Armenia.

“We will also help Omnia Tech with the establishment of the Financial Technology Park and the data exchange center in Armenia. We intend to create here a blockchain-based center for the development of new information projects, which will turn Armenia into a high-tech platform.”

On October 25, MGT, the largest mining facility operator in the U.S., announced that it will establish another large-scale mining facility in Colorado equipped with 6,300 Bitmain S9 miners. Already, MGT operates 6,800 Bitmain S9 miners and 50 GPU Ethereum mining rigs in the country.

MGT COO Stephen Schaeffer emphasized that despite the decline in the price of Bitcoin, the company intends to “run into the burning building” to find opportunities, which in this case is to mine BTC.

Regulation and state of the mining sector

Many of the world’s largest economies are in the process of implementing practical regulatory frameworks to facilitate the growth of mining companies. Authorities in South Korea, Japan, and the U.S. have welcomed mining facilities to operate with low-cost energy. Countries with ambiguous cryptocurrency regulations such as China and Russia have also demonstrated a neutral stance towards mining.

Throughout the past 15 months, China has banned virtually every business and activity related to the cryptocurrency sector including trading, events, and over-the-counter (OTC) investment. However, it has opened two use cases of cryptocurrencies: processing transactions and mining digital assets.

Several regional governments in Russia have also opened up to cryptocurrency mining, leading various initiatives to convince major mining companies to launch mining farms in the country.

In August, Deputy Governor of the Leningrad Region, Dmitry Yalo, said at the opening of a new mining facility in Russia that the region intends to lure in more mining centers in the years to come with low electricity prices, qualified personnel, and a naturally cold climate to cool down ASIC miners with no additional costs.

US-China trade war

The conflict between the U.S. and China began to affect chip makers and mining equipment manufacturers based in China, including Bitmain. The 27.6 percent tariffs on the Antminer S9 has made it significantly more expensive for buyers outside Asia to purchase the miner.

Previously, Bitmain was able to ship Antminer S9 miners with no tariffs as the product was classified as a data processing machine. The sudden imposition of tariffs against electrical machinery apparatus, which includes data processing machines, has created an inefficient ecosystem for China’s ASIC manufacturers.

The imposition of tariffs by the US against China comes in a period in which U.S. President Donald Trump has expressed concerns about the lack of reciprocity between the two countries. For many years, China has been able to ship products to the U.S. with near-zero tax and fee, thus, Amazon’s Vice President of Global Policy Paul Misener said once:

“The cost to ship a one-pound package from South Carolina to New York City would run nearly $6; from Beijing to NYC: $3.66.”

South Korea and Japan remain unaffected by the tariffs, and with practical regulatory frameworks established by both countries, Samsung and GMO are expected to continue their successful run in the global mining sector.

As of current, despite the significant drop in the price of major cryptocurrencies, the demand for cryptocurrency mining remains relatively high as seen in the rise in the hash rate of the Bitcoin network and the expansion of Samsung, GMO, and Bitmain’s operations.

Major regions have established positive regulatory frameworks towards cryptocurrency miners and companies, which could lead to the increase in the establishment of mining facilities by investors that foresee a substantial surge in the valuation of the crypto market in the mid-term.

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Hong Kong Issues New Rules to Regulate Cryptocurrency Funds and Exchanges

Hong Kong’s securities regulator issued a statement setting out guidelines for funds dealing with cryptocurrency Thursday, Nov. 1, saying it could move to formally regulate exchanges.

In what it called “guidance on regulatory standards,” the autonomous Chinese territory’s Securities and Futures Commission (SFC) set in motion a series of steps that chief Ashley Alder hinted would culminate in a formal regulatory environment.

Hong Kong differs significantly in its approach to cryptocurrency from mainland China, with cryptoasset exchange and related activities legal, though formal regulation is pending.

“The market for virtual assets is still very young and trading rules may not be transparent and fair,” Bloomberg quoted Alder as saying during a fintech forum Thursday:

“Outages are not uncommon as is market manipulation and abuse. And there are also, I am afraid, outright scandals and frauds.”

The latest proposals pertain to any fund managers investing more than 10 percent of their holdings in cryptocurrency, with entities serving exclusively professional traders able to join a sandbox scheme designed to give more room to develop new products and services.

For others, a licensing process will require entities to inform the SFC about their business practices.

The statement reads:

“In order to afford better protection to investors, the SFC considers that all licensed portfolio managers intending to invest in virtual assets should observe essentially the same regulatory requirements even if the portfolios (or portions of portfolios) under their management invest solely or partially in virtual assets, irrespective of whether these virtual assets amount to ‘securities’ or ‘futures contracts.’”

Cryptocurrency exchanges could also fall under the the SFC’s supervision more directly in future.

“…It is proposed that the standards of conduct regulation for virtual asset trading platform operators should be comparable to those applicable to existing licensed providers of automated trading services,” it adds.

