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BitGo Enters Cold Storage Crypto Trading

BitGo Enters Cold Storage Crypto Trading

A company which already has enticed both Galaxy Digital Ventures and Goldman Sachs in the past has developed a platform enabling clients to trade cryptocurrency straight from cold storage.

Palo Alto-based crypto storage firm BitGo has announced the new service just days after the hacking of cryptocurrency exchange Cryptopia which saw more than ETH 19,391 (USD 2.4 million) and Centrality tokens worth USD 1.18 million transferred to unknown wallets.

Bitgo has chosen Genesis Global Trading for the service which ensures that customer buy and sell orders will never leave cold storage as SEC and FINRA regulated Genesis hold a cold storage wallet with BitGo. Mike Novogratz, Bitcoin pundit and CEO of Galaxy Digital Holdings Ltd, claims these types of storage solutions could easily promote the next bull run, commenting:

“I think the next move up is going to need custody from a trusting source… It’s going to need a little more regulatory clarity… We wouldn’t take out USD 10,000 without those two things because that’s what brings the institutional investors in. But we’re going to get there.”

BitGo has announced that Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Litecoin, Ripple, and ZCash will all be available under the new system

 

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SEC Cites Cryptocurrency as Top Priority for 2019

SEC Cite Cryptocurrencies Top Priority for 2019

The US Office of Compliance Inspections and Examinations (OCIE) has suggested that 2019 will be a year of great activity on the cryptocurrency front for the Securities and Exchange Commission (SEC).

The latest report released by the OCIE says that the SEC will prioritize what it sees as risky crypto products and services, and monitor digital currency markets with more vigilance. Any product classified by the SEC as security will be prone to the usual regulatory compliance. The OCIE further stated that:

“For firms actively engaged in the digital asset market, OCIE will conduct examinations focused on, among other things, portfolio management of digital assets, trading, the safety of client funds and assets, pricing of client portfolios, compliance, and internal controls.”

The SEC has cited the protection of customer rights and the integrity of US capital markets as the main aims of the additional scrutiny being applied to cryptocurrency dealings.

Any tightening of control in the cryptocurrency space by the US regulators will not be favorably greeted by investors who are already unhappy with what most regard as SEC crypto overregulation. The regulator’s anti crypto chairman Jay Clayton has confirmed the aims of the OCIE report, suggesting that digital assets, ICOs, and distributed ledger technologies are an “area where the Commission and staff have spent a significant amount of time” and that this would continue into 2019.

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Coinbase Banning Services to Social Media Group Stirs Up Twitter Again

Coinbase Banning Services to Social Media Group Stirs Twitter Again

Cryptocurrency exchange giant Coinbase has caused a stir on Twitter after excluding social media site Gab and its founder from services.

This is not the first time Coinbase has chosen to single out social network site Gab, having targeted the site in June 2018, closing its account with the San Francisco based company.

Gab launched in August 2016 as a response to censorship controversies involving major social media companies. Founder and CEO Andrew Torba referred to such companies at the time as “the entirely left-leaning Big Social monopoly.”

Although Coinbase gave no explanation for the Gab shutout last June, social commentator Kevin Pham, suggested it might have been in response to a Gab tweet that “crony capitalism” was behind last year’s SEC announcement that Ethereum was not a security.

At the time, Gab’s response to the first ban was “Centralized crypto exchanges/wallets are cancer and contradictory to everything crypto stands for.”

The new ban comes hours after a Gab tweet attacking exchange censorship and extolling the virtues of decentralization. The social network has gained a reputation for allowing expression of views which are controversial with some referring to the social network as “haven for white supremacists”.

I will be withdrawing whatever funds I have left in Coinbase and never using them again.

— ₿itcoin Maximus (@MaximusBitcoin) January 4, 2019

Coinbase has made no comment on its actions against the social media company or its CEO, leaving commentators speculating as to the reason it may have had to penalize a customer, and considering if a curb on freedom of expression is within the remit of a cryptocurrency exchange

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Days Could be Numbered for SEC Role in Crypto

Days Could Be Numbered for SEC Role in Crypto

A new law is under consideration that, if becomes legislation, could see the SEC’s role in cryptocurrency regulation come to an end.

The bill set to be introduced, the Token Taxonomy Act, has been formulated by pro-crypto Republican Warren Davidson and Florida Democrat Darren Soto.

The main point of conflict with the industry is the labeling of certain cryptocurrencies as securities and not as assets, particularly after SEC Chairman Jay Clayton‘s declaration earlier this year that cryptocurrencies and ICOs would be classed as securities by the US financial regulator.

