Sequoia China, Polychain Lead Blockchain Startup's $28 Million Round

Blockchain startup Nervos Network has announced the completion of a $28 million Series A funding round.

The company said on Wednesday that major investors in the round included token-focused hedge fund Polychain and venture capital firm Sequoia China, as well as several China-based blockchain startups like wallet services Bixin and imToken.

The new financing will be put to use expanding Nervos’ product and engineering team with the aim of speeding up the development of its own enterprise blockchain infrastructure, the firm said.

Co-founded by Jan Xie, a former ethereum foundation developer who authored the Ruby implementation, the startup aims to create its own public blockchain network, also called Nervos.

Taking a hybrid approach that combines a public blockchain with another layer of what it calls an “application chain,” Nervos claims the system will resolve the common blockchain issues of scalability and security simultaneously.

The approach is meant to allow companies to develop decentralized applications on top of a secure public network, but run them in the application chain layer – removing the need for enterprises to commit “their entire tech stack to the blockchain.”

Xie said in the announcement:

“While there are undeniable benefits for enterprises that utilize blockchain technology to innovate and improve existing systems, enterprise adoption has been held back by a host of challenges like scalability, security, and complexity.”

The new funding also marks the latest investment move by Sequoia China in the blockchain industry, following recent reports of the venture capital firm’s participation in bitcoin mining giant Bitmain’s Series B round funding.

Earlier this year, Polychain also invested in a Swiss blockchain startup’s $61 million funding round with venture capital giant Andreessen Horowitz. DFINITY Stiftung said the funding would go toward development of its protocol, aimed to support a public decentralized cloud computing platform.

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EOS, Litecoin, Stellar Lumens, Tron, IOTA Technical Analysis: Alt-coin Buyers Going Full Throttle

Safe IOTA and Tron, Litecoin and EOS were particularly slow yesterday. That’s even at the backdrop of solid news of Peter Thiel investment at Block One, Moon Zebra launching new Litecoin supporting ATMs at Malta and Tron burning 92.4 billion ERC20 tokens. Overly though, we remain bullish and expect Q3 to be a spring board for Q1 and 2 bear reversals.

Let’s have a look at these charts:

EOS Technical Analysis

EOS Daily Chart By Trading View

The announcement from Block one that is has received investment from Peter Thiel, the co-founder of PayPal and a member of board at Facebook was but timely. But that’s not the point.

The fact that Dan Larimer, the co-founder of EOS said that he was excited to receive funds from world-renowned investors as Jihan Wu of Bitmain and Hedge Fund managers as Alan Howard and Louis Bacon tells a lot of the future plans of EOS.

So far, not only does EOS register high transactional volumes as seen from Blocktivity but we are also seeing the network registering high through puts. At one point, for example, the network was processing 2351 TPS.

Price wise yesterday was pretty rapid and EOS bulls did follow through July 16 bulls. Because of this, traders out to ramp up their longs on every retracement in lower time frames and trend with this intermittent trend.  As it is, everything is in line with our previous price projection and we shall hold the same preview with aggressive traders buying on dips with stops at July 13 lows at $13.

Litecoin (LTC) Technical Analysis

Ltiecoin (LTC) Technical Analysis

Litecoin Daily Chart By Trading View

Malta and a couple of other Asia nations as Japan for example are proving to be the backbone of cryptocurrencies. Not only are their stock exchanges supportive of cryptocurrencies but their policies are pro blockchain development.

It’s no wonder that a start up Moon Zebra is now launching General Bytes cryptocurrency ATMs in Sliema. This way, average users who don’t find it easy to transact at exchanges as BitStamp can easily buy or sell Bitcoin and Litecoin for Euros.

As the positivity permeates so are traders willing to exit their shorts and tune in with buyers aiming to lift prices back to $110. In line with that, traders can begin loading up with every correction in lower time frames even though trade volumes are low. Ideally-and this is a reiteration, we need to see pumps-with high volumes-above $90, the upper limit of this $20 trade range before conservative join in the party.

Stellar Lumens (XLM) Technical Analysis

Stellar Lumens (XLM) Technical Analysis

Stellar Lumens Daily Chart By Trading View

Shortly after Tempo, we now have Stronghold USD, a stable coin, describing themselves as venture Capital backed and with ambitions of stabilizing the volatile cryptocurrency market.

It will launch on the Stellar platform and in collaboration with IBM, the financial company, will “explore” on how their stable coin shall be of use to blockchain based businesses mainly within the banking sector. Behind Stronghold is Prime Trust, a trust whose main aim is to liquidate cryptocurrencies for fiat.