Hong Kong’s sharpening of its regulatory oversight comes while more and more jurisdictions move to do the same, as Bitcoin and major altcoin markets stabilize and a general acceptance of their longevity begins to crystalize.

Last week, Taiwan announced it would release dedicated rules governing Initial Coin Offerings (ICOs) by June next year, having previously chosen not to regulate the sector.

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Will Small Companies Beat Large Corporations if They Use Blockchain?

An American startup is building a blockchain agnostic protocol in a bid to provide small businesses with affordable access to new technology, and drive the mass adoption of blockchain and cryptocurrencies.

Opporty, with experienced founders from the U.S., has also set up a “trusted and verified services marketplace” on the Ethereum blockchain, with features such as smart contracts, decentralized escrow, and lead generation. The company believes its platform helps small and medium enterprises (SMEs) to compete with large corporations, without requiring large investments in technology and marketing.

Widespread coverage

By now, Opporty has launched its platform’s localizations in China, the UK, Canada, the USA, and Australia. As the company reported to Cointelegraph, currently there are approximately up to 10 registrations per day, by new providers on the platform. “Therefore, we observe that SMEs are ready to grow and benefit with Opporty, an online Marketplace that cares,” added the company’s representative.

First providers already signed up

In the beginning of 2018, Opporty has acquired two new clients in New York. Both offer crypto payment options on their websites.

Universal Accounting Systems, uses the company’s platform to allow its clients to pay with Bitcoin and Ethereum for tax preparation and other services. It uses Opporty’s smart widget to offer its clients a simple view of its services, and allows them to pay with cryptocurrency.

Hudson Law Group, a midtown firm headed by David Treyster, has posted some customized crypto-based offerings for its clients using the Opporty marketplace. It also uses the smart widget and has already begun receiving crypto transactions through it.

The company says, the amount of U.S.-based providers which registered on the platform has increased. The Australian version, which has recently been released, already has new providers that accept crypto payments, including OPP, the company’s token.

The widgets by Opporty allow users to receive payments from customers. Companies that have listed their crypto-based offers at Opporty, ​get smart widgets on their websites​. Once the widget is placed, consumers can choose from several payment options, including ETH and BTC.

“Small business owners now realize that cryptocurrencies can give them a head start over their competition,” Opporty founder Sergey Grybniak said in a release. Opporty enables anyone to use cryptocurrency, and the attendant benefits of blockchain, without having to master the underlying technology, the entrepreneur added.

Opporty’s Plasma Protocol

In March 2018, the Opporty team decided to implement ​Ethereum’s Plasma Protocol to “resolve the trust issues in business transactions and lack of privacy in traditional blockchain solutions.” The ​First backend version of Opporty’s Plasma solution allowed users to process around 5,000 transactions per second, the company said.

“Then we have decided to come up with our own solution for ​Plasma Cash​, an enhancement technology for Plasma Protocol. After tireless work, our developers managed to enhance the technology​ to achieve the highest public test, which was more than Alipay at peak,” reported the Opporty team to Cointelegraph.

Opporty’s B2B platform allows providers to list their offerings on the B2B services marketplace in a targeted manner, post requests for proposals, receive bids, and execute deals.

The company claims that it resolves trust and sustainability problems between counterparties by storing business transaction data, including transaction quality, on the blockchain. It enables verification and validation of counterparty trustworthiness by implementing the Plasma Protocol. Its benefits position Opporty as a reliable option for domestic and cross-border transactions using cryptocurrencies, which can be used in supply chain risk management, corporate transactions and government procurements. The PoE protocol allows integration with other blockchain-powered platforms.

Big Achievements

Opporty’s project is constantly acquiring new updates and features, such as BLS threshold signatures and Delegated Proof of Stake, zk-SNARKs.

Right now Opporty is in its beta development, with MVP (Minimum Viable Product) already available for application and use. The open-source code has been released on GitHub.

Opporty is a member of China Cooperative Trade Enterprise Association, and the company is advised by Mr. Daniel Wu, who is a Deputy Director of One Belt One Road Development center.

In April 2018, Opporty joined the Enterprise Ethereum Alliance (EEA), the world’s largest open source blockchain initiative. EEA is a non-profit organization that supports Ethereum-based technology best practices and the whole industry.

The company is proud to be a partner of InfiniVision Network Technology (Shanghai) in the fields of big data and blockchain integrations.

In 2018, ​Opporty has scored two Bronze Awards​, a renowned reward among entrepreneurs and innovators. It won the Stevie International Business Competition in the following nominations: Company of the Year  —  Business or Professional Services  —  Small category, and Online Marketing Campaign of the Year category.

Understanding that an online marketplace could be something much more than just a business product, Opporty has become a UN Global Compact participant. Taking part in this initiative, the Opporty team conducts research work in the fields of resolving issues of poverty and unemployment.

OPP, the company’s token, is already available on several exchanges, and the list is being updated.

