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SEC Announces Second Forum on Crypto and Blockchain

SEC Announces Second Forum on Crypto and Blockchain

The United States’ Securities and Exchange Commission is set to launch its second public forum on cryptocurrency and blockchain on 31 May.

The forum held in conjunction with the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub) has caused the industry to speculate if major changes in regulation are being considered by the regulatory body.

Until now the SEC has bordered on hindering any progress that the cryptocurrency industry’s major institutions and exchanges have fought for in attempting to bring digital currency into mainstream use. This includes delays on exchanges’ ETF approvals which are still waiting for green stamping and a lack of clear guidelines for the industry as a whole.

On a positive note, it’s thought that the fact the forum is open to the public and follows the SEC announcement of a “crypto tour” to engage with industry professionals, shows that the regulators are moving towards dealing with some of the growing regulatory issues which until now have been stalled.

One of the SEC’s concerns has been the risk of driving potentially innovative startups overseas in order to seek more relaxed regulations; a reason that the SEC, whilst it has been unclear on rulings and guidelines for the industry, has largely kept a hands-off approach. A change in attitude is clearly emerging over the past year following the SECs fairly intractable view regarding both security and utility tokens in the past. SEC Chairman Jay Clayton recently commented that a cryptocurrency can be sold as a security if it meets the definition of an investment contract after launch, and that the digital asset can later be sold without being defined as an investment.

The forum itself will include a live online broadcast and a panel of industry professionals and academics who are yet to be announced. Topics such as ICOs, crypto platforms, and blockchain will be the main focus of the event.

 

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Coinbase Moves with Cold Storage Trading via Custody Service, OTC Desk

Coinbase Moves with Cold Storage Trading via Custody Service, OTC Desk

US cryptocurrency exchange giant Coinbase has just announced that it plans to combine its custody service with its newly launched over-the-counter (OTC) desk in order to facilitate cold storage trading.

The move is partly a response to requests by Coinbase customers who have been pushing for cold storage trading since the recent launch of the OTC desk, mainly in order to sidestep the additional movement of client funds online before they can be traded.

Coinbase launched its OTC cryptocurrency trading desk at the end of 2018 again reacting to “client demand”, as well as gearing towards broadening its customer base to include more institutional clients. Its cryptocurrency custody was launched in July of 2018 for much the same reason in order to attract large financial organizations to the exchange.

The new cold storage trading facility promises to a route to the future of trading according to Sam McIngvale, the CEO of Coinbase Custody, who sees this as “the defacto way to trade”. However, the newly-announced feature rather follows in the footsteps of blockchain security company BitGo who already launched their own custody trading product earlier this year.

There are those that feel that Coinbase Custody could be far better than BitGo for this simplified trading process, due to its pull on larger institutional clients; a potential client base which has firmly been in the San Francisco-based exchange’s sights for some time. John McAfee is one who has long viewed this client pool as a future crypto industry game changer; long predicted maybe, but as yet still yet to become reality.

Institutional investors are preparing to enter the cryptocurrency market with a vengeance. They are generally long term investors and will be pumping billions into the market. Expect the top ten coins to go through the roof fairly quickly. The bulk of alt coins will soon follow.

— John McAfee (@officialmcafee) May 21, 2018

This won’t stop Coinbase trying though, and cold storage trading is another step down that road.

 

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Mt Gox Founder Guilty of Data Manipulation, No Jail Time

Mt Gox Founder Guilty of Data Manipulation, No Jail Time

Mark Karpeles, former head of the collapsed bitcoin exchange M tGox, at one time the largest Bitcoin intermediary and the world’s leading Bitcoin exchange, has been convicted by a Japanese court.

The Tokyo District Court sentenced Karparles to a suspended jail sentence of two and a half years for date manipulation for his role in the disappearance of 850,000 Bitcoins, but acquitted the French one-time-IT-engineer of the charge of embezzlement.

Mt Gox filed for bankruptcy on 28 February 2014. Some 750,000 of customers’ Bitcoin had been lost along with 100,000 BTC of the exchange’s own funds — at the time equivalent to USD 473 million. Karpeles blamed the loss on internal fraud at the time. Over a year later, he was arrested by Japanese authorities and formally indicted for embezzling customer funds by November.

Japanese prosecutors were looking for a punitive sentence of up to 10 years for Karparles, so clearly the sentence passed down would have been a disappointment to investors affected by the affair. In Karparles’s defence, the District Court judge maintained that business owners often borrow funds without clear accounting, and felt that the ex-owner had every intention of returning the funds. He added that no financial damage had been caused to the company as a result of the missing Bitcoin.

