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No Money Left, QuadrigaCX Tells Creditors At Supreme Court Hearing

No Money Left, QuadrigaCX Tells Creditors At Supreme Court Hearing

The Nova Scotia Supreme Court hearing has heard QuadrigaCX creditors pleas for reimbursement of funds following the death of the exchange’s founder, but the coffers are reportedly empty.

The Halifax courtroom was told that the USD 70 million in cash and USD 190 million in Bitcoins and other digital assets could not be repaid to the 115,000 cryptocurrency traders owed funds at this stage as there were no funds available.

QuadrigaCX’s misfortune began when the founder and CEO 30-year-old Gerald Cotten died in early December 2018, but the exchange waited until early January to announce his passing. Funds locked in cold storage amounted to 26,488.59834 Bitcoins; 11,378.79082 Bitcoin Cash, 11,149.74262 Bitcoin Cash SV, 35,230.42779 Bitcoin Gold; 199,888.408 Litecoins; and 429,922.0131 Ether at the time of Cotten’s death.

As a result, USD 190 million in missing cryptocurrency is locked in offline digital wallets, but because Cotten was the only person with access to the encrypted passcodes, the funds are inaccessible. With the suggestion that the creditor lawyers’ fees should be capped at USD 100,000, payable by QuadrigaCX, the company’s lawyer was forced to admit, “As of today, we don’t have anything.”

He later claimed the money was to be made available by Cotten’s widow, Jennifer Robertson.

Three teams of lawyers from separate law firms based in Nova Scotia and Toronto have been selected to represent the creditors. Bennett Jones of Toronto and Halifax-based McInnes Cooper have already signed up 181 users who are owed about USD 22 million. McInnes Cooper lawyer Benjamin Durnford said one of the key roles of counsel will be communicating with affected users scattered around the world. Avoiding innuendo on Reddit, where anonymous participants often trade in rumor, would be an issue, he argued.

Meanwhile, Toronto-based Osler, Hoskin & Harcourt and Halifax-based Patterson Law representing 134 affected users owed about USD 19 million told the judge that one of its lawyers was luckily a cryptocurrency expert: “We don’t need to familiarize ourselves with cryptocurrency… We already have that.”

 

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Ledger: Market Still Here for Hardware Wallets

Ledger: Market Still Here for Hardware Wallets

Eric Larchevêque, CEO of French hardware wallet manufacturer Ledger, has said that he is optimistic for the future of the cryptocurrency industry, as he prepares for “a whole new generation of consumers”.

However, Larchevêque claims that education is still an area of concern when it comes to storage of cryptocurrencies, and many users fall short of protecting their funds adequately. Referring to the Cryptopia hack and various other losses in 2018 which amounted to almost USD 1 billion, Ledger’s CEO believes that people still don’t know how to protect their funds.

Speaking about the current volatile situation on the streets of some of France’s major cities in protest of current government moves to regulate industry working guidelines, Larchevêque said that the media had really hyped up the Bitcoin factor:

“I think that this call to take the money out of the banks and the protester with the ‘Buy Bitcoin’ sign is something that’s been exaggerated a lot by the media… The yellow vests do not really know about Bitcoin and they do not really think that cryptocurrency will solve their problems.”

He says that France is still not at the forefront of cryptocurrency adoption but government regulations are at least moving in the right direction. As for his own company, he admits that the bear market has impacted on product sales, but due to the cyclic history of cryptocurrency the company has simply scaled down ahead of the next bull market.

Given that Black Friday sales of the Nano S in November 2018 were almost on a par with 2017, the CEO admits that “the situation is still quite good”. He adds, “There is still a need for a new generation of hardware wallet and consumers are still ready to invest and buy new products. The market is still here.”

 

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Bitcoin Needs Better Image for Mass Adoption

Bitcoin Needs Better Image for Mass Adoption

Cryptocurrency analysts have spoken out about why they feel that Bitcoin needs an image change before it can become accepted by the masses as a viable alternative to fiat currency.

Most experts cite the same three factors which continue to hold back Bitcoin in its charge to become the people’s currency; trust, scams, and difficulty of use.