 

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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Warren Buffett’s Holding Invests $600 Mln in Fintech Firms Focused on Emerging Markets

Multinational holding conglomerate Berkshire Hathaway – which counts outspoken crypto critic Warren Buffett as its CEO and chairman – has invested around $600 million in two fintech payment firms focused on emerging markets, the Wall Street Journal (WSJ) reported Oct. 29.

Both investments are said to have been spearheaded by one of Berkshire’s two portfolio managers, Todd Combs. In August, Berkshire is reported to have bought a roughly $300 million stake in the parent company of Paytm, India’s largest mobile-payments service.

The second investment was made just this past week, through the purchase of shares in an initial public offering (IPO) for Brazilian payments processor StoneCo, the country’s fourth-largest by volume.

The WSJ underscores that both decisions mark something of a departure for Berkshire, which  which has $711.932 billion in assets under management as of 2018, and is best-known for its investments in blue-chip firms such as Coca-Cola and acquisitions of utilities and insurance firms.

Buffett has in the past said that tech investments are beyond his area of expertise, WSJ notes.

That tech is not within Buffett’s “circle of competence” was affirmed by self-professed Buffett disciple venture capitalist Chamath Palihapitiya this spring, when he took his icon to task for his virulent anti-crypto stance.

Combs, alongside Berkshire’s second portfolio manager Ted Weschler, are nonetheless reported to be “widening the net” of the conglomerate: yet, as WSJ highlights, both Stone and Paytm are considered to be established companies, which dominate their respective local markets and operate in tightly regulated industries.

The WSJ says Berkshire’s backing is a sign of the “maturity” of the fintech sector, which reportedly raised almost $35 billion in venture capital during the first three quarters of 2018.

Berkshire’s move to put major capital into two fintech firms that target emerging markets squares uneasily with the vocal position of Buffett, who has become notorious in fintech and crypto circles for castigating Bitcoin (BTC) as being “rat poison-squared.” He has made repeated statements claiming that Bitcoin is neither a currency, nor a way of investing. In October 2017, Buffet predicted that Bitcoin had entered the “bubble territory,” and was set “to implode.”

India saw soaring demand for cryptocurrencies during the period of economic turmoil that followed its prime minister’s bold — and still highly contentious — demonetization policy in late 2016. Crypto’s popularity continued through 2017, eliciting a controversial anti-crypto crackdown from the country’s central bank (RBI) this April, which has prompted both public and industry-led petitions.

As a final verdict on the RBI ban continues to be repeatedly stayed, the judiciary has now thrown the ball back in the executive’s court, setting a deadline for the government to clarify and finally cement its official position on crypto by mid-November.

This month, in Brazil, the country’s largest brokerage has revealed it will launch a Bitcoin and Ethereum (ETH) exchange, saying it was pushed into the crypto business by the popularity of the asset class among investors.

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Crypto Markets See Stirrings of Volatility as Major Coins Tip Into Red

Monday, Oct. 29: Crypto markets are seeing the first momentum in a while after a period of marked stability: virtually all of the major cryptocurrencies are in the red today, with some seeing losses of between a 4-6 percent range, as Coin360 data shows.

Market visualization by Coin360

Bitcoin (BTC) is trading at $6,352 at press time, seeing an almost 2 percent loss on the day according to CoinMarketCap. Having traded sideways throughout the week, the top coin today saw a vertiginous price drop, plummeting from its $6,480 trading range down to around $6,350 in the couple of hours before press time.

Earlier this month, Bitcoin had achieved a 17-month low volatility rate, recording its highest level of stability since mid-2017: the trend had continued over recent weeks, excepting one short-lived spike on Oct. 15.

Volatility and the lack thereof had become a staple on crypto twitter, with prominent crypto commentators quick to underscore Bitcoin’s new quasi-stablecoin status. Senior market analyst Mati Greenspan from eToro joked on Oct. 24: “Hey stock jocks!!! Tell me again how Bitcoin isn’t a stable store of wealth due to extreme volatility…”

As the market returns to its “normal” momentum, Adamant Capital founder Tuur Demeester has today quipped on Twitter, “is there a way to go long Bitcoin volatility? I would if I could.”

On the week, the crypto is now around 2.7 percent in the red: monthly losses are at around 3.4 percent.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: CoinMarketCap

Having seen similarly stable trading patterns, Ethereum (ETH) has today also been jolted by negative momentum, sliding steeply down 3 percent on the day to trade around $198, according to CoinMarketCap. Over the past week, the leading altcoin has also been trading sideways, showing only marginally more fluctuations than Bitcoin over the same time frame.

This brings Ethereum to a 3.8 percent loss on its weekly chart; monthly losses are a much starker 14.8 percent.

Ethereum 7-day price chart

Ethereum 7-day price chart. Source: CoinMarketCap

All of the remaining top ten coins on CoinMarketCap are in the red, except for stablecoin Tether (USDT), which is trading stably again.

The hardest hit top-ten performer is seventh largest coin Litecoin (BCH), down 5.2 percent on the day to trade around $49.22 by press time. EOS (EOS) is down 4.2 percent at $5.17, roughly on par with Bitcoin Cash (BCH), down 4.25 percent at $419.22.