At one stage in the trial which began in 2017, Karpeles apologized to customers but stated:

“I swear to God that I am innocent.”

He claimed that he had found 200,000 bitcoins later in a cold wallet unconnected to the company’s computers. “Most people will not believe what I say. The only solution I have is to actually find the real culprits,” he told reporters at his trial hearing in July 2017.

During his time on bail, Karpeles was active on social media, criticizing Bitcoin, until raising bail of JYP 10 million in 2016, pending trial.

 

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‘The Ascent of Money’ Author Admits He Got Bitcoin Wrong

'The Ascent of Money' Author Admits He Got Bitcoin Wrong

Harvard professor Niall Ferguson, author of currency history book “The Ascent of Money”, has admitted he was wrong amount Bitcoin and blockchain being a “complete delusion”.

His book The Ascent of Money: A Financial History of the World first published in 2008 was adapted as a television documentary for Channel 4 and PBS, winning an International Emmy Award in 2009.  It examines the long history of money, credit, and banking.

The author now admits he should have listened to his teenage son and bought Bitcoin back in 2004 claiming, with the benefit of hindsight, the decision not to invest in the flagship cryptocurrency was the “worst investment decision of his life”, commenting:

“If I had listened to my son, I would have increased the dollar value of my investment by a factor of 45 — or, if you prefer, I’d have made a return on the investment of 4,436%… The moral of the story is clear: when it comes to technology, pay heed to teenagers.”

Ferguson was speaking at The Australian Financial Review Business Summit earlier this month, now freely admitting that he was “wrong to think there was no… use for a form of currency based on blockchain technology”.

The acclaimed author is the latest to endorse Bitcoin and cryptocurrencies after Twitter’s Jack Dorsey, Tesla’s Elon Musk and Apple co-founder Steve Wozniak all praised the technology recently. Twitter founder Dorsey is so convinced that it is still early days for Bitcoin that he committed to putting by USD 10,000 worth of the cryptocurrency by per week.

Tech entrepreneur Musk ranked 21st on the Forbes list of The World’s Most Powerful People, concurs with Dorsey suggesting, “Paper money is going away. And crypto is a far better way to transfer values than a piece of paper, that’s for sure.”

 

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Philadelphia Doesn’t Want Cashless Society Just Yet: New Laws from July

Philadelphia Doesn't Want Cashless Society Just Yet: New Laws from July

The US city of Philadelphia has joined both the states of Massachusetts and New Jersey in the introduction of new laws concerning how cash can be utilized in retail stores.

From July of this year, most Philly retailers are now required to accept cash, as the city cuts down on electronic retailing. The Democrats’ new law is aimed at allowing those residents without credit or debit cars to be able to make easy payments.

The concern amongst some cryptocurrency circles is that this may have a drip down effect on crypto adoption and indeed its continued use in US cities if it becomes a widespread phenomenon. New York City councilman Ritchie Torres told the Wall Street Journal that despite these recent moves he still sees electronic payment as the future and was “not a fad”.

Massachusetts requires all stores to accept cash, while New Jersey has taken a further step by banning cashless stores altogether in an attempt to keep cash in circulation and retain paying cash as a service to those who have no other means of payment.

As Bitcoin News reported this week, retail chain Kroger has axed their Visa credit card payments due to excessive fees. This has somewhat opened the door for other payments apart from cash, such as Bitcoin or other cryptocurrency alternatives, although transfer time still remains an issue. This continues to remain a dilemma for crypto in its efforts to become a natural successor to cash; although many see stable coins offering a payment solution to rival cash in the future.

 

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German Derivatives Exchange Supposedly Considering Crypto Futures Contracts

German Derivatives Exchange Eurex May Launch Crypto Futures Contracts

German-operated derivatives market Eurex is rumored to soon turn on the futures contract faucet, releasing its own set of cryptocurrency derivative contracts. If true, the first wave of contracts will include Bitcoin, Ethereum and Ripple (XRP) coin future contracts.

Citing people familiar with the development, media outlet The Block Crypto said that the exchange is meeting with market making experts with regards to the product.

Though no official comments have been made by the firm, the move, if true, comes as no surprise seeing how it had set its target on the crypto market since 2017. In 2018, a division was set up for crypto assets and distributed ledger technology. During that period, a Deutsche Börse spokesperson reportedly told German-based news media:

“We are thinking about futures, with which private investors and institutional investors can protect existing investments in bitcoin or set for falling prices of the cyber currency.”