Back to price action and our long trades are live following that break out above 22 cents on July 16. While we did see a strong follow through after that high volume candlestick, we expect to see further gains today and through this week.

As before, our first targets lie at 30 cents and in that regard buying on pull backs retesting 22 cents would be a perfect trading plan. Safe stops would be at 20 cents or July 15 lows.

Tron (TRX) Technical Analysis

Tron Daily Chart By Trading View

It’s obvious that the team behind Tron want to see a fully functional blockchain with its own coins priming the network. Therefore, in that regard the Tron Foundation did destroy almost 92.4 billion TRX ERC20 tokens and you can actually track and see this figure from ETHScan.

These tokens are from Binance and other exchanges which have completed token migration and now support TRX coin withdrawal and deposit.

Yesterday’s price action cements our trade plan. Notice the high volumes injecting momentum from July 16 bullish candlestick.

Now as before, we can begin buying on dips at current spot rates and go full throttle once buyers edge above 4 cents. Either way, our first targets would be at 8.5 cents with stops at July 16 lows at around 3.5 cents.

IOTA (IOT) Technical Analysis

IOTA Technical Analysis

IOTA Daily Chart By Trading View

Buyers are definitely in charge and even though prices are moving inside a trade range, it’s possible that bulls would have enough momentum to break and close above $1.3, our buy trigger.

Nonetheless, we can open a small position today and try ride with the bulls loading with every pull back. Once our buy orders are filled at $1.3, my suggestion would be to go full throttle buying on dips with eyes on May and June highs at $2.5.

Disclaimer: Views and opinions expressed are those of the author and aren’t investment advice. Trading of any form involves risk and so do your due diligence before making a trading decision.

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Stellar Becomes ‘First’ Sharia-Certified Blockchain for Payments And Asset Tokenization

Stellar, an open-source platform for distributed payments, is reportedly the first distributed ledger protocol to obtain Sharia compliance certification in the money transfer and asset tokenization field, according to a Stellar blog post published July 17.

The Shariyah Review Bureau, a leading international Sharia advisory agency licensed by the Central Bank of Bahrain, has examined the capabilities and applications of Stellar and released guidance that allows for the deployment of Stellar technology in Islamic financial institutions.

With the certification, Stellar will ostensibly be able to enhance its ecosystem in regions where operation in the field of financial services requires compliance with Islamic financing principles. This move will allow financial institutions located in the Gulf Cooperation Council and some parts of Southeast Asia to implement Stellar technology in their Sharia-compliant product and service offerings.

While Stellar calls itself “the first” Sharia approved distributed ledger protocol in the area of money transfers, cryptocurrency NOORCOIN was certified with a Sharia Certificate from the World Sharia Advisory Committee in March, calling itself “the first sharia-compliant utility token.”

In April, Bitcoin (BTC) was recognized as “generally permissible” under Sharia law according to a report released by an internal Sharia advisor to fintech startup Blossom Finance. The author of the report, Muhammad Abu Bakar, concludes with a warning, saying that while he considers digital currencies to be halal (permissible), in most cases traders should not purchase them for investment purposes.

Last month, South Korean blockchain lab IncuBlock signed a Memorandum of Understanding with a Malaysian government advisory committee for blockchain tech development permissible under Sharia law. The entities will work on developing a blockchain platform and a decentralized application (DApp) that will meet the “social requirements” to be considered halal by the Sharia Commission.

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XRP Technical Analysis: XRP Bulls Set To Dominate Q3 2018

On a weekly basis, XRP is up 14 percent as buyers continue to reverse their two month losses and syncing with April’s rally. As it is, buyers are in charge and poised to gain more thanks to the resurgent ETH and Bitcoin hauling prices from key support line.

From the News

For once, put aside the drama, the divorce case between Ripple the company and XRP created by Ripple Labs and focus on the real deal: The value proposition that you the investor will directly benefit from.

It’s what makes investment sense and the question we ask is if XRP will be more valuable than Bitcoin in the near future. First, there is a total supply of 100 billion XRP and out of those around 45 billion are in circulation with an extra 55 billion in escrow. So while we cannot expect each XRP to print a $10,000, a valuation of $10 a piece would make many multi-millionaires but is there hope?

Remember, not many people are using XRP for money transfer and things like those but are rather speculating on it. This is why there was this drive by Ripple the company to educate people of how the technology works and how it solves real life problems. A couple of XRP front page dominating “air drops” to different charities sent the message across.