In the context of the top twenty coins, the market picture is similarly bleak, with all assets seeing losses of within a 1-5 percent range. Anonymity-oriented alt Monero (XMR) is the least scathed, losing 1.1 percent over a 24 hour period to trade at around $101.43.

TRON (TRX) is down 4.9 percent at $0.022, IOTA (MIOTA) is down 4.23 percent at $0.456, with Ethereum Classic (ETC) pushing a 4.85 percent loss at $9.12.

Total market capitalization of all cryptocurrencies has slid to around $203.6 billion as of press time. Since its interweek peak at $211.1 billion Oct. 24., the market had held around or just below the $210 billion mark for much of the week before today’s tumble.

7-day chart of the total market capitalization of all cryptocurrencies

7-day chart of the total market capitalization of all cryptocurrencies from CoinMarketCap

In crypto news today, major European cryptocurrency exchange Bitstamp has been acquired by Belgium-based investment firm NXMH. NXMH is a subsidiary of South Korean-based media giant NXC Corp., which bought a 65.19 percent stake in South Korean crypto exchange Korbit last year.

Meanwhile, the operator of Japanese crypto exchange Coincheck, which suffered an industry record-breaking hack this January, has revealed the exchange saw a 66 percent decline in revenue for Q3 2018.

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Skirting the Great Wall: The Chequered Saga of Crypto in China, 2013-2017

Take a quick look at CnLedger, a Twitter-based Chinese crypto news information source, and a tweet pinned at the top of its profile might come as something of a surprise:

On Sept. 30 2018, China’s oldest tech journal, the Beijing Sci-Tech Report (BSTR), announced it would be offering subscriptions payable in Bitcoin (BTC). And Ethereum Hotel, reportedly the “first” Chinese hotel to accept Ethereum (ETH) as payment, is poised to open its doors in the country’s southwestern Sichuan Province.

How does all this square with Beijing’s notorious onslaught of anti-crypto regulations? How is it possible that you can buy a McLaren or Ferrari using major cryptocurrencies, and yet cannot legally operate a cryptocurrency exchange in the country?

What of official reports that China’s initial coin offerings (ICO) industry continues to find means of “reemerging,” despite a domestic blanket ban on the fundraising model? And how do all these facts align with the Chinese central bank’s exploration of issuing its own digital currency, which started as early as 2014?

Cointelegraph looks back at Chinese authorities’ cumulative attempts to make the People’s Republic impregnable to the crypto phenomenon — and the whip-smart industry response — in the first of a three-part series, spanning 2013 to the present.  

2013: Restrictions on financial institutions’ Bitcoin dealings, stark warnings about financial stability threats, but a hands-off approach to crypto trading

2013: Restrictions on financial institutions’ Bitcoin dealings, stark warnings about financial stability threats, but a hands-off approach to crypto trading

In a Dec. 3 circular, the Chinese government defined Bitcoin as a virtual commodity, declaring that it was not recognized as legal tender. The government said the directive was needed to “protect the property rights of the public, protect the status of the renminbi [RMB]* as the statutory currency, prevent risks of money laundering and protect financial stability.”

* Renminbi or [Chinese] yuan are interchangeably used to refer to China’s national fiat currency.

While warning that “excessive speculation” in virtual currencies* “harms the public interest and the legal currency status of the RMB, the government nonetheless allowed citizens to freely participate in the online trading of such commodities “at their own risk.”

* The term 虚拟货币 (“virtual currencies”) is used to designate cryptocurrencies in Chinese.

2013’s so-called ‘Notice on Precautions Against the Risks of Bitcoin’ was signed by five official entities, the People’s Bank of China (PBoC), the Banking Regulatory Commission (CBRC), the Ministry of Industry and Information Technology (MIIT), the China Securities Regulatory Commission (CSRC), and the China Insurance Regulatory Commission (CIRC).

The notice stipulated that financial and payment insitutitions were prohibited from dealings in Bitcoin, including banks, and that crypto exchanges should register with the government’s Telecommunications Regulatory Agency and comply with anti-money laundering (AML) and know-your-customer (KYC) measures. It also advocated for financial institutions to propagate investment and virtual currency education in order to “guide the public to establish correct monetary concepts and investment philosophy.”

The PBoC considered at the time that “the public lacks sufficient understanding of Bitcoin, and some individuals have been caught up by faddishness or a speculative mentality in holding, using and trading in Bitcoin,” warning that “ordinary investors who blindly follow the crowd can easily suffer major losses.”

