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Boston Startup Joins Atomic Swap Pursuit for Safer Crypto Trades

Boston Startup Joins Atomic Swap Pursuit for Safer Crypto Trades

The Boston Globe has reported on startup Arwen as one of a growing number of firms seeking to make cryptocurrency exchanges more secure by adding a layer of technology that would enable users to convert one currency to another with more safety.

Two Boston companies, Highland and Underscore, helped startup Arwen get started. The new firm was founded by a Boston University computer science professor and her doctoral student. Their plan is to create an extra layer of tech to protect transactions, based on an “atomic swap”.

This would allow users to swap cryptocurrency from different blockchains, without ever needing to hand over their tokens to an exchange as the mediator, as is the case with most traditional centralized exchanges. Effectively, the exchange matches orders but is non-custodial in the sense that users still retain control over their private keys and funds.

A group venture of capital firms and startups in Boston have identified cryptocurrencies as needing further safety standards to make them more safer. One of these firms, Castle Island Ventures, raised USD 30 million to work on the projects. Castle Island has already invested in six startup companies, other local firms like General Catalyst, First Star Ventures, Highland Capital Partners, and Underscore VC.

“The reason we launched the fund is we think a lot of these cryptocurrencies will be investible assets,” Castle Island Ventures founder Matthew Wash commented. “It’s bordering on a joke how immature the infrastructure is — and how dangerous it is… Every time I see one of these exchanges get hacked, or the founder take off with money in some kind of scam, it’s another reminder of how immature this industry is.”

““We’re in the early days,” says Arwen CEO Sharon Goldberg. “But let’s go back to 1999 and using credit cards on the Internet. Nobody wanted to put their credit card number into a website. But you do today, because you trust the encryption. You see that little lock in your browser.”

Goldberg points out the irony of using centralized exchanges to trade decentralized currency; adding that trusting software code is one thing, but trusting a centralized exchange is something quite different.

Arwen launched a sandbox environment for demonstrating the technology last month, and the company is now talking with prospective customers, mostly outside of the US, such as in Japan where exchanges are looking to improve current crypto technology.

 

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Bear Market Anniversary: How Startups Kept Above Water

Bear Market Anniversary_ How Startups Kept Their Heads Above the Water

The infamous bear market which began in early winter of 2017 – now popularly called the crypto winter – has hit hard on many startups and rendered many projects as wastelands.

Many startups that raised their funding caps later fell short of expectations due to the reduced value of funds collected in crypto and could no longer fulfill their obligations to the development timeline. While some are yet to produce a working prototype and have relied mainly on market situations to remain significant, others kept their funds in fiat and were able to maintain development strides. These are building bridges and establishing quality partnerships relevant to their stay in the industry.

Some startups resolved to layoffs and reorganizations when they could no longer manage allowances and had to cut down on excesses to maintain minimum operations for their project. Consequently, a large number of developers and blockchain experts have been returned to the job pool.

Some companies successfully raised their capital and chose not to get listed on any exchange but rather adopt the ‘BUIDL’ route to salvage whatever little significance the development trend could offer. Moreover, many never raised enough to make it to any trading platform, so it was the perfect excuse to ‘BUIDL’.

In the middle of these occurrences, some startups remained valiant and challenged the bear market head-on. Some shared their experiences and opinions with news outlet Coindesk, and maintained that they were going long with the overall crypto outcome.

For some of them, this was possible only because they were survivors of the previous bear market in 2014 and now understand the terrain better, especially after witnessing the huge spike in the price of bitcoin to sky-high USD 20,000 – a feat many are eager to see again.

“We were expecting an extended downturn as we were around for the last bear market,” Matt Luongo, the project lead of Keep told Coindesk in a response to a ‘crypto winter survey‘.

Another respondent Brayton Williams, a co-founder of Boost VC opined: “This ‘winter’ is 100X better than the 2014/15. People don’t think crypto is going to die. They are all just trying to time for when it comes back. In 2014/15, the conversation was all about if crypto survives at all.”

One peculiar observation in the crypto startup trend is the likelihood that the ecosystem is gradually resembling the initial public offering façade that most have dreaded. “The investment money is returning back to the norm of difficult to obtain. I think the ‘winter’ is greatly exaggerated. We are just back to normal behaviors,” says Williams.

It is important to note that this isn’t the first bear market in the history of crypto. The flagship crypto Bitcoin has seen a fair share of dramatic price fluctuations over the years. Perhaps the reason this particular one has become more noticeably disturbing is the fact that the rate of exposure was greatly facilitated by players from outside the cryptosystem, yet it remains unknown why the gradual shift in paradigm, the interest from institutions, and possibly support from government organizations have had little effect on price movement.