Secondly and this will have an exponential effect is the level of acceptance in Asia, an important frontier in cryptocurrencies in general. SBI Holding’s VC Trade CEO thinks XRP will be a standard in cryptocurrency and that’s why his exchange is XRP centric and running two years after making proposals.

Asheesh Birla is Bullish on XRP

Besides, in India the decision by the Supreme Bank to stand by RBI’s decision paves way for XRP to dominate Indian cryptocurrency space. Asheesh Birla, the VP of Product at Ripple, said they were hoping to seal deals with the top 3 banks in India and capture 80 percent of the market share.

“…..But then we realized that if you get the top three banks in India onto Ripple, you get 80 percent of the market share.”

When they do, these banks shall utilize xRapid and XRP meaning company adoption, demand and value expansion.

XRP Technical Analysis

Weekly Chart

XRP Weekly Chart By Trading View

As usual, if you want a price action Picasso then the weekly chart would paint that for you. So far, I’m not convinced that the market is “rallying” as there is saturation on the streets. However, what we do know is that XRP is in an energy sapping consolidation with anchors at 45 cents an

d still trading within July 1 high low. In fact that candlestick is a doji and printed right at support.

So, perhaps that bullish candlestick by week ending July 9 could have sent buyers higher but last week’s bears didn’t confirm that move meaning our buy triggers are yet to be hit.

In real sense, we need strong bulls to drive prices past week ending June 24 highs at 55 cents before we start recommending buys on every dips.

Daily Chart

XRP Technical Analysis

XRP Daily Chart By Trading View


In the daily chart, the consolidation is clear and what we do need despite July 16 bullish engulfing candlestick is moves above 55 cents, our buy triggers as mentioned before. Before then, we stay neutral with a bullish skew knowing very well that we are still in a bearish trend with sell surge below 45 cents cancelling our long proposals. Ideal bull targets stand at 70 cents and later $1 and we might see strong moves above 50 cents today.

Disclaimer: Views and opinions expressed are those of the author and aren’t investment advice. Trading of any form involves risk and so do your due diligence before making a trading decision.

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Silicon Valley Elite Duran Liu Uses Atlas Protocol to Break Blockchain’s Marketing Value

This is a paid-for submitted press release. CCN does not endorse, nor is responsible for any material included below and isn’t responsible for any damages or losses connected with any products or services mentioned in the press release. CCN urges readers to conduct their own research with due diligence into the company, product or service mentioned in the press release.

“There must be a marvelous business model, like the one of internet search advertising, that will be born during the wave of blockchain revolution” this is one of the most impressive statements from Duran during the interview.

Duran Liu is the co-founder of Atlas Protocol, the head of Nebulas Labs, and a former senior engineer of Google Headquarter. During his tenure at Google, he led multiple machine learning application projects at Google Play and Cloud Firebase. He was also a senior engineer at Free Wheel and helped produce the earliest mobile video advertising products. Additionally, he worked in IBM as a software engineer at the development lab. Duran graduated from Huazhong University of Science and Technology.

The fast development of blockchain has attracted more and more Internet veterans to join this industry. After the era of “getting super rich overnight” is gone, Duran still decided to stay in the industry. What has been his experience in blockchain?

A Utopian Experiment

In 2009, Duran Liu was still a Software Engineer in IBM China Development Lab and first got to experience Bitcoin because of his curiosity towards new technology. At the time, the general belief towards Bitcoin is that after ten years–either bitcoin will become very popular, or it will be worthless. Duran only took part in this “Utopian Experiment” as a participant, but he did not realize the value of this new technology at the time.

Just like the plot in the drama “The Big Bang Theory”, Duran received some free Bitcoins through community, and also tried to mine Bitcoin on his personal computer. But because the computer that had stored the information of his wallet was formatted, he lost what could have became a huge fortune in later days.

“Even though a few years afterwards, when I heard about the steep rise and fall in the price of Bitcoin, I still believed that blockchain was a big bubble, until 2017.” Duran said.

It was the time when smart contract ICOs became popular in the blockchain industry. On the one hand, the price of Bitcoin kept climbing up and started to fork, media coverage was everywhere. On the other hand, blockchain project teams started to present their technology work and build up their communities. The discussion about blockchain technology and digital currency got more and more popular in Google.