2016: PBoC reveals it has been studying the possibility of issuing state-backed digital currency since 2014

2016: PBoC reveals it has been studying the possibility of issuing state-backed digital currency since 2014

On Jan. 20 the PBoC held a Digital Currency Seminar, attended by PBoC governor Zhou Xiaochuan, the bank’s deputy governor, and a gamut of experts from domestic and foreign research and financial institutions, as well as consulting firms — including representatives from Deloitte and Citigroup. In its official press release, the central bank stated its intent to launch a state-backed digital currency, considering the move would have “positive practical and far-reaching historical, significance”:

Since 2014, [the PBoC] has set up a dedicated research team [to thoroughly study] a framework for digital currency issuance [encompassing its prospective] circulation, environment, legal problems, the impact of digital currency on the economic and financial system, [and] the relationship between legal and privately issued digital currency.”

The central bank stated that it considered that a state-backed “legal” digital currency could bring down the high cost of distributing and circulating paper notes, as well as bring greater transparency to economic transactions — thereby reducing money laundering, tax evasion, and other criminal acts. It also proposed its issuance would have a positive impact on financial inclusion, help to improve China’s new financial infrastructure, and enhance the efficiency of payment and settlement systems .

The statement further proposed that digital currency would give the central bank greater control over the circulation of money, bolstering economic and social development. Reports at the time estimated that around $843 billion of capital had flowed out of China in the eleven months leading up to November 2015 — meaning that policy makers were being forced to inject funds into the system in order to prevent interest rates from rising.

Even as the bank lauded the “great importance” of its digital currency project and praised participants’ rigorous analyses of relevant theoretical matters, practical exploration and development prospects, it notably remained silent on the phenomenon of decentralized cryptocurrencies such as Bitcoin.

2017: PBoC exchange scrutiny

2017: PBoC exchange scrutiny

On Jan. 6, the country’s central bank, the PBoC, released a notice that it had contacted relevant regulatory authorities and ordered them to meet with major Bitcoin trading platforms to scrutinize their business operations and regulatory compliance and carry out a corresponding “clean-up” where necessary. The notice reaffirmed the official stance that Bitcoin was not considered currency by China’s government.

Renewed attention came as the estimated share of global Bitcoin trading denominated in the Chinese yuan was commonly set at between 50 to as high as 90 percent.

The day before the bank’s action, Jan. 5, the global Bitcoin market had taken a steep 21 percent price plummet, with Bitcoin tumbling from over $1190 to $938. The South China Morning Post (SCMP) reported that — in the midst of the coin’s vertiginous decline — Chinese investors were experiencing system failures on major exchanges such as BTCC and OKCoin.

PwC China Fintech Partner William Gee told SCMP that “investors suffered losses as they were unable to trade, possibly because of the sudden price fluctuation and large sell offers.” The official China Securities Journal had for its part stated that:

Regulators have noticed that some Bitcoin platforms crashed during the recent market volatilities, causing some investors, particularly those trading with leverage tools, to bear huge losses because they were unable to log on to the website during the sell-off.”

Domestic industry leaders stepped up to calm investors, as news of the on-site inspections only further unsettled market participants. Bobby Lee, CEO of the popular Shanghai-headquartered BTCC exchange, tweeted on Jan. 6:

“BTCC regularly meets with the People’s Bank of China and we work closely with them to ensure that we are operating in accordance with the laws and regulations of China. The press release put forth from the PBOC today outlines that there is significant volatility in Bitcoin trading, and also quoted from a notice released in 2013 saying that Bitcoin is a virtual good and doesn’t have legal tender status. All of our users should be aware of the current policies on virtual goods as well as the risks involved in trading in volatile markets.”

On Jan. 11, the PBoC launched spot checks into leading domestic crypto exchanges BTCC, Huobi and OKCoin. Reuters contextualized the move at the time as part of Beijing’s efforts to “stem capital outflows” and “relieve pressure” on the yuan. The agency noted that the yuan had fallen 6.6 percent against the dollar over the course of 2016 — the worst chapter in its price performance since 1994.

CNY/USD Exchange Rate in 2016

Several crypto analysts had gone so far as predict an eventual “quasi-synchronization” between the yuan’s declining fortunes and Bitcoin’s ascent, noting that Chinese investors were increasingly using the cryptocurrency as a vehicle for conveying value into more stable foreign currencies — and also as an instrument for speculative trading. The Omni Foundation’s Patrick Dugan proposed that “for every one percent that the yuan devalues, Bitcoin pops 10-15 percent.”

On the day of the inspections, PBoC’s Shanghai headquarters clarified that “in order to prevent market risks,” the central bank was scrutinizing exchanges’ business practices and regulatory compliance standards, mentioning only BTCC by name.

View of the action as being tied to escalating capital outflows was widely echoed, with China’s QQ.com reporting that the bank’s crypto exchange scrutiny was “possibly to investigate the use of the digital asset to evade capital controls.”

The trend significantly raised the stakes for Chinese crypto traders; director of the Finance and Securities Research Institution at Wuhan University of Science and Technology, Dong Dengxin, observed that “the policy risks of Bitcoin trading in China are higher” because of the country’s capital controls. “If bitcoin trading disturbs China’s financial order, there’s a possibility it will be deemed illegal or banned.”