However, some that have done well have advised that ICOs spread their capital across crypto indices or liquidate as much from the funds collected to run development for up to a minimum of two years.

 

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VC Investments Push Swiss Startups to $1.25 Billion Record

VC Investments Push Swiss Startups to .25 Billion Record

This year’s Swiss Venture Capital Report has revealed that Swiss startups are increasingly attracting venture capital investment, with 2018 breaking all records.

The latest report, released by news outlet Startupticker.ch and the Swiss Private Equity and Corporate Finance Association (SECA), points to cryptocurrency companies as being at the forefront of attracting VC investment with Swiss startups receiving almost CHF 1.24 billion (Swiss francs equivalent of USD 1.25 billion) of venture capital during 2018. Much of the investment was aimed at Zug, Switzerland’s appropriately-named Crypto Valley. The figures represent an increase of 32% from 2017 with financing rounds increasing by over 31%. The figures cover venture capital investments of at least CHF 100,000.

The spike in investment has been put down to increased interest in both the ITC and fintech sectors, with new funding for the former almost doubling the previous year’s figures. In 2018, 131 Swiss ICT start-ups amassed CHF 685 million from investors, 55% of the total invested capital, which included the cryptocurrency sector raising 15%, almost CHF 188 million.

The largest amount raised last year was in the crypto sector, with CHF 100 million raised by the Zug-based SEBA Crypto, whose main focus is on combining crypto and traditional banking services. The report found that the geographical distribution of VC investment was clearly Zurich-centered with a significant increase on last years figures. However, Zug, home to some of the world’s leading cryptocurrency companies, and many of Switzerland’s major players, experienced a 143% VC funds increase year-on-year.

Conclusions drawn from the report indicate that with the hype now gone, and with Switzerland now acknowledged a crypto-friendly space, the local cryptocurrency scene is entering a “period of normalization and professionalization”, backed by the government in Bern, which has recently adopted a comprehensive strategy for the development of cryptocurrency in the alpine nation.

 

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Swiss Point to Stablecoins as Next Crypto Innovation

Swiss Point to Stablecoins as Next Crypto Innovation

A computer scientist and economist who co-founded the Bitcoin Association Switzerland, Luzius Meisser, has spoken out about the direction of the cryptocurrency industry, pointing to stablecoins as the next big mover.

Meisser, who is also on the board at brokerage firm Bitcoin Suisse AG, was speaking at the Crypto Finance Conference in St Moritz on 16 January when he said that stablecoins and security tokens would have a significant effect on the ICO market moving forward.

Suggesting that up to now, ICO investors had been little more than donors with very few rights, the impetus is now shifting to consumer protection and that “payment and utility tokens are more or less over”. The direction for the future would be more likely to point toward stablecoins, which are legally considered to be payment or utility tokens rather than securities. Meisser commented:

“Stablecoins are a precondition to enable average companies to bring their equity onto the blockchain, because if they issue bonds or shares they want to do so against US dollars, euros or Swiss francs, because those are the currencies they calculate in, not Bitcoin (BTC) or Ethereum (ETH).”

Meisser reminded the conference that Swiss banks had been reticent towards cryptocurrencies, but clarified some of the alternatives available to the Swiss cryptocurrency community for circumventing the banks. The stablecoin alternative, however, is an ongoing debate globally with both its advocates and its detractors.

Since the Royal Mint in the UK canceled its stablecoin project after a US-based exchange group withdrew their support before the digital token launch last year, questions are continuing to be asked about the lack of institutional support for such projects.

One major concern is that stablecoins generally require the participation of traditional institutions, many of which are not fully convinced by the argument for digital currencies linked to traditional assets, and may be far more prone to withdrawing from token projects without warning as a result.

 

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Crypto Community Happy with Switzerland’s New Industry Friendly President

Switzerland has a new rotating president as its former finance minister Ueli Maurer takes over the helm after overseeing the country’s financial sector for 3 years.

The move is seen as a positive one in the eyes of Switzerland’s burgeoning cryptocurrency community, as Maurer had been at the helm of numerous positive developments in the crypto arena during his role as a finance minister.

As finance minister, Maurer has helped his country’s financial sector adapt to the changing face of the finance, particularly in its adoption of regulations overseeing the cryptocurrency sector; industry-friendly regulations which are much admired by many nations around the world who are also in the process of regulating new financial technologies.

The government’s liberal blockchain regulations are one of the reasons that Switzerland has become a world-class playground for start-ups and successful blockchain enterprises. The Alpine nation’s latest announcement regarding DLT and its increasingly prevalent place in the country’s financial sector is a new strategy for amending current outmoded laws. The strategy also calls for the integration of cryptocurrencies into the heart of Switzerland’s economic plan.