More so, while Deutsche Börse acknowledged the fact that they have been in touch with the space for a while now, it had only been in the “ideation and exploration” phase but will need a “centrally steered approach” for a full-scale expression of the technology in their business.

The future of the crypto derivative market continues to take shape as new players are being introduced joining others in the queue for regulatory approval. Bakkt, Seed CX, and ErisX are among those seeking to introduce new settlement types into the US market – the physical Bitcoin settlements – adding variety to already established market place for crypto futures contract offered by pioneers CBOE and CME.

CBOE also wants to launch an Ethereum futures contract and is only waiting for the approval from the regulatory watchdog. So far, net sentiments from the idea of an Ethereum futures contract have been somewhat positive.

A couple of other cryptocurrency exchanges such as BitMex, CoinFloor, and Binance are already marking their space in the advanced cryptocurrency market to suit sophisticated investors. As the industry continues to mature, perhaps the market will take a complete semblance to that of the traditional financial market and may appeal to more mainstream traders and investors. Although regulation may be pivotal to this development, the CFTC has a workaround on how to allow the exchanges self-regulate in line with the stipulated financial laws, as an interim approach before a more constituted legal infrastructure is in place.

Moreover, the major contention lies in the security of services provided – the custody infrastructure and market monitoring instruments – constituting major impediments to the launch of other derivate market classes like the Bitcoin ETF, which has had many of its proposals declined or for many months under review by the Securities and Exchange Commission (SEC).

Nonetheless, it behooves any financial service operator willing to engage in this emerging market class to do a proper groundwork before launching any product into the market. As there are currently a few products, yet only a handful of institutional investors have dipped a foot in the water, although this number may be increasing steadily, still it only proves that a more comprehensive market infrastructure may be the only key to unlock the market for a full-scale adoption by institutions.

 

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Bitmain IPO Dream Sinks Further After 2018 Q3 Earning Reports

Bitmain IPO Dream Sinks Further After 2018 Q3 Earning Reports

According to Coindesk, cryptocurrency mining rig manufacturer Bitmain lost USD 500 million during its Q3 financials due to a prolonged bear market, citing a recent update on its financial results to the Hong Kong Stock Exchange (HKEx).

According to a source, the company fell short of its quarterly earnings by as much as USD 500 million. In a previous report it submitted to the exchange, it reported earnings for the first half of the year as having USD 1 billion as profits.

The company’s portfolio had reportedly dropped in valuation by as much as USD 100 million at the end of the third quarter compared to the beginning of the quarter. Being a major stakeholder in the Bitcoin Cash fork, it held a lot of stake in the asset, however, the market downturn had severely traumatized the price of the asset to as much as a 70% loss. Its other major assets holdings like Bitcoin, Ether, Litecoin, and Dash had lost 39%, 67%, 42.68%, and 64.31% respectively.

Bitmain had filed for an initial public offering (IPO) with HKEx in August 2018 to allow it list its shares with the exchange which may possibly improve its financials. However, the company has experienced many constraints on all sides. On the part of the exchange, it had claimed that the industry is still immature for such a leap, and the resulting earnings report for Bitmain further buttresses its point.

For months, many crypto-related ventures have been up against an uphill battle of weathering the storm stirred by the bearish market of 2018. For the most part of the year, aspirations to return to the all-time high seasons gradually waned, instead, many companies began to adjust. For Bitmain, it had to deal with the internal restructuring that saw a reshuffling of management staff, office closures of subsidiaries, and layoffs of its staff.

The chances of Bitmain’s IPO to gain approval from HKEX gets slimmer with the numerous challenges besetting the mining hardware giant.

 

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Miner’s Jackpot! User Pays $560,000 Premium Fee for ETH 0.17

Miner's Jackpot! A User Pays Premium Fees of 3,990 ETH For 0.17 ETH Transaction

Over half a million dollars (ETH 3,990 worth over USD 590,000) was spent as a transaction fee in sending approximately ETH 0.17 ETH – a mere USD 25 worth as at press time.

The transactions did take place in a series of 5 transfers from a currently unknown wallet address to 3 different wallet addresses, each with exorbitant transaction fees considering the amount of Ether that was being transferred.

