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The crypto markets are seeing a wave of green, with altcoins posting the strongest gains and Bitcoin close to $10,400.
Sunday, Aug. 18 — Crypto markets are seeing a strong surge of green, with altcoins posting the strongest gains and Bitcoin (BTC) circling the $10,400 mark.
Market visualization. Source: Coin360
After yesterday’s correction, BTC is today up nearly 2%, bringing it to $10,393 by press time.
While still roughly $1,000 short of its price point at the start of its 7-day chart, (Aug. 11), today’s recovery has kept the top coin comfortably above the $10,000 psychological price point. During a brief downturn mid-week on Aug. 15, Bitcoin had dropped as low as $9,700. On the week, Bitcoin remains 9% in the red.
Bitcoin 7-day price chart. Source: Coin360
Top altcoin Ether (ETH) has posted a strong gain of over 7% and is trading around $197 by press time. Having dropped below the $200 mark on Aug. 14, Ether’s fresh gains are now edging it back above this threshold. Losses on the week remain at a stark 7.86%.
Ether 7-day price chart. Source: Coin360
XRP is seeing an even more bullish 10% gain on the day, and is posting a milder 5% loss on its seven-day chart.
Total market capitalization for all cryptocurrencies is at $267,390,988,350 at press time, according to Coin360 data.
In alt development news, the team at NEO revealed they were considering integrating Celer Network’s (CELR) layer-two scaling protocol to improve scalability. If finalized, the prospective integration would see the NEO blockchain benefit from Celer’s solution for faster off-chain transactions for payments as well as generalized off-chain smart contracts.
As the alts spearhead today’s market recovery, the community continues to scrutinize the flows of ill-gotten proceeds from the $2.9 billion crypto investment heist PlusToken. As reported, over $240 million in proceeds were reportedly moved yesterday through four Bitcoin-denominated transactions.
In traditional markets, analysts are anticipating the opening remarks from United States Federal Reserve chief Jerome Powell at the Jackson Hole Economic Policy Symposium this coming Thursday.
Market researcher James Bianco told CNBC today, Aug. 18, that after last week’s turbulence — which saw the 10-year Treasury yield dropping below the 2-year rate for the first time since 2007 — robust action from the Fed would be needed to avoid further negative market trends:
“We could see another plunge in rates. We could see further movement down in yields and the yield curve and more volatility and problems in the markets. He [Powell] should move aggressively,”
Most top performers of the past seven days are consolidating in a range. At what levels do they become an attractive buy? Let’s look at the charts.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, you should conduct your own research when making a decision.
The market data is provided by the HitBTC exchange.
Only a handful of hedge funds have invested large sums of money in the crypto universe. Digital Currency Group, likely the largest, has invested in over 130 crypto-related projects with an average seed round size of $3.24 million. Its subsidiary, Grayscale Investments, which invests directly in cryptocurrencies and digital assets, had $2.7 billion in assets under management according to its Q2 2019 financial report.
According to the 2018 Preqin Global Hedge Fund Report, the size of the hedge fund industry was more than $3.2 trillion. This shows that hedge fund interest in cryptocurrencies is very low compared to other asset classes. Even if a fraction of this money starts to flow into cryptocurrencies, prices can surge.
The physically delivered futures platform Bakkt is scheduled to launch on Sept. 23. Its arrival is expected to increase institutional flow into the asset class. It will be interesting to see whether the launch improves sentiment and provides a much-needed boost to start the next leg of the up-move.
Though Chain Link (Link) only closed marginally in the green, it turned out to be the best performer among major cryptocurrencies in the past seven days. Can it build on its gains if the market recovers or will it also succumb to selling pressure? Let’s analyze the chart.
The LINK/USD pair has been consolidating between $2.0531 and $2.8498 for the past four weeks. This shows that buyers step in to defend $2.0531 and sellers stall the up-move at $2.8498. Trading inside such a tight range can build up energy, which will be released either on a breakout or a breakdown from the range. However, it is difficult to predict which way prices will escape.
If bulls push the price above $2.8498, the pair can retest the lifetime highs. Traders can ride this rally by initiating long positions on a breakout and close (UTC time) above $2.8498. The stop loss for this trade can be kept at $1.95.
Conversely, if the tight range resolves to the downside, bulls might try to hold the price above 20-week EMA, but if this support cracks, the next stop will be at $1.3139, which is the 78.6% Fibonacci retracement of the rally.