“Nebulas was one of the earliest teams from China to present blockchain technology at the Google headquarter in Silicon Valley. It was my first time getting to know the core concept of Nebulas–Nebulas Rank, after having seen a technology introduction post from Nebulas in Google’s internal forum. I thought the Nebulas Rank sounds similar to Google’s famous PageRank searching algorithm, which was interesting.” Therefore Duran decided to reach out to the Nebulas team.

Right then Nebulas co-founder Hitters Xu was having a discussion  about innovation of blockchain with Professor Shoucheng Zhang from Danhua Capital at the coffee shop by Stanford University’s golf course. After having listened to their discussion, Duran highly agreed with Nebulas’ technology concepts. The internet is an information network. PageRank algorithm indexes and ranks information, while blockchain  is a value network that can do similar work. Nebulas Rank offered a measuring standard of blockchain’s multi-dimensional values.

Why Join Blockchain?

“When you see a space shuttle, don’t ask what seat you will get, just jump into it.” Duran said , “This is what Google’s early employees all agreed.” It is no surprise that he was amazed by blockchain’s fast development. In less than ten years, the whole digital currency market has already reached multi-billion dollar of worth, earlier this year its value even surpassed Google’s market value.

When hearing Hitters Xu’s speech in Stanford University, Duran was very excited. He could see the opportunities and challenges in blockchain. It was at that time that he decided to go all in on blockchain in the coming five to ten years.

Google and Facebook were both interested in blockchain and have established a dedicated department for this technology. However, for a public chain project, technology, community, and token are all required. Big publicly listed companies, like Google, face a lot of constraints in the newly developed blockchain market and are not flexible enough to get into communities and tokens. They can only get involved from the technology perspective, and therefore they will have a limited scope of success in this new sector.

The seven years spent in Google were more like another college experience for Duran: living condition was self-sufficient there, and it was a purely technology community. “You could just focus on technology and do not worry about anything else in Google. But maybe because I spent too much time there, I felt a little bit of disconnection from outside world” Duran said.

When Duran realized the opportunity was very precious and exciting, he decided that it was time to leave Google.

Idealist Mentality

When talking about the reason why he has joined Nebulas, Duran said that it was because he was convinced by Nebulas’ technology vision.

He expressed his willingness to go into the blockchain industry when he first met Nebulas co-founder Hitters Xu. “Hitters suggested that I should buy some crypto assets first to experiment.” Duran took the advice and bought some cryptocurrencies. He thought that if his thoughts towards blockchain were not correct and that blockchain was not the future, then the financial loss will be considered a lesson learnt. It turned out that in less than a week, the market plummeted, the cryptocurrencies that he had bought lost a significant amount of value.

It was from this moment that Duran started to truly understand blockchain. He started to read white papers and to learn programming in blockchain. He was amazed by its core technology, the spirit of geek, and passionate communities. Blockchain’s true believers do not mind the price fluctuation between digital currency and fiat money. He thinks that based on the current trends, the blockchain industry will become even stronger in the future.

After having talked to Hitters Xu, Duran deeply felt the similar idealist mentality that he shared with Nebulas’ founding team. “As a serial entrepreneur in the blockchain industry, Hitters had financial freedom long time ago. But the whole team still work very hard. This is because they deeply believe in the future of blockchain technology” Duran said.

Therefore he decided to dive into blockchain without hesitation. After joining Nebulas, Duran participated in the architecture design of Nebulas version 1.0 and then led Nebulas Labs to incubate projects in Nebulas ecosystem and extend cooperation among different blockchain ecosystems. Duran has experienced the expansion of the Nebulas team from 10 employees to more than 100 employees. The lifestyle is drastically different from the time at Google, but he never regrets it.

Original Blockchain Interactive Marketing

The main idea of the Atlas Protocol (ATP) project comes from a lot of pain points in the industry that the team has experienced. For a blockchain project team, there is no effective technology platform in the market for marketing and promotion. Traditional Internet advertising channels have closed doors to digital currencies and blockchains. If no one like Atlas Protocol (ATP) does anything now, these ideas will still eventually appear in the future. But as a blockchain visionary, the Atlas Protocol team has spotted the opportunity in advance.

The Nebula Labs, along with the XGoogler Blockchain Alliance (XGBA), were able to put together a team of former Google colleagues to create the Atlas Protocol (ATP) project. As the co-founder of the project, Duran really appreciates the opportunity to create the future with the team. He believes that in the wave of blockchain revolution, there must be a wonderful business model similar to internet search advertisement.