A blockchain task force of blockchain industry stakeholders was formed last year when it became clear that emerging technologies were gaining traction within the Swiss financial economy.

Switzerland’s biggest hurdle, a factor which President Maurer has acknowledged in the past, remains the reluctance of Swiss banks to service cryptocurrency businesses and exchanges, an issue which is still causing concerns in the industry and one that has recently prompted companies to consider moving to more favorable jurisdictions for banking.

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Startups Pay Out $878,000 For Ethical Hackers’ Fixes in 2018

hackers, cryptocurrency, cybersecurity

It has been revealed that cryptocurrency startups paid out over $878,000 in bounty to friendly hackers for solving bugs in 2018.

The so-called ethical hackers were hired due to a variety of vulnerabilities in start-up platforms’ cybersecurity protocols. About 60 percent of the 2018 total was paid out by Block.one, the company behind EOS, with a sum reported to be around $534,500. The EOS token offering originally raised nearly $4 billion.

Cryptocurrency exchange giant Coinbase paid for white hat hacker services, parting with $290,381 in bounties. Tron also paid out $76,200 to tech problem solvers, demonstrating that even some of the larger, more secure companies still remain vulnerable. Altex, a smaller cryptocurrency firm was also bug stricken in August, although the company has not revealed the amount of funds lost. This was suggested to have been due to Monero code base related bug.

In July, SlowMist, a Chinese cybersecurity firm, claimed that an anonymous user managed to double spend 694 Tether (USDT), gaining credit for 694 USDT on an exchange without sending the funds. The founder of the Omni Protocol, which Tether is based on, wrote:

“It appears that what happened here is that an exchange wasn’t checking the valid flag on transactions. They accepted a transaction with valid=false (which they should not have), and then the second “double spend” transaction had valid=true, which they also accepted.”

The need for such support and fixes illustrates the degree to which the cryptocurrency industry still has much work to do to build failsafe protection for startups and cryptocurrency related companies.

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XRP Preferred Christmas Crypto Gift as Coinbase Boss Reflects on Industry Year

XRP, BTC, ETH, Ripple,

A GloBee poll has revealed that most cryptocurrency enthusiasts would rather receive XRP as a gift than BTC.

The as yet incomplete poll is currently testing the popularity of three leading cryptocurrencies to see how they stand up against each other as a yuletide gift. With just a few hours left before the big day, XRP has the edge against its hallmark competitor Bitcoin while only a meager 9% choosing XRM as an ideal gift option.

With 49% of respondents preferring a gift option of Ripple’s coin over 38% of Bitcoin’s Xmas crypto fans, although proving little, does highlight XRPs ever-growing popularity as a safe payment option.

This is clearly a fact not lost on Coinbase’s President Asiff Hirji after recent revelations that Ripple could soon be listing XRP alongside 300 other cryptocurrencies. One thing that Coinbase did clarify upon making the announcement is that not all of the names on its new hit list of favorable currencies will necessarily be listed, but it’s a positive step further for patient Ripple investors who have had to seek out other exchanges in order to carry out transactions, clearly losing Ripple significant business over time.

As the year draws to close, Asiff Hirji has also been speaking to CNBC’s Fast Money on the market’s fortunes in 2018, commenting rather quizzically that sometimes things are never as good as they look and never as bad as they seem.

The Coinbase boss went on to suggest that 2018 had been a significant year for the industry in terms of innovation despite ConsenSys having to lay off employees and Steemit shed 70% of its workforce. This situation has been reflected across the market due to many exchanges having had to deal with much-reduced trading volume and huge investor selloffs.

Asiff was upbeat about the number of new cryptocurrencies entering the market, suggesting that the industry was still in its infancy and a lot of positive elements were due to follow as more currencies emerge.

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Binance CEO Displays Christmas Optimism

Binance CEO Displays Christmas Optimism

The CEO of Binance, the world’s biggest cryptocurrency exchange, has continued with his optimistic slant for the company as the new year approaches.

Terming 2018 as the “year of correction”, Changpeng Zhao is maintaining that current prices are a real boon for investors and this fact along with the increasing volume of DLT applications being produced by developers will push the adoption of cryptocurrencies even further forward in 2019.

Zhao sees worldwide regulation of blockchain cryptocurrency space as a positive claiming that this has been long overdue. He maintains the correct legislation will have the effect of promoting and encouraging the industry rather than slowing down growth.