Clement Thibault, Senior Analyst at Investing.com sees trust as the biggest problem: “Most people don’t understand the digital currency and only see Bitcoin’s erratic price movement. A lack of understanding coupled with wild price swings creates a negative environment for adoption.”

High profile hackings around the world and negative news stories often covering the latest scam have not helped Bitcoin’s image either, according to Jeff Ramson, founder and CEO PCG Advisory Group. He says, “Bitcoin’s biggest problem at this point is that the general public unfairly associates it with ICO scams.”

According to Krypti’s Steve Russo, hack thefts that continue to be on the rise and “seem to occur daily” also help magnify fears. Russo believes this to be unnecessary, however, since given the volume of transactions, this activity is still quite infrequent and the technology is still in its infancy in terms of a new universal monetary system.

Thibault cites difficulties in using Bitcoin as a contributing factor to its slow uptake. He claims that for many, it is more complicated than simply holding cash: “You’d need to set up a node, hold your private keys and be entirely responsible for anything that goes wrong. Most people just aren’t ready for this kind of commitment and the comfort of fiat money suits them well, as imperfect as it may be.”

Jean Amiouny, CEO of Shakepay, claims that exchanges need to be easier for people to use which is borne out by a recent LendEDU report which covered virtual currency-related complaints in the CFPB’s Consumer Complaint Database from 2016 to 2018. The report noted a 17,000% spike in crypto-related complaints over the two-year period. 35% of complaints were related to late receipt of funds.

“People need to understand the value of Bitcoin as a truly permissionless and sound money, more than simply as a speculative asset to ‘get rich quick,” he says. “And people need to learn how to take responsibility for the private keys that control their Bitcoin.”

 

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NASA Looks to Blockchain for Air Traffic Management

NASA Looks to Blockchain for Air Traffic Management

The United States National Aeronautics and Space Administration (NASA) is examining the potential of employing a management blockchain to enable secure, private and anonymous communication with air traffic services.

The prototype has already employed Hyperledger and has proven to researchers that this infrastructure would offer rapid deployment at an affordable cost. The paper published by NASA highlights the benefits of the system:

“This framework features certificate authority, smart contract support, and higher-bandwidth communication channels for private information that may be used for secure communication between any specific aircraft and any particular authorized member.”

Another system planned to be launched soon, the Automatic Dependent Surveillance System (ADS-B) which will be mandatory by 2020, has had teething problems. This is mainly due to its susceptibility to third-party spoofing, the reporting of false airport positions, as it publicly broadcasts aircraft positions. NASA researchers have suggested this privacy problem could be overcome by implementing cryptography.

The new Aviation Blockchain Infrastructure (ABI), based on Hyperledger Fabric and smart contracts, would allow control over what data is shared publicly or privately with authorized entities.

NASA has been making blockchain history since its announcement last year that it would fund and co-run a research project utilizing Ethereum blockchain smart contracts in safeguarding deep space travel. That project focused specifically on implementing the technology in improving space communications, ensuring navigations that take place are safer and more efficient. Even earlier in 2017, NASA awarded a USD 330,000 grant to support the development of a blockchain-based spacecraft system.

In December 2018, development firm Blockstream launched a fifth satellite which now broadcasts the Bitcoin blockchain back to Earth.

 

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Crypto Will Surge in 2019 as People Better Understand Underlying Tech

Crypto Will Surge in 2019 as People Better Understand Underlying Tech

Cryptocurrencies will surge moving forward according to Etoro managing director and cryptocurrency expert Iqbal Gandham. He is convinced that a greater understanding of cryptocurrency’s underlying technology will create a rally in Bitcoin and other digital currencies this year.

Speaking on Sky News, Gandham still feels that “Bitcoin is the so-called ‘daddy’ of the crypto-asset market”, adding, “It is just as other companies are dragged down by stocks performing in the FTSE 100, whether they are positive or negative, people look at Bitcoin as a bit of an index“.

Gandham suggested that the 2018 80% decline in the value of Bitcoin from USD 20,000 to USD 4,000 is insignificant movement and belies the fact that development in the industry is surging. He said:

“If you have a look at the amount of developers and the development happening in the underlying blockchain technology and also Bitcoin, it is increasing. It hasn’t declined… if people understand the technology rather than just view the price point – they will understand that this is not something that is just going to go away.”