Clayton’s comments were made despite SEC William Hinman commenting in June that both Bitcoin and Ethereum were not securities because their platforms don’t have a controlling body. Davidson commented on the plans to introduce the new bill; one that could potentially remove SEC from the picture, a fact that would be a great Christmas present for many cryptocurrency investors around the US:

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

The Republican crypto trailblazer went on the point out that such as change would have the effect stabilizing the industry and adding further much-needed clarification to investors, many still hanging on decisions to be made by the SEC regarding ICOs and EFTs. He added that a law such as this would ensure that “securities laws would not apply to cryptocurrencies once they become a fully functioning network”.

Last week SEC Senior Adviser for Digital Assets and Innovation Valerie A Szczepanik indicated that in certain circumstances, ICOs may be able to avoid registration requirements.

Speaking in New York at a gathering hosted by the Wall Street Blockchain Alliance, the SEC official has suggested that in certain cases an application doesn’t fit SEC law or regulation “but that it perfectly fits the spirit accomplishing all the goals of investors protection”.

 

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SEC Hints at Flexibility for Crypto Startups Through “No Action” Letter

SEC Hints at Flexibility for Crypto Startups Through

SEC Senior Adviser for Digital Assets and Innovation Valerie A Szczepanik has indicated that in certain circumstances, ICOs may be able to avoid registration requirements.

Speaking in New York at a gathering hosted by the Wall Street Blockchain Alliance, the SEC official has suggested that in certain cases an application doesn’t fit SEC law or regulation “but that it perfectly fits the spirit accomplishing all the goals of investors protection”.

In such cases, a “no-action letter” can be issued to blockchain token projects which recommend no SEC action against the token issuer. Szczepanik explained:

“The letters set forth exactly what the person plans to do or the entity plans to do and if it’s something that the SEC feels comfortable with, we can release a no-action letter for exemptive relief saying “we can recommend no enforcement action”.”

William Hinman, the SEC Director of Corporation Finance maintains that in his view although the Ethereum platform is completely decentralized, it doesn’t currently qualify as a security. New token projects may well have an opportunity to gain SEC registration through the “no action” approach. Szczepanik argues:

“I think that’s a way forward for a lot of people who want to implement some of these things that may not exactly fit in the format of the rules that we want.”

The SEC came under fire in September regarding its current punitive regulations for cryptocurrency, accused again of a lacking a sufficient working knowledge, when a group headed by former Morgan Stanley managing director Caitlin Long and Bitcoin core developer Bryan Bishop, wrote a letter endorsed by prominent experts in the industry.

Referring to the SEC’s current regulations, the letter suggested that bad rules can only serve to damage the burgeoning industry stating:

“Current SEC rules surrounding custody do not reflect the risks inherent in managing digital assets and do not use the technical strengths of the technology. These technical strengths have the potential to lead to a stronger, more robust custody environment.”

The group suggested that the SEC gain insight into the industry by engaging with cryptographic engineers, software developers, Bitcoin exchanges, smart-contract designers, blockchain developers, and existing digital-asset managers.

 

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Law Professor’s Paper Targets US Regulatory Confusion over Crypto

Law Professor's Paper Targets US Regulatory Confusion over Crypto

A professor from the University of Arkansas School of Law has written a paper essentially claiming that US regulators are in a state of confusion over exactly what cryptocurrency is.

The article, entitled ‘U.S. Law: Crypto is Money, Property, a Commodity, and a Security, all at the Same Time’, written by professor Carol Goforth for the Journal of Financial Transformation, has recently been published in the University of Oxford’s Business Law blog.

The article is raising eyebrows as it outlines what many some academics and lawmakers are already thinking across the US, that the SEC really doesn’t know how to proceed over cryptocurrency legislation as the commission can’t really classify it.

Goforth claims that part of the problem which prevents correct legislation is the fact that a broad definition does not cover the requirements of the four entities in US government currently dealing with cryptocurrency. The Internal Revenue Service (IRS) defines cryptocurrency assets as property, the Department of Treasury through its Financial Crimes Enforcement Network (FinCEN) “very much like money”, the Commodity Futures Trading Commission (CFTC) as commodities, while the Securities and Exchange Commission (SEC) lumps cryptocurrency assets into its “securities” basket.

Here lies the problem claims Goforth; this diverse set of contradictory definitions make a broader definition impossible, in fact as she points out cryptocurrencies also have other functions not even covered by these four definitions.

Putting aside these four bodies, jurisdictions of individual US states are also bringing in their own guidelines regarding virtual assets, adding even more uncertainty to an already confused area, claims Goforth. Registering an exchange in New York, for example, will require a different process for completing the same activity in, for example, California.

The professor explains that in view of such a diversity of cryptocurrency functions a monolithic approach to defining and therefore regulating virtual currency should be abandoned to make way for far more nuanced thinking by government agencies; an approach which examines the functionality of the crypto asset along with the requirements of the agency issuing guidelines for its use.