China’s ‘big three’ exchanges, Huobi, OKCoin and BTCC — which had hitherto been zero-fee — soon announced in separate statements on Jan. 22 that they would begin charging clients a flat 0.2 percent commission fee for each transaction. The exchanges are said to have rationalized the move by stating that such fees would help “curb market manipulation and extreme volatility.”

An insider source claimed at the time that while the exchanges had not received direct instructions from the PBoC, they had decided to introduce trading fees to align with the bank’s wishes “to see the Bitcoin market cool down.” The platforms also stopped margin lending under the pressure of PBoC’s intensified scrutiny.

On Feb. 8, the central bank then warned nine smaller domestic exchanges that they faced potential closure if they violated regulations or offered margin lending. Of the larger exchanges, OKCoin and Huobi issued statements on Feb. 9 they would be halting Bitcoin withdrawals completely, with BTCC reviewing the matter and subsequently announcing on Feb. 15 it would be suspending crypto withdrawals until March 15.

The withdrawal freeze on all three platforms eventually lasted until early June, and had an almost immediately-felt impact on the Bitcoin market. As CryptoCompare.com’s Charles Hayter observed mid-February:

When China sneezes Bitcoin catches a cold. The PBoC moves to regulate Bitcoin more stringently will bring short term woes. Volumes can be expected to again slow in China as more friction is incorporated in the form of KYC and AML policies. For the duration of this transition the CNY-BTC pairs can be expected to trade at a discount to other fiat-BTC pairs.”

2017: criminalization of ICOs

2017: criminalization of ICOs

On Sept. 4, a total of seven Chinese central government regulators — the PBoC, the Cyberspace Administration of China (CAC), MIIT, the State Administration for Industry and Commerce (SAIC), CBRC, CSRC, and CIRC — jointly issued an Announcement on Preventing Financial Risks from Initial Coin Offerings (ICO Rules).

The announcement stated that ICOs that raise “so-called virtual currencies” such as Bitcoin and Ethereum “through the irregular sale and circulation of tokens” are engaging in “unauthorized” public financing, which is illegal.

It reiterated that virtual currencies involved in ICOs are “not issued by the country’s monetary authority” and therefore are neither legal nor mandatorily-valid tender. They are divested of the legal status of fiat currencies and so “cannot and should not be circulated nor used in the market as currencies.”

The ICO Rules further warned that a host of financial crimes — such as the illegal issuance of tokens or securities, illegal fundraising, financial fraud, or pyramid schemes — may be associated with ICO projects, and that, if discovered, such cases would be transferred to the country’s judiciary.

The announcement ordered all types of ICOs to “be stopped immediately” and to return any assets held in investors’ accounts to these investors as soon as possible.

2017: official restrictions on crypto exchanges

2017: official restrictions on crypto exchanges

Not only were domestic ICOs banned, but the first of a series of restrictions were imposed on cryptocurrency exchanges. Pursuant to the new rules, exchanges were forbidden from enabling clients to convert legal tender into crypto, or vice versa; from buying or selling virtual currencies as a central counterparty; and from setting a price for virtual currencies, or providing other related brokerage or commission services.

Further, the MIIT stated it would shut down websites, delist crypto-trading mobile applications from app stores, and would request that the SAIC revoke the business licenses of exchanges.

The Sept. 4 announcement also extended the existing prohibition on financial and payment institutions’ crypto dealings, stating that they were forbidden from “directly or indirectly” providing products or “services such as account opening, registration, transaction clearing or settlement” for ICOs and virtual currencies. They were also barred from providing insurance services to both ICOs and crypto-related businesses.

Lastly, the seven regulators robustly warned against investors being “fooled” by ICO and crypto-related investments, soliciting the public to “report relevant violations in a timely manner.” The announcement ordered financial industry organizations to “self-discipline” and “stay away from market chaos,” in order to collectively maintain a “normal” financial order.

Following the announcement, on Sept. 15 the Beijing Internet Finance Risk Working Group met with senior officials of crypto trading platforms in the Chinese capital, ordering them to set a deadline for ceasing their trading services; to immediately stop registering new clients; and to outline a detailed plan for how to refund clients’ assets. Authorities were also reported to have issued similar orders to crypto exchange officials based in the cities of Shenzhen and Shanghai.

“The scope of the cleanup” was not limited to curtailing major exchanges’ operations, but aimed at an internet-wide swoop of related websites, internet forums, as well as chat groups on WeChat and QQ — two of China’s most popular social media platforms. The former counted a staggering 963 million active users at the time.

In a media interview mid-September, Lokman Tsui, an assistant professor at the School of Journalism and Communication at the Chinese University of Hong Kong, noted that many hitherto active crypto-dedicated groups on WeChat were swiftly disbanding:

“If you are a group chat leader you have two choices, either you are going to super actively monitor the group, because your livelihood is at stake, or you’re going to delete the group. It’s a chilling effect.”

China’s largest crypto exchanges swiftly fell into line with Beijing’s orders. BTCC told customers on Sept. 14 it would completely shut down on Sept. 30 in accordance with the new restrictions, and would refund any renminbi, Bitcoin, Litecoin and Ethereum held in users’ accounts.