Misha Libman, co-founder of blockchain art laboratory Snark.art, said any attempts to predict the value of Bitcoin was futile and basically a waste of time commenting:

“Every morning I wake up reading about the rise and decline of crypto and I am fascinated by the incredibly technical and visually sophisticated graphs predicting its future that borderline an art project.”

Libman’s view is that blockchain and cryptocurrency are the future, but there will be forces beyond Bitcoin that create its fluctuation price volatility; factors that have no real connection with cryptocurrencies place in the future of financial markets. He argues:

“Ultimately we are dealing with a new technology and new asset that is highly speculative, illiquid, and elusive, and drivers for its rise and fall is anyone’s guess and can be attributed by the media… the rollercoaster volatility that we are seeing today is something we are going to have to live with for a while until we will start using crypto to buy chewing gum.”

 

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Two Influential Authors Expose Subscribers to Bitcoin

Two Influential Authors Expose Subscribers to Bitcoin

The exposure of bitcoin and altcoins as alternate means of transfer of value is spreading like a wildfire, still, the adoption rate is quite incomparable to the level of awareness. Two influential authors have taken a rather unconventional route – being outside the cryptocurrency space to exploring the subject of Bitcoin.

Tony Robbins, an influential life coach and author of bestselling ‘Awaken the giant within’ – sold over 2 million copies – recently took to Twitter and directed his 3 million+ followers to an article written by Team Tony describing Bitcoin in a simple language for the layperson to grasp. The article was written when bitcoin was USD 9,979 and from the tweet, a few have engaged showing conversance with the subject.

Indeed, according to the article, “trying to explain bitcoin is like trying to explain the Internet to someone in the 80s,” this has become a common analogy to establish a baseline reference for the nascent technology behind bitcoin – blockchain. However, the article did a good job explaining what the technology is all about and how the cryptocurrency functions as a decentralized currency and “like other currencies and commodities,” its usage are relative to supply, demand and perceived value.

Another prominent influencer, author and professor at the University of Toronto Jordan B. Peterson, a clinical psychologist who sold over 2 million copies of his latest book ‘12 Rules for Life’, recently included a bitcoin address to his website for donation purposes.

Peterson’s experience stemmed from the fact that “MC/Visa/PayPal/Patreon [are] transforming themselves into censors?” He began looking for alternatives to subscription content service Patreon after a recent incident involving a ban without prior warning to a video creator with over 800,000 subscribers. He, having over 1.7 million subscribers on YouTube decided to source for alternative crowdfunding solutions.

These eye-opening events are a few of the countless Bitcoin and cryptocurrency exposures happening around the globe daily. More people are finding their way to the subject of the decentralized economy and asset handling.

Remarkably, a sum total of about 4 million subscribers from these two influential authors alone would have been exposed to the subject at some point and would begin considering the reality of a decentralized economy – that is for those not already onboard.

With 2018 being a very bearish year for cryptocurrencies, many thought it was an opportunity for sifting crypto-projects, and further expect 2019 to be a year of more solid blockchain infrastructures and the influx of institutional investors

 

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US Crypto Tax Liability Confusion Prompts Specialized Software Use

tax, income tax

Cryptocurrency users are beginning to realize that no matter which part of the world they call home, the taxman has woken up to the fact that there is government revenue to be harvested from these digital assets.

Many countries are beginning to revise tax laws to incorporate cryptocurrency profits into end-of-year declarations. This is a time of confusion for many in the US as a lot of crypto dabblers and more serious investors are still not clear on how to go about filing tax returns which include cryptocurrency assets.

Local regulations may well differ, and for some making these calculations is best left to professionals. Node 40 is a company that has now moved to offer this support after seeing a gap in the market. Described as a QuickBooks for blockchain tokens, Perry Woodin’s and Sean Ryan’s company quickly realized that Node 40 was capable of filling what still amounts to an education gap in most people’s understanding of cryptocurrencies; how does one pay tax on them, and does one really need to? Although there might be confusion, regrettably there is no escape.