 

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SEC Slams CoinAlpha With $50,000 Fine

SEC Slams CoinAlpha With ,000

The US Securities and Exchange Commission (SEC) has carried out another ICO related sanction, this time against CoinAlpha Advisors LLC, issuing a cease and desist order with an additional fine of USD 50,000 according to a filing published yesterday.

Established in July 2017, CoinAlpha Advisors LLC is a Fund manager registered with the Delaware authorities operating from California. The operators of the business were tasked with the management of the funds of CoinAlpha Falcon LP, a subsidiary of the former which was established later that year.

CoinAlpha’s intention was to raise funds and invest in digital assets on behalf of its investors and share the dividends among shareholders.

The commission’s concern was that unregistered securities were sold in exchange for partnership interests in the activities of the Fund. Apparently, CoinAlpha had never been registered with the Commission in any capacity. The filing reads that “approximately USD 600,000 from 22 investors, residing in at least five U.S. states had been raised within the period of October 2017 and May 2018.

The filing further reveals that the Fund had filed a “Form D Notice of Exempt Offering of Securities with the Commission on November 3, 2017”. However, this was done without “a registration statement with the Commission, and no exemption from registration was available for the securities offering during the Relevant Period,” thereby violating the securities law act preventing unregistered securities to be sold to US citizens.

Although, upon contact by the staff of the SEC, CoinAlpha stopped the offering and refunded investors of the funds including fees it had already collected.

CoinAlpha Advisors filed a Notice of Exempt Offering of Securities with the SEC on Nov. 3, 2017. However, the company was not registered with the SEC; therefore, CoinAlpha Advisors violated the securities law that “prohibits the sale of securities through interstate commerce or the mails unless a registration statement is in effect.”

CoinAlpha has been ordered to pay a “civil money penalty of USD 50,000” to the commission within 10 days.

The SEC continues to hold a tight grip on offenders of the securities act with regards to unregistered crypto-related securities offering, despite working to provide simplified crypto guidelines. This past fiscal year alone, reports reveal that more than 12 ICOs were shut down as a result of the crackdown activities of the commission, with more than USD 3.945 billion have be collected in fines and penalties.

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Malta Halts Operation of Unlicensed Crypto Exchange

Malta Halts the Operation of an Unlicensed Cryptocurrency Exchange Possibly a Scam

Malta Financial Service Authority (MFSA) has issued a cease and desist order yesterday to SolutionsCM Ltd, an unlicensed cryptocurrency exchange serving its populace.

The order as displayed on the regulator’s website specifically addressed the infringement of art. 18 of the Italian Legislative Decree No. 58/1998 which the company was found in violation of.

OriginalCrypto operated by SolutionsCM Ltd is purported to be a cryptocurrency investment brokerage firm where Bitcoin trading services are being offered with leverage options. Other services claimed by the website included trading with “over 200 high-liquidity assets, stocks, commodities, indices, currencies and much more based only on CRYPTO Exchange”.

The platform offers six account types, each of which requires a minimum BTC deposit before the account is activated.

The financial regulator feared that its citizens may be patronizing an unlicensed exchange exposing them to high-level financial risks and issued out the warning message:

“The Commissione Nazionale per le Società e la Borsa (CONSOB) has ordered the following companies to cease infringement of art. 18 of the Italian Legislative Decree No. 58/1998, consisting of the provision of unauthorized investment services and activities to the Italian public performed by SolutionsCM Ltd via the www.originalcrypto.com website.”

Several discrepancies raising red flags, including information on account types in Russian, which translates to: “LIMITED LIABILITY COMPANY “SAMDAR” | Registration date: 13.11.2017 | Legal address: 108841, Moscow, Troitsk, ul. 2nd Scientific, d. 4/2, pom. Vi, com. 3 | OGRN 5177746199791 | TIN 7751116026 | KPP 775101001 | OKVED 46.73 Settlement Account No. 40702810538000154658 in PJSC Sberbank Moscow BIC 044525225 | f / c 30101810400000000225 . Email : support@Originalcrypto.com”.

Earlier this year, ScamBitcoin, a monitoring blog that notifies the public of cryptocurrency-related scam operations, blacklisted the site as a scam. Further analysis revealed unsettling discoveries. Back then, ScamBitcoin documented the Risk Disclosure tag which read:

https://www.scambitcoin.com/wp-content/uploads/2018/02/originalcrypto-footer.jpg

ScamBitoin added: “We could find no evidence to support that Bali Limited Ltd was an actual corporation. The alleged corporate address provided for Bali Limited Ltd does not appear to be a factual physical address and computes to a variance of their disclosed address”.

Now, the footer of the website has changed the location and company, reflecting a change in the corporation’s management, which leaves some questions unanswered, such as whether the corporation, if at all real, had changed ownership and no press release detailing the changes were made known to the public. More so, the current operator’s address still conflicts with the official address provided.