UNUS SED LEO (LEO) is the second-best performer of the past seven days. According to its plan to buy and burn LEO tokens using 27% of all accrued margin trading fees, Bitfinex tweeted that it had completed burning of 1750,570 tokens. Can it move up, building on this week’s performance? Let’s find out.
Due to a short trading history, we will analyze the daily chart on the LEO/USD pair. The bears broke below the support of $1.20 on Aug. 16, but could not capitalize on it. Buying at lower levels propelled the price back above $1.20 on Aug. 17. This is a positive sign as it shows that the sentiment is to buy on dips.
The 20-day EMA is flattening out and the RSI has risen to the center, which suggests a balance between buyers and sellers. If bulls can breakout of $1.40, it will increase the probability of a new uptrend that can carry the price to $2. Therefore, traders can initiate long positions on a breakout and close (UTC time) above $1.40 with stops placed at $1.15.
Bitcoin Cash (BCH) turned out to be the third-best performer of the past seven days. Can it build on its strong performance? How does its future look? Let’s analyze the chart.
The BCH/USD pair has been trading inside an ascending channel. The bulls have defended the support line of the channel twice within the past five weeks. This shows that buyers are accumulating the cryptocurrency on dips.
However, if the price fails to sustain the rebound from the support line, it will show a lack of demand at higher levels. The bears will then reverse direction and attempt a breakdown of the neckline of the developing head and shoulders pattern. If the price closes (UTC time) below the neckline, it will complete the bearish pattern, which will be a huge negative.
On the other hand, if bulls push the price above $360, a rally to the resistance line of the channel is likely. Aggressive traders can attempt a trade by initiating a long position if the price sustains above $360 for a day. The first target is $515.35, above which, the pair is likely to pick up momentum. The stop loss for this trade can be kept at $250. As the risk-to-reward ratio is not very attractive, keep the position size at 40% of usual.
Ethereum Classic Labs’ Stevan Lohja believes that if Ethereum Classic (ETC) removes “Ethereum” from its name, it can “rekt” many cryptocurrencies with top market capitalization. Ethereum Classic Labs has started Studio, a program that will support and launch new projects to strengthen the ETC ecosystem.
The ETC/USD pair has been consolidating in a large range of $3.40 to $10 for the past ten months. Both moving averages are trending down marginally and the price has been trading below it for the past five weeks. The RSI has also dipped into the negative zone, which suggests that bears have the advantage in the near term. This increases the possibility of a fall to $3.40.
However, such a consolidation can sometimes be a sign of accumulation by strong hands. Therefore, traders can buy after the price bounces off the support at $3.40. This provides a low-risk buying opportunity that can offer great returns if the pair breaks out of $10. The first target on a break above $10 is $15 and above it $20. Contrary to our expectation, if bears sink the pair below $3.40, it will start a new downtrend, which will be a bearish sign.
Bitcoin SV (BSV) blockchain developer synfonaut has launched a consulting service called Office Hours, which provides an opportunity to connect with experienced Bitcoin SV developers for help on Bitcoin SV projects.
The Bitcoin SV pair has been giving up ground in the past few weeks. The bulls are struggling to sustain the bounce, which shows lack of demand at higher levels. The pair has dipped below the 20-week EMA, which has flattened out and the RSI is also close to the midpoint. This suggests a range-bound action for the next few weeks. Support for the range is at $107 while resistance is at $188.69.
If bears sink the cryptocurrency below $107, the pair will become negative and can drop to $92.933, which is the 78.6% Fibonacci retracement level of the rally. On the other hand, a breakout of $188.69 can propel it toward lifetime highs.
The best place to buy in a range-bound market is close to the support of the range or on a breakout of the range. Until then, we suggest traders remain neutral on the digital currency.
OKB, the native token of the world-leading exchange OKEx has been on a stellar run in 2019. Its rally from lows of $0.5718 to highs of $4.18 has offered a handsome return of 631% to its investors. That has easily outperformed Bitcoin’s 331.8% rally.
OKB’s performance has been supported by strong fundamentals. Hence, the pullbacks have been shallow, which show that investors are not willing to dump their positions and fresh investment enters even on minor dips. This outperformance has taken place even when the altcoin sentiment has been hugely negative.
The OKB Buy-Back & Burn Program is an attractive incentive for the long-term holders of the token. Migration of the token from the ERC-20 protocol to the OKChain mainnet in the future will also be a huge positive.
Following a new plan for OKB supporters, trading fees for VIP users will be determined only by trading volume, unlike the normal user for whom fees will be based on trading volume and OKB holdings.