Node 40 software allows users to integrate their wallets and cryptocurrency exchanges used by them over the course of the tax year to calculate what needs to be reported.  Woodin and Ryan argue it is worth knowing what is declarable to avoid strife further down the track, caused by a simple lack of the basic facts.

“If people are transacting in digital currency, it’s important that anyone understands that there’s a tax obligation on their part. Whether they’re paying their taxes or whether they’re day traders trying to make it big in the crypto world – it doesn’t matter. Any time you’re interacting with digital currency, it’s important that people understand there is a tax liability.”

Converting Bitcoin to goods or services or exchanging BTC to other cryptocurrencies could incur a tax.  This is useful information with the IRS on the warpath, having warned of a coup this year. The main problem in filing a 2018 1099-K form according to Woodin and Ryan is for those that have made significant losses due to fall in cryptocurrency prices, they will need to balance declaring such losses to write off a tax liability with the risk of drawing annual scrutiny by the IRS, “…giving the tax authorities much better visibility of people’s crypto involvement.”

The state of Ohio’s announcement that it will now accept Bitcoin as well as fiat for payment of taxes has its own problems, according to Ryan, as it creates a federally taxable event for the user, who then has to consider whether they are saving enough in fees paying in Bitcoin to offset the obligations that might be created federally.

Woodin and Ryan maintain the IRS will get sharper as they adapt emerging technologies requiring their own discrete measures, but people would be a lot happier paying these taxes if they had an easier means to do so, one that cuts through all those complicated numbers, and saves all that confusion.

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Cambridge Global Crypto Benchmarking Examines Bitcoin State of Play

Cambridge Global Crypto Benchmarking Examines Bitcoin State of Play

University of Cambridge Judge Business School has published the second of its annual reports which examine the cryptoconomy.

It’s been a huge year following the first report, with Bitcoin reaching such grand heights offering a pre- Christmas surprise for 2017 investors, to the travails of pre-Christmas 2018, which has investors not knowing whether to hold or sell.

The comprehensive 96-page report, which examines, among other subjects, cryptocurrency mining, exchanges, storage, and payments, may make sobering reading for enthusiasts and more active traders this Christmas as the picture it paints is certainly “real”, allowing no space for the hype which often surrounds cryptocurrency. The 2nd  Global Cryptoasset Benchmarking Study, as it’s been named, has some positive historical facts for investors in its pages but also has warnings for those entering the space, as well as facts that would be welcomed by industry professionals.

Less encouraging perhaps is the fact that around two-thirds of specialized custodial exchanges do not have a refund procedure in the case of customer funds getting lost or stolen; a message that might not be so warmly appreciated. More encouragingly, it has been estimated that crypto businesses are improving and doing a solid job of asset storage with over 80% of funds now being held in cold storage, out of sight and protected from hackers.

The report also revealed that 80% of crypto firms have become cagey when it comes to divulging the results of security audits; not good news for investors who would like to know exactly how companies entrusted with their assets actually operate.

This is not the first of such in-depth reports by a major university, or by academics, which examines cryptocurrency, and the development of its support infrastructure, to have been conducted, although most current research is focused on DLT.

Many universities now run courses, up to a Masters degree, on the subject of cryptocurrency and associated technology.

Judge Business School is a provider of management education and is consistently ranked as one of the world’s top business schools, with the Cambridge MBA program ranked among the top in the world by Bloomberg, the Financial Times, Business Insider, US News & World Report and Forbes Magazine.

 

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Macron’s Got Problems but Blockchain Ain’t One

Macron's Got Problems but Blockchain Ain't One

French President Emmanuel Macron is seeing his popularity wane by the day due to his planned reforms for business and industry but new technologies appear to be flourishing under the current government, regardless of current discontentment.

Blockchain, in particular, has been earmarked and the latest news of IBM’s new initiatives and investments which should bring 1,800 jobs to France won’t hurt either. Nor will IBM’s new French project with P-TECH to support the disadvantages in finding work. In fact, France is on the crest of a blockchain wave currently, despite Macron’s reforms being soundly rejected. With overturned cars burning in Paris streets it seems hard to imagine that French politicians have got anything right under the current regime.