The first transaction was a transfer of 0.01ETH, with a fee of 210 ETH;

The second transaction was a transfer of 0.02 ETH with a fee of 420 ETH;

The third transaction was a transfer of 0.1 ETH with a fee of 2,100 ETH;

The fourth transaction was a transfer of 0.02 ETH with a fee of 420 ETH;

The fifth transaction was a transfer of 0.02 ETH with a fee of 840 ETH.  

The blockchain space is conversant with transaction fees peaking at different points in time, much more frequent on the Bitcoin network. Besides, a recent report suggested that Bitcoin transactions are healthy over the network as fees touched 2014 lows again.

Nonetheless, this anomaly doesn’t seem to be a general problem on the Ethereum network as only this account was reportedly affected. Besides, so far, the highest network fees recorded to date on the Ethereum network is USD 5.

While so many blanks are yet to be filled, however, the wallet seems to have had over 17,690 transactions logged as at press time and has been running for close to 3 months. More so, this anomaly occurred only today throughout its history. Could it be a network or software glitch or a developer’s error, probably while executing a program on Ethereum’s mainnet?

It remains to be known what may have caused the abnormal fees sent.

 

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Argentina Goes With Bitcoin to Settle Export Deal

Argentina Goes With Bitcoin To Settle Export Deal

Argentina has made history by recently completing an export deal with South American neighbor Paraguay using Bitcoin as payment.

The export of pesticides and fumigation products has set an example for others in the region, showing that cryptocurrency has the potential to act as a credible form of payment at the international trade level as well as between individual users.

Although a small total in terms of export values, still the move is significant, illustrating the simplicity of the process of paying using a cryptocurrency and then converting to local currency. Argentina utilized Bitex – a Latin American financial service provider that supports Bitcoin payments- to facilitate the deal made under the Esporta Simple programme which facilitates small deals of less than USD 15,000.

This was not the first time Bitex crypto project involved the Argentinean Banco Masventas. Last year, the bank had announced the creation of a SWIFT interbank alternative, using Bitex to provide support for BTC transactions.

Paraguay itself has seen some serious activity on the cryptocurrency front since the end of 2018, following a new partnership with local Bitcoin mining equipment manufacturer Bitfury and Commons Foundation, a South Korean peer-to-peer knowledge commons research firm. The project will see the launch of several mining facilities in Paraguay.

Under the project, a remote area of Paraguay close to the borders of Brazil and Argentina is to develop its own crypto mining subculture, thanks to the world’s largest dam, the Itapúa Hydroelectric Dam – the largest operational hydroelectric energy producer in the world.

It appears Itapúa is finally going to create the regeneration many have been calling for as Paraguay’s government has revealed plans to put into action, the “Golden Goose” – a project which will see the construction of five mining centers on 50 square kilometers near the tourist border town of Ciudad del Este.

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Turning Back the Clock: Investor Pays Almost $20,000 a Bitcoin in Trading Gaffe

Turning Back The Clock: Investor Pays Almost ,000 A Bitcoin In Trading Gaff

Due to a glitch this week, a small Brazilian cryptocurrency exchange turned back the clock selling cryptocurrency at 2017 prices which finally hit USD 19,000 by the end of the day.

The problem was down to a local exchange TemBTC selling to a trader who placed a large market order, which effectively “cleaned” the platform’s thinly-traded order book. Records indicate that Bitcoin was also bought for USD 16,000, USD 13,000, and USD 10,000 before mirroring the 2017 peak rate.

TemBTC’s founder Renato Abreu said that the order was placed by “someone with little knowledge who issued a large market order.” The episode saw the trader pay a price above that of bitcoin’s all-time high on Brazilian exchanges, which was of USD 18,900 in December of 2017.

Luckily for the trader, he was buying a small amount purchasing 0.0047 BTC for 340 Brazilian reals, which at the time was worth about USD 91 rather than its value of less than USD 15 on other local exchanges. At that price, a Bitcoin would have cost the buyer over USD 19,400.

Brazil has experienced a groundswell of interest in cryptocurrency despite the country’s new president, Jair Bolsonaro, recently shutting down an indigenous cryptocurrency project. Bolsonaro’s pledge to open the “black box” of contracts and projects by state-owned economic development bank BNDES and other institutions does not augur well for the country’s indigenous population, who stood to gain from the issue of their own regional cryptocurrency as part of an innovative project to support minorities.

TemBTC, like other exchanges, has gained much encouragement from the rising levels of cryptocurrency trading in Brazil, with their daily trading volume reportedly hitting 2,000 BTC recently. Abreu indicated that the volume increase has been due to the “registration of large players” on the exchange.

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