According to Duran, the marketing needs of blockchain projects have to be addressed with blockchain solutions. This is not the same as Internet marketing. And there is no need to impose a blockchain’s mindset on an already existing Internet marketing system. The CPM/CPA of “classical” internet advertising, tracking conversion and ROI model are not directly mapped into the world of blockchain. Because there is a huge difference between the Internet and blockchain usage and applications and there is a big difference between offchain and onchain target users, even if we try to apply Internet principles to blockchain, it will hardly be effective. It is not a zero-sum game and the Atlas Protocol and the current traditional digital marketing market can co-exist.

Some people consider that the current blockchain advertising market is relatively small. Just like 8 years ago, when FreeWheel started making mobile internet advertising video products, it was also widely believed that the iPhone was too expensive, 4G was difficult to get to mainstream, and smartphone application market was too small. Therefore, we should look forward and believe in the future potential of blockchain.

Over the past year, many technology professionals from the top mobile Internet companies have decided to join the blockchain industry and to embrace the changes that the blockchain technology brings to the world. “Investing in cryptocurrencies and getting rich overnight is a very partial interpretation of the blockchain industry. Blockchains rely on technology and algorithms, it is a restructuring of social relations and redistribution of value made possible by technology.” said Duran.

For Google, the evolution of the business model from PageRank algorithm to AdWords and AdSense is natural. Similarly, from the Nebulas Rank to the Atlas Protocol will also be natural. Duran strongly believes that the Atlas Protocol is the future direction of the original blockchain interactive marketing.

“This is also the idealism that we believe. No matter how much turbulence and impatience the industry experiences, we will never forget our original vision.” Duran said at last.

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Crypto Market Adds $20 Billion in 30 Minutes as Bitcoin Spikes Above $7,400

The bitcoin price has surged 10 percent over the past 30 minutes, subsequent to experiencing a substantial spike in its volume.

Within one-hour period, the price of bitcoin, Bitcoin Cash, ether, Ripple, and EOS increased by 6 to 10 percent, as the valuation of the cryptocurrency market surged to $292 billion from $272 billion, by more than $20 billion.

Market Added $20 Billion in 30 Minutes

An unexpected corrective rally occurred in the evening of July 17, pushing the price of major digital assets to spike by large margins. Bitcoin and EOS have been the best performers out of the major cryptocurrencies, rising by nearly 10 percent in a short period of time.

In previous reports, CCN noted that the market has seen the emergence of a series of positive events such as the government of South Korea regulating its cryptocurrency market, which could fuel the next rally of the market.

Optimistic developments in leading cryptocurrency markets including the US, Japan, and South Korea were not reflected by the crypto market over the past two weeks, and the recent bull run may begin to portray the progress the market has seen in terms of regulation, adoption, and general consumer demand.

The last time BTC spiked by a margin as big as today’s rally was April 9, when the price of BTC surged from $6,900 to $8,000, within 30 minutes. Ultimately, the rally from $6,900 to $8,000 led the price of BTC to test $10,000.

If the price of bitcoin surpasses the $8,000 mark, it may be able to replicate the same movement it experienced on April 9, and potentially test the $10,000 support level. However, if bitcoin remains stable in the $7,400 region, bitcoin could try breach major support levels between $8,000 to $9,000 in the upcoming week.

Strong Volume, Momentum Building

The difference between the rally of July 17 and previous false runs throughout June is the volume. Currently, on Binance, the world’s largest cryptocurrency exchange, the volume of bitcoin against Tether (USDT) is $300 million, up from $100 million since July 16. In two days, the volume of bitcoin tripled.

Throughout July, the issue with the crypto market was its low volume, and despite the optimistic momentum indicators and positive signals of the Relative Strength Index (RSI) and momentum average convergence divergence (MACD) of bitcoin, the low volume of the crypto exchange market disallowed a rally from being initiated.

The short-term rally of July 17 was supported with a large spike in volume, complemented by positive events such as the appointment of a new CEO for Goldman Sachs, who has discussed bitcoin on a positive light on multiple occasions.

Previously, David Solomon, the newly appointed Goldman Sachs CEO, admitted for the first time that Goldman Sachs is preparing to launch a proper cryptocurrency trading platform.

He stated:

“We are clearing some futures around Bitcoin, talking about doing some other activities there, but it’s going very cautiously. We’re listening to our clients and trying to help our clients as they’re exploring those things too. Goldman Sachs must evolve its business and adapt to the environment.”