This year only, numerous exchanges have received similar desist orders from different jurisdictions. Bitcoin News reported Texas Securities Board’s sanction on two exchanges, Thailand’s SEC’s warning about Q Exchange.

Malta has always been a crypto friendly area, and one racing to be the first innovative ideal space for companies to establish their blockchain businesses. It has made efforts to grow its fintech infrastructure to accommodate the blockchain technology by providing the first regulatory frameworks for cryptocurrency business, and also through partnerships and memoranda of understanding with cryptocurrency exchanges. Further, Italy seems to be tightening its grip on non-compliant exchanges.

 

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Expect ETFs Tomorrow… or in 20 Years Says SEC’s Crypto Mom

Expect ETFs Tomorrow... or in 20 Years Says SEC's Crypto Mom

Washington’s now named Crypto Mom, SEC Commissioner Hester Peirce, has spoken again on the possibility of Bitcoin Exchange-Traded Funds (ETFs) being given the go-ahead by the country’s financial legislators.

Peirce was meeting with representatives from the Digital Assets Investment Forum in Washington and was asked what the state of play looked like for ETF, seen as the long-awaited impetus for a regeneration of Bitcoin’s fortunes on the market.

“Don’t hold your breath” was the answer they received; perhaps not the one that they wanted to hear, but nonetheless both honest and concise in its delivery. A podcast two weeks ago had given some renewed hope to the market when Peirce assured the cryptocurrency community in Washington that a crypto ETF was “definitely possible”.

The commissioner pointed out then that she saw “significant intellectual capital” being invested by both institutional investors and exchanges towards the development of a Bitcoin ETF, perhaps leaving investors scratching their heads over a chicken or egg quandary. Investors see the issuance of an ETF as the impetus for change, not necessarily the other way round.

Peirce said at the meeting that a crypto EFT wasn’t necessarily imminent and gave some homely advice that people should “not live or die on when a crypto or Bitcoin ETF gets approved” referring to the SEC’s historical conservatism prone to being  “a little slow with innovations”.

Although her 20-year threat was clearly tongue in cheek, as were references to investors waking up to a complete change in stance by the SEC, the timbre of her comments were clear; a crypto ETF is not imminent. Another, more weighted and slightly cryptic, comment from the same meeting was sure to get news desks busy with their own interpretations:

“Be careful what you ask for. Never underestimate the ability of regulators to think up regulation requirements you have to follow that you never thought of.”

An ominous portent of the future from Crypto Mom, or is she simply teasing?

 

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Nasdaq Bitcoin Futures Confirmed

Nasdaq Bitcoin Futures Confirmed

Just last week, Bitcoin News reported Bloomberg’s findings on the world’s second largest stock exchange’s plan on moving forward with Bitcoin futures listing. This week, Nasdaq has cleared the air of all speculation by confirming this.

UK news outlet Express heard it from the horse’s mouth yesterday that Nasdaq would definitely be launching its Bitcoin futures within the first half of next year. This was obtained from two credible inside sources from within the organization.

Vice president of Nasdaq’s media team Joseph Christinat told an Express point man: “Bitcoin Futures will be listed and it should launch in the first half of next year – we’re just waiting for the go-ahead from the CFTC but there’s been enough work put into this to make that academic.”

Christinat added, “We’ve seen plenty of speculation and rumors about what we might be doing, but no one has thought to come to us and ask if we can confirm it, so, here you go – we’re doing this, and it’s happening.”

The current market trends might just be in need of a good news as this, in particular, is of more interest to institutional investors. However, this has a way of rippling into other mainstream financial affairs. The most likely of all institutions to feel the most impact would be traditional banking institutions, as the move will enlighten them on the serious roles cryptocurrency has in the future of finance. More so, it may be a step closer to legitimizing the market.

From Joseph’s statement, it would seem that they are no strangers to the development of both the blockchain technology and the cryptocurrency market, as he does emphasize on the efforts of the exchange toward engaging with the new venture.

“We got into the blockchain game five years ago, and when the technology first popped up we just leaned out of the window and shouted “hey come over here” right at it.”

However, the most assuring is that the exchange has spent so much on achieving this milestone:

“We’ve put a hell of a lot of money and energy into delivering the ability to do this and we’ve been all over it for a long time – way before the market went into turmoil, and that will not affect the timing of this in any way. No. Period. We’re doing this no matter what.”

Right now, all that’s left for the exchange is the final confirmation from the CFTC. This would also be the case with other players who are currently looking to launch their Bitcoin futures too. In the case of VanEck partnering with SolidX for a physically-backed Bitcoin exchange-traded fund (ETF), they are simply waiting on the US Securities and Exchange Commission (SEC) for approval.

 

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