Huobi made a similar announcement on Sept. 15, stating it would be halting new registrations and deposit services, and would be ceasing all services by Sept. 30. OKCoin announced on Sept. 15 it would cease all trading on Sept. 30.

Also on Sept. 15, ViaBTC said it would deactivate the ViaBTC official website for mainland China Sept. 30 and return any holdings of renminbi or Bitcoins to clients before then.

By mid-September 2017, reports were emerging that the impact of the protracted freeze on services at major domestic crypto exchanges as they had faced scrutiny from the PBoC had seen the country’s share of global Bitcoin trading drop to just over 10 percent.

Yet even as the dust was just beginning to settle on the September ban, Chinese investors were increasingly turning to alternatives such as peer-to-peer (p2p) platforms and OTC trades; China’s LocalBitcoins market posted its highest-ever weekly volumes of 115 million yuan during the week leading up to Sep. 23.

By Oct. 27, the “second life” of China’s exiled “crypto barons” was already becoming apparent — 19 formerly China-based companies had already applied for a Japanese crypto exchange license. Other crypto-“friendlier” jurisdictions at that time were deemed to include Hong Kong, Singapore and South Korea.

As early as May, OKCoin had in fact begun to encourage domestic traders to migrate to its newly-launched Hong-Kong based fiat-crypto trading platform OKEx, beginning with futures trading.

On Nov. 1 OKEx launched an OTC platform, with the Chinese yuan tellingly the only supported fiat currency at the outset. The company’s financial market director, Lennix Lai, said that the new OTC service would aim to serve Chinese investors, many of whom had been tiding over the tumultuous 2017 fall by trading p2p.

In parallel, Huobi rebranded as Huobi Pro and incorporated its operations in the Seychelles, then rolling out its own OTC service on Nov. 4 to enable direct, p2p yuan-crypto transactions.

Alongside their relocations overseas, OKEx and Huobi’s OTC platforms thus enabled domestic investors to use mobile payment methods such as Alibaba’s Alipay or Tencent’s WeChat Pay to purchase cryptocurrencies. OTC purchases were typically made a ten or even twenty percent premium as compared with prices on global crypto exchanges, due to the intensity of demand in an increasingly stifled trading climate.

In November, the government caught up: China’s National Committee of Experts on Internet Financial Security issued a Bitcoin OTC report, remarking that “over-the-counter trading is booming,” and that “this warrants further attention.”

The report took stock of burgeoning number of OTC platforms, highlighting that whereas only four such platforms had been active before October, the number had now risen to twenty one.

Taiwan-based OTC platform OTCBTC, according to media reports, had seen $100 million in transactions in the first 50 days since its launch in October.

In an interview with SCMP, Leonhard Weese, president of the Bitcoin Association of Hong Kong, further observed that even as OTC services had not been officially banned, increasing concerns over government surveillance were pushing p2p traders to encrypted messaging services such as Telegram:

“Telegram is very popular for large over-the-counter trades. While WeChat is used by the less paranoid.”

In those last months of a turbulent year, Wesse considered that China’s “authorities are more worried about the narrative, rather than what people actually do. Once it gets widely reported that Bitcoin trading is well and alive in China, the government will again try to put a lid on it.”

2013-2017: the evolution of a toughened anti-crypto stance

Between 2013-2017, China’s authorities thus evolved an increasingly draconian stance as their perception of the financial risks posed by cryptocurrencies hardened. In 2013 they deemed Bitcoin to be a “faddish” and speculative phenomenon, thus prohibiting financial institutions’ dealings with crypto, yet allowing individual investors to bear the risks for their trades.

Pressure on the yuan and escalating capital outflows provided fresh impetus for coordinated action from the country’s regulators; they specifically targeted the ICO space, perceiving it to be rife with dangers for wider fiscal stability, and took action against online trading platforms. The measures nonetheless inadvertently fostered alternative channels such as OTC trades and did not prevent exchanges from flourishing in “friendlier” overseas jurisdictions.

Cointelegraph’s three-part series will continue to trace Chinese authorities’ continued attempts to ring-fence crypto from mainland investors, as they broadened their offensive to tackle the mining industry, as well as perceived regulatory “loopholes,” both on- and offline.

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We Should Not ‘Scurry to Keep Pace’ With Fintech, Says CFTC Commissioner

A new commissioner at U.S. regulator the Commodity Futures Trading Commission (CFTC) repeated called for handling fintech – including blockchain and cryptocurrency – with an “open mind” in a speech Thursday, Oct. 25.

Speaking at the 2018 International Swaps and Derivatives Association (ISDA) Annual Japan Conference in Tokyo, Rostin Behnam, who has now held the post for a year, revealed he had spent much of that time focusing on issues related to disruptive fintech.

“I am surprised by the amount of time I spent examining issues related to bitcoin, crypto assets, distributed ledger technology (DLT), artificial intelligence, and cloud-based programming,” he told the audience.