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China Sees 454% Increase in Companies with ‘Blockchain’ in Name

Today’s $1,000 bitcoin price rally aside, the cryptocurrency market might be enduring a bear cycle triggered by vanishing consumer interest, but blockchain, it seems, is still big business — particularly in China.

Citing government data sourced from Chinese-language outlet Qixin, the South China Morning Post reports that, from Jan. 1 to July 16, 3,078 China-based companies have filed to include qukualian, the Chinese word for blockchain, in their names, up from just 555 in all of 2017. In the past calendar year, 16,600 newly-registered firms have included blockchain as part of their business strategy.

That data stands in contrast to the U.S., where just 817 registered firms include the word “blockchain” in their names. Even that figure, though, has drawn comparisons to the dot-com bubble, when companies added “.com” to their names so that investors would perceive them as trendy tech companies. Valuations soared but ultimately collapsed as the 20th century gave way to the 21st.

High-profile examples in the U.S. blockchain industry include Riot Blockchain, a former biotech company, and Long Blockchain, which prior to its crypto rebrand operated under the name Long Island Iced Tea.

These firms quickly turned into “proxy stocks” for the cryptocurrency market, and their stock prices soared in Q4 2017 along with the bitcoin price, as crypto-shy investors sought to gain exposure to the burgeoning industry.

However, these valuations — built entirely on speculation and hype — have plummeted during the recent bear market, outpacing even cryptocurrency prices in their rate of decline.

long blockchain stock price
Source: Bloomberg

Long Blockchain, the ultimate face of the so-called “blockchain bubble,” now finds itself delisted from the Nasdaq Stock Market and relegated to over-the-counter (OTC) trading. Its share price, meanwhile, has declined to $0.38 from a mid-December peak above the $9.00 mark.

As CCN reported, China’s government has passed a number of policies hostile to cryptocurrencies, but it has also embraced blockchain and distributed ledger technology (DLT) as a key focus of its strategy to cement its status as the world’s leading tech center.

Earlier this year, for instance, President Xi Jinping said that blockchain is one of several technologies “substantially reshaping the global economic structure,” and the country’s central bank has devoted significant resources to researching how it can leverage DLT to digitize its national currency.

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Japan Revamps Financial Regulatory Agency to Address Issues in FinTech, Cryptocurrencies

Japan has overhauled its financial regulator, the Financial Services Agency (FSA), in order to better deal with fintech-related fields, including cryptocurrencies, news outlet Nikkei Asian Review reported July 17. Changes were made to various bureaus in order to make the organization more suited to address new problems and challenges in the financial sector.

Starting today, the newly created Strategy Development and Management Bureau, which replaced the Inspection Bureau, will reportedly develop a financial strategy policy and handle issues addressing the digital currencies market, fintech, and money laundering. Additionally, the bureau will be responsible for administrative duties and inspection of financial institutions.

The Policy and Markets Bureau will succeed the Planning and Coordination Bureau, and is tasked with developing a legal framework that addresses the rapid growth of the fintech sector. The Supervision Bureau remained unchanged. 

The FSA has initiated enforcement actions against several crypto exchanges this year. In March, the agency sent “punishment notices” to seven crypto exchanges and temporarily halted the activities of two more after a round of inspections. Last month, the FSA issued business improvement notices to five registered exchanges, alleging that the exchanges lacked proper internal management systems, including anti-money laundering measures.

Earlier this month, the FSA announced it was considering changing the legal framework for regulation of cryptocurrency exchanges. The FSA was planning to regulate crypto exchanges via the Financial Instruments and Exchange Act (FIEA), instead of its legal foundation, the Payment Services Act. This reportedly means that exchanges will have stronger customer protections. The FIEA obliges securities companies to manage customer funds and securities, such as stocks, separately from corporate assets.

In June, Japan’s Minister of Finance Senator Fujimaki asked Deputy Prime Minister Taro Aso whether crypto transactions should be taxed via a “separate settlement taxation,” rather than their current classification as “miscellaneous income.” Aso said the prospect was “doubtful” citing concern over the public’s reaction due to “tax fairness.” Changing the tax scheme would bring the current tax rate for crypto transactions from a maximum of 55 percent to a 20 percent flat tax similar to stocks or forex trades.

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Concern Mounts Over Potential Crypto Exchange WEX Exit Scam

Users are increasingly concerned that an exchange claiming to be based in Singapore is pulling an exit scam following suspicious trading activity and locked wallets that are now preventing all users from withdrawing funds.