The company has led from the front ending the year with some major projects., particularly since the launch of its labs program. Binance Labs, the venture wing of the largest cryptocurrency exchange, supports new blockchain startups and cryptocurrency projects through technical assistance and direct investment. Binance describes the project as an initiative to incubate, invest, and empower blockchain and cryptocurrency entrepreneurs, projects, and communities.

The initiative to support early-stage blockchain projects has already yielded results, with right projects emerging from the program.

Zhang has also revealed that Binance Labs will launch new incubator programs in Berlin, Buenos Aires, Lagos, Singapore, and Hong Kong from March 2019, offering the same 10-week course. Regarding the inclusion of Buenos Aires and Lagos, Zhang commented:

“Those two emerging markets have native blockchain and crypto use cases. So we hope to find teams solving local problems like payments, the instability of local currencies, or remittance problems.”

Even today at this late stage of the year, Christmas has been put on hold although clearly represented with Zhang announcing that the Binance Charity Foundation, the exchange’s philanthropic arm, had launched a blockchain powered charity project to support youth in Malta. This project will support terminally ill patients and disadvantaged children in Malta and Gozo.

 

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Hong Kong to Tighten Crypto Laws After Years of Leniency

Hong Kong to Tighten Crypto Laws After Years of Leniency

The Hong Kong Securities and Exchanges Commission (SFC), known for being for the most lenient jurisdiction in the region for cryptocurrency regulation, is to impose tighter laws.

This is a process finding favor around the world currently as financial regulators adjust to cryptocurrency’s now permanent status in the global financial arena. To begin with, the SFC is suggesting a “temporary regulatory sandbox” for companies prior to seeking a license to operate.

Tighter regulation should come as no surprise to the Hong Kong cryptocurrency environment, as the government has warned on more than one occasion over the course of this year that stricter laws are on the way. Under new rules, if an investment fund has 10% or more of its funds in digital assets, it will need to obtain an operating license, providing it is only selling its products to professional investors.

The news of tighter controls on ICOs and exchanges has been greeted with complete approval by the industry as some feel that may not be in the interest of many local cryptocurrency firms. There are many pros and cons in tighter regulatory measures on the Hong Kong crypto scene. Although many consider it essential to safeguard investors and keep a lid on the industry, others believe that the new cryptocurrency laws could be costly and work against crypto firms there.

It could also be expensive, claims Daisuke Yasaku from the Daiwa Institute of Research: “The cost of regulations will be high. The requirements of the SFC initiative may prove too burdensome for some operators.”

A somewhat more carefree approach was taken by an individual investor on Hong Kong streets this weekend when Bitcoin entrepreneur Wong Ching-kit is thought to have been responsible for showering passing public with Hong Kong dollars, purportedly worth millions of US dollars, thrown from a rooftop above Fuk Wa Street.

The SFC is unlikely to be quite so liberal when finalizing Hong Kong’s new cryptocurrency laws. Such windfalls may not be quite as easy to attain with exchanges coming under tighter scrutiny in the new year.

 

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Swiss Report Recommends Flexible Revisions to Blockchain Regulations

Swiss Report Recommends Flexible Revisions to Blockchain Regulations

A new Swiss report on blockchain technology by a federal blockchain/ICO working group has recommended flexible changes to existing regulations that oversee the space in that country.

Regarding cryptocurrency, the report is specifically calling for more clarity for exchanges while safeguarding the current Anti Money Laundering (AML) Act to safeguard the rights of investors. Heinz Tännler, President of the Swiss Blockchain Federation, commented, “Legal implementation now needs to follow on quickly. Switzerland needs this certainty as a base for further development.”

Switzerland is one of the leading lights in the industry and Crypto Valley in the small town of Zug has become a blockchain incubator and driver for numerous blockchain startups.

The report does not recommend a discrete law relating to blockchain but suggests existing civil and financial market laws can still be used to cover the new technology by making relevant adjustments. In this way, a more flexible structure can be created for blockchain-based financial market infrastructures to work with.

A blockchain task force of blockchain industry stakeholders was formed last year when it became clear that emerging technologies were gaining traction within the Swiss financial economy. The task force is also recommending that the highlighted changes in the working group are quickly put into action.

Such is the nature of Switzerland’s enthusiasm for blockchain and cryptocurrency technology, what could have been an investigation into the failings and successes of blockchain became a call for positive action in the hands of the working group comprised of government councilors, councilors of states, and national councilors. The report stated that the idea was to move blockchain further down its successful route:

“The work of our group is geared towards turning that initial spark into a bonfire – for the benefit of Switzerland and of the world.”

Switzerland’s State Secretary Joerg Gasser has opined that standards are now more important than regulation since according to him, fintech has moved beyond the “hype-cycle”. On the horizon, more utility use for blockchain enterprise seems to be developing as well.

 

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