Perhaps a hint of this shifting focus towards new technologies by a Macron government was the dabbling with taxation this year, with the government finally settling on dropping the tax on cryptocurrency to 17%… for the time being. Clearly, the government doesn’t want to stifle an industry which it is now openly promoting, suggesting that it should now benefit from an EUR 500 million  state handout.

Member of the National Assembly, Laure de La Raudière, is one of those calling for the money, who sees efficiency as an end product arguing that government should follow private industry’s lead using DLT. She says: “I draw the alarm: it’s time to invest. There are not yet established positions in the world.”

She also cited the certification of diplomas or administrative documents as potential use cases. France’s Prime Minister Édouard Philippe is another sold on blockchain although taking some criticism on the subject of allowing Bitcoin to be dispersed in tabacs around France via a ticketing system. In other areas, he’s on safer ground:

“Take the example of agribusiness. To have an interesting blockchain in terms of traceability and food security, it is necessary to bring together distributors, producers, logisticians, the industrialists… And do not let only one actor manage the network as Carrefour or Casino can do today.”

Carrefour was the first to set the blockchain clock ticking with its produce monitoring program being introduced into some of its supermarkets earlier this year, a move recently followed in Spain.

The multi-party suggestion that France should receive massive financial banking to promote blockchain has occurred according to De la Raudière because she believes that she is not alone in wanting to see France as a leader rather than a follower in Europe. She argues, “France must have a conquering philosophy on the subject with the State in the first place, both as a user and federator of projects.”

Other suggestions coming from the recent parliamentary report highlight a call for the opening of bank accounts for blockchain-centered businesses which must register with the Autorité des Marchés Financiers (AMF), the French stock market regulator.

 

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Enrolment Race Pushes Business Schools to Update Crypto Curricula

Enrolment Race Pressures Business Schools to Update Crypto Curricula

Recent reports indicate that rather than course numbers dropping due to a market down, the numbers of potential new entrants into the cryptocurrency space from other sectors are swelling. With top blockchain developers in the US pulling down salaries above USD 250,000, it is hardly surprising that the recent cryptocurrency bear market has done little to deter those considering entering the industry.

For many, the main route into the burgeoning fintech space has now become via a growing range of courses being offered by major universities and business schools around the world.

Courses are now on offer from far and wide whether it be in the Scottish Highlands, Ivy League Cornell and Stanford in New England or in sunny Cyprus. For those wanting a cultural slant on life for a short period, Saint Petersburg’s State University of Economics and Moscow’s Institute of Physics and Technology (MIPT) also both run blockchain technology courses. However, there is already a waiting list.

Professor David Yermack from NYC Stern School of Business came early to the university’s MBA program for blockchain and cryptocurrency education. His class has already doubled over the past year and as a result, he has had to move his lectures to a larger auditorium to cater for the swelling numbers at Stern.

The prestigious New York University first established its School of Accounts and Finance in 1900; Stern is one of the oldest and most prestigious business schools in the world. It is also a founding member of the Association to Advance Collegiate Schools of Business.

A notable factor of the current surge to find a place on blockchain and cryptocurrency course is not the just amount of courses becoming available but the way in which some of the world’s most prestigious educational institutions have led the march towards fintech education. A recent Coinbase survey revealed that 42% of the world’s top 50 universities offer at least one course relating to blockchain or cryptocurrencies.

Some 22% of the universities offered more than one course, with Stanford listing ten classes and Cornell nine. The National University of Singapore ranked highest of the non-US universities with five blockchain-related courses. The US universities were far more likely to offer related courses than those abroad; just 5 of the 18 non-US institutions offered such classes.

Clearly, Ivy League universities appreciate the credentials of fintech, with Harvard University, the Massachusetts Institute of Technology (MIT), Stanford University, Dartmouth College, and the University of North Carolina (UNC), all making investments from their endowments into at least one crypto fund.

Finding a place at one of these and other universities won’t get easier though, particularly in the light of tech recruitment sites such as Toptal reporting a 700% increase in demand for skilled blockchain developers since the beginning of last year.

 

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