On July 11, CCN reported that BTC/USD was trading on the WEX exchange at over $9,000 despite the global market average being under $6,400. After spiking to $9,000 the Bitcoin reportedly traded steadily at $8,000 – over $1,600 more than the global price. USDT/USD also revealed strange anomalies with the stablecoin pegged 1:1 to the price of the US dollar trading at $1.30 on WEX.

While the opportunity to buy Bitcoin at a separate exchange and attempt to sell it for profit on WEX was likely tempting to many, there was concern that the trading price may have been deliberately manipulated to draw users into the exchange for an exit scam.

Those urging users to avoid the exchange and its inflated prices seem to have offered sage advice as WEX has now locked wallet withdrawals, citing necessary maintenance. However, while withdrawals are locked until July 22, users can still deposit funds to the site which raises questions over the nature of the alleged maintenance.

An unofficial subreddit for the exchange cites multiple examples over the last few months of users claiming that the exchange has taken their funds and ignored all support tickets, something also repeatedly claimed by exchange users on Twitter.

WEX is a rebranded version of the BTC-e exchange which was shut down in connection to a multi-billion dollar money laundering operation with a Russian national named Alexander Vinnik reportedly charged in connection with the criminal operation.

Singapore business records indicate that the exchange is officially owned by one Dmitry Vasiliev, but he recently claimed to have lost control of the exchange and was unable to clarify exactly who was in charge.

RBK reports that a former Soviet militiaman called Dmitry Khavchenko was plannning on buying the exchange – Khavchenko is a Ukranian militia member with the callsign ‘Sailor’ and fought in Crimea to support the Russian annexation in 2014, seen in this video armed with a machine gun handing over to authorities the flight recorders from the Malaysian Flight 17 jet that was shot down over Ukraine in 2014 killing 283 passengers and 15 crew.

“There will be no more secret owners. I decided to become a cryptomillionaire,” Khavchenko told RBK, going on to state that he intended to transfer the company headquarters to Crimea and register the company in wartorn Donbass, Ukraine. The Russian media outlet also reports that people connected to Konstantin Malofeev are becoming involved in the management of the crypto exchange. Malofeev is a Russian businessman under criminal investigation and sanctions for allegedly financing illegal militant groups in Donbass in 2014.

WEX has not responded publicly to claims that an exit scam is taking place, nor have staff assured users that their funds are safe.

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Stellar Becomes First Crypto Protocol to Obtain Sharia Certification

Stellar, the seventh-largest cryptocurrency network, has become the first digital ledger technology (DLT) protocol to obtain Sharia certification for payments and asset tokenization.

The Stellar Development Foundation announced on Tuesday that, following a review of the technology’s properties and applications, the Shariyah Review Bureau (SRB) had certified Stellar as a Sharia-compliant vehicle for conducting monetary transfers and tokenizing real-world assets.

According to the foundation, this certification from SRB — which is licensed by the Central Bank of Bahrain and operates an international Sharia consulting practice — will enable Stellar to forge partnerships with Islamic financial institutions throughout the Middle East and Southeast Asia.

From the announcement:

“In partnership with SRB, this certification will help grow the Stellar ecosystem in regions where financial services require compliance with Islamic financing principles. For example, Islamic financial institutions in the Gulf Collaboration Council (i.e. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE) and parts of Southeast Asia (e.g. Indonesia and Malaysia) will now be able to integrate Stellar technology in their Sharia-compliant product and service offerings.”

The SRB laid out its justification for awarding Stellar a Sharia certification in a 16-page document, which measured the cryptocurrency and its applications against standards published by the non-profit Accounting and Auditing Organizations for Islamic Financial Institutions (AAOIFI).

The SRB concluded:

“Based on provided information, SRB conducted its review on the Network’s guides, concepts and related material and did not find any provisions that are non-congruent to the principles of Shari’a. However, the users of the Network seeking to attain Shari’a compliance should take note that merely following the attached guidelines does not automatically ensure compliance to Shari’a.”

Cryptocurrency has long been a topic of debate among Islamic scholars, as some have questioned whether the asset class’ pervasive price volatility makes trading tantamount to usury, which is forbidden under Sharia law.

Earlier this year, however, Islamic scholar Mufti Muhammad Abu Bakar, a Sharia compliance officer at Jakarta-based investment firm Blossom Finance, published a paper arguing that bitcoin is Halal (permitted) for investors since it is recognized as a legal currency in some countries and widely accepted for payment in others.