Behnam also spoke to the variety of potential use cases for DLT, such as blockchain, listing the range “from agriculture to healthcare, finance to art, CryptoKitties to Dogecoin.”

Calls for fair handling of disruptive technology have also come from regulators of other spaces. As Cointelegraph reported this week, the chairman of the U.S. telecoms regulator defended the need for a “level playing field” for phenomena such as blockchain going forward.

Preempting the importance of such phenomena marks a further key focus for Behnam, who added about his engagement with the crypto, DLT and AI sectors:

“I had no single goal in mind, just a desire to avoid being the typical regulator on the tail end of technological advancement, scurrying to keep pace with swift innovations that capture market efficiencies, open markets to new products and participants, and often reward those willing to take risk.”

Both the CFTC and fellow U.S. regulator the Securities and Exchange Commission (SEC) have increasingly found themselves in the spotlight regarding the cryptocurrency industry this year.

The latter, having rejected a raft of Bitcoin exchange-traded fund (ETF) applications in August, is now communicating with prospective operators who are attempting to iron out the agency’s concerns about their offerings.

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All Quiet on the Crypto Front as Bitcoin, Altcoins Shun Volatility

An eerie calm continues to linger over cryptocurrency markets Friday, Oct. 26, as Bitcoin (BTC) volatility hits an all-time low and altcoins remain stagnant.

Market visualization from Coin360

Data from Cointelegraph’s price tracker and Coin360 paints an underwhelming picture for short-term speculators, but one that has delighted many analysts, who have begun hailing a new era of Bitcoin stability.

On Friday, Bloomberg joined the multiple cryptocurrency industry commentators to highlight Bitcoin’s lack of volatility, with October 2018 being the least volatile for eighteen months. Commentators claimed this was a sign the leading coin was nearing its bottom.

At the same time, one fund management head told the publication, the ongoing bear market should be “getting tired” and a bullish upturn was likely to form Bitcoin’s next move.

That sentiment was repeated by Fundstrat Global Advisors’ Tom Lee earlier this week in separate comments to Cointelegraph.

At press time, BTC/USD is up just a fraction of a percent over the past 24 hours to trade around $6,480. The pair has also remained uncannily stagnant since the end of last week.

Bitcoin 7-day price chart

Bitcoin 7-day price chart. Source: CoinMarketCap

Among the altcoins, Ethereum (ETH) is also recording only a minute percent change over the past 24 hours to press time.

Attention had largely fallen away from the largest altcoin asset this week ahead of a planned hard fork in January which, as Cointelegraph reported, has faced various hurdles to its implementation. Constantinople, as it is known, was originally scheduled for next month.

ETH/USD is currently trading just under $203, just slightly down since the same time last week against a backdrop of around 8 percent monthly losses.

Ethereum 7-day price chart

Ethereum 7-day price chart. Source: CoinMarketCap

Across the top twenty altcoin assets, no anomalies to the sideways trading trend had appeared, with coins staying within a tiny 1 percent of their position 24 hours previously. The only exception is Zcash (ZEC), ranked 19th by market cap, which is seeing a little over 4 percent losses to trade at $121.22 by press time.

Total market capitalization of all cryptocurrencies remains just under $210 billion, a level it has been holding close to for the past week.

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Major Agriculture Companies Partner to Use Blockchain in Grain Trading

The world’s four largest agriculture companies, commonly known as ABCD, have partnered to digitize international grain trading by using blockchain and artificial intelligence (AI) technologies, Reuters reports Thursday, Oct. 25.

ABCD, composed of Archer Daniels Midland Co., Bunge Ltd., Cargill Inc., and Louis Dreyfus Co., states that blockchain implementation could make trading more efficient and transparent, as well as reduce costs. The conglomerate aims to digitize the system that has previously relied on paper contracts, invoices, and manual payments.

According to grain industry news outlet World-Grain.com, blockchain and AI will be initially used to automate grain and oilseed post-trade execution processes, which are a highly manual and costly part of the supply chain.

In the long run, ABCD plans to integrate blockchain technology on different levels of the supply chain, including shipping, storage, and customer experience.

As cited by World-Grain.com, CEO of Louis Dreyfus Co. Ian McIntosh explained how blockchain could help develop the agriculture industry, noting the technology’s “capacity to generate efficiencies and reduce the time usually spent on manual document and data processing.”

Major food giants across the world have been testing blockchain to improve the efficiency of the supply chain. Louis Dreyfus Co., along with four other parties, conducted its first blockchain-based shipment back in January 2018, sending soybeans from America to China using the Easy Trading Connect (ETC) blockchain platform.

U.S. national milk marketing cooperative Dairy Farmers of America also piloted decentralized solutions among its farmer-members in 48 states, while major Dutch supermarket chain Albert Heijn used blockchain to track orange juice production.

As per a recent study by Reportlinker, blockchain use in agriculture and food supply chains market will be worth over $400 million in the next five years.

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