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World's First Bank-Backed Crypto Exchange Finally Opens to the Public

The world’s first bank-backed cryptocurrency exchange is now open to the public after months of delays.

Japanese financial giant SBI Holdings formally launched its in-house crypto trading platform, dubbed VCTRADE, last month. Yet, as reported by CoinDesk at the time, the trading service was only available for a group of selected users who pre-registered with the platform last October.

In an announcement released on Tuesday, SBI Holdings said the service is now fully open for users aged from 20–70 who reside in Japan. However, a registration service for corporate customers has not yet been made available.

At its June launch, VCTRADE announced it will initially support trading of Japanese yen against XRP, the native token of the Ripple protocol – a move that aligns with the institution’s wider support for XRP in cross-border blockchain settlement.

Subsequently, the platform added yen-based trading pairs for bitcoin cash and bitcoin on June 8 and 15, respectively.

Today’s public launch comes nearly two years after SBI Holdings first announced it would build the exchange in October 2016, with the platform receiving an operating license from Japan’s financial watchdog, the Financial Services Agency, late last year.

Its debut was delayed for months, however, as the firm worked to raise levels of internal security following a massive $533 million hack at the country’s Coincheck exchange in January.

Open sign image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Hong Kong Monetary Authority to Launch Multi-Bank Blockchain Trade Finance Platform

Hong Kong’s de facto central bank will launch its own blockchain trade finance solution with 21 banks in August, Financial Times (FT) reported Sunday, July 15.

The joint venture between the Hong Kong Monetary Authority and Chinese company Ping An Group’s fintech subsidiary OneConnect aims to substantially reduce paperwork, costs security risks for participants, FT reports.

A major aim of the 21-party scheme is to reduce the amount of time and bureaucracy involved in signing up new fledgling businesses to banking services by smoothing over transactions.  

Using blockchain, “some” transactions will process in just one day against up to fourteen days using current methods, as FT reports.

Originally announced in November 2017, the move marks the first example of a regulator “bringing banks together” to improve trade finance, as Ping An deputy chief executive Jessica Tan described it. As Cointelegraph reported in May, a previous trade finance deal from HSBC was a smaller-scale affair, involving an individual bank.

“Instead of individual banks trying to do this you have the regulator trying to bring the banks together,” Tan told FT.

Ping An has already developed blockchain-powered solutions for the Chinese domestic market, and hopes the same technology will see success over the border, according to FT. The company, China’s second-biggest insurer with assets worth 4.7 tln yuan ($704 bln), joined the distributed ledger technology-focussed R3 Consortium in 2016.

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Kodak-Branded Crypto Miner-for-Rent Scheme Fizzles Out

A Kodak-branded Bitcoin (BTC) miner rental scheme will not go ahead as planned, the company’s licensee Spotlite told the BBC July 16.

Spotlite USA is one of many firms that licenses the Kodak brand to put on its own products, such as Kodak LED Lighting. Spotlite USA presented the Kodak-labelled KashMiner on Kodak’s official stand at the CES technology show in Las Vegas in January.

According to Spotlite’s plans, the mining equipment was originally intended to be rented out, with an up-front fee of about $3,400. Customers could then keep a share of mined cryptocurrency. According to Spotlite, the initial fee of $3,400 would result in $375 per month over two years through mining Bitcoin.

While Spotlite’s chief executive Halston Mikail had announced plans to install units at Kodak’s Rochester, New York headquarters, Kodak told BBC that the scheme was never officially licensed.

“While you saw units at CES from our licensee Spotlite, the KashMiner is not a Kodak brand licensed product. Units were not installed at our headquarters.”

The rental scheme was criticized by many as a scam that misled customers about promised profits. Economist Saifedean Ammous said, “There is no way your magical Kodak miner will make the same $375 every month.” Many critics also suggested that the scheme did not take into account the fact that Bitcoin mining is becoming more complicated.

Mikail told the BBC that the U.S. Securities and Exchange Commission (SEC) prevented Spotlite from moving ahead with the miner rental plan. He added that the firm will now privately deploy its mining equipment in Iceland, instead of offering it for rent.

On Jan. 9, Kodak announced plans to launch its own cryptocurrency on the KodakOne platform. KodakOne will allow photographers to register their work, license photographs, and search the internet for unauthorized usage. On Jan. 30, just a day before the initial coin offering (ICO) was set to start, Kodak delayed the launch of the new cryptocurrency, citing the need to evaluate the status of potential investors.

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