Currently, OKB’s 24-hour volume is just over $92 million. Will the rally in the token continue or is it ripe for a correction? Let’s analyze the chart to find out.
OKB has formed a higher highs and higher lows pattern since the start of the year, which confirms that it is in an uptrend. When the uptrend is strong, pullbacks are shallow. During its latest pullback, it found support at $2.605, which is just below the 50% retracement of the latest leg of the rally from $1.2616 to $4.18. This is a positive sign and shows strong demand on dips.
The 20-week EMA is sloping up and the 50-week SMA has also started to turn up, which is a positive sign. A breakout of $4.18 will extend the uptrend and can carry the price to the lifetime highs of $6.68.
However, if the bears defend the overhead resistance at $4.18, the cryptocurrency can remain range-bound for a few weeks. It will lose momentum only if it drops and sustains below $2.3764, which is the 61.8% Fibonacci retracement of the recent rally.
*Disclaimer: OKB is a featured cryptocurrency from one of Cointelegraph’s sponsors, and its inclusion did not affect this price analysis.
Market data is provided by the HitBTC exchange.
A delegation of the United States House of Representatives will visit Switzerland on cryptocurrency concerns, with Facebook’s stablecoin Libra being in the focus.
As local weekly news outlet NZZ am Sonntag reported on Aug. 17, a six-member delegation from the House Financial Services Committee is going to meet with Swiss Federal Data Protection and Information Commissioner (FDPIC) Adrian Lobsiger to exchange views about digital currencies.
A spokesperson told NZZ am Sonntag that Libra will be the focal point of the dialogue between the regulator and U.S. lawmakers. The delegation is led by the chairwoman of the House Financial Services Committee, Maxine Waters, who previously requested that Facebook halt Libra’s development until the purported risks it poses could be properly understood.
The visit from U.S. legislators aims to clarify regulatory issues surrounding Libra. In hearings before the House Financial Services Committee in July, some representatives expressed their discomfort with the coin being regulated from Switzerland.
In the hearings, Facebook’s David Marcus assured Representative Bill Huizenga that Facebook had been in touch with the Swiss Financial Market Supervisory Authority.
The head of communications at the FDPIC, Hugo Wyler, subsequently said that Facebook had not contacted the regulator regarding the registration of its cryptocurrency project. The FDPIC then sent a letter to the Libra Association — the stablecoin’s proposed governing body — asking for details about Libra:
“The FDPIC stated in his letter that as he had not received any indication on what personal data may be processed, the Libra Association should inform him of the current status of the project so that he could assess the extent to which his advisory competences and supervisory powers would apply.”
During a hearing before U.S. House of Representatives in mid-July, Marcus fielded questions as to why the company had chosen to register its Libra Association in Switzerland rather than the U.S. “The choice of Switzerland,” Marcus claimed, had “nothing to do with evading regulations or oversight.” Marcus argued that the jurisdiction is an international place conducive to doing business.
Over $240 million in suspected proceeds from crypto exit scheme PlusToken have moved in four Bitcoin transactions.
Over $240 million in proceeds from the alleged crypto scheme PlusToken have reportedly moved through four Bitcoin (BTC) transactions.
Whale Alert — a Twitter account dedicated to reporting large cryptocurrency transactions — posted on Aug. 17 that four transactions totaling 22,923 BTC were likely the proceeds of PlusToken.
The four transactions moved 6,000 BTC, 5,000 BTC, 7,000 BTC and 4,923 BTC. All the transactions took place on Aug. 17. The monitor admits that, while the transactions are likely associated with the purported scheme, they are unconfirmed.
Largest reported exit scam
As Cointelegraph reported in an analysis of the biggest crypto heists, PlusToken could be the largest crypto exit scam, with an estimated loss of around $2.9 billion. PlusToken is said to have fraudulently claimed that it could deliver wallet holders a return on investment between 8% and 16% per month, after depositing $500 in crypto assets.
Cryptocurrency and blockchain forensics company Ciphertrace states that the platform involves several Chinese nationals, the Chinese police and the company’s co-founders — a South Korean man operating under the alias of “Kim Jung Un” and a Russian known only as “Leo.”
Recently a United States District Court issued an emergency freeze to preserve $8 million in assets associated with several entities accused of a fraudulent and unregistered initial coin offering.
New York resident Reginald Middleton and two entities under his management were initially accused by the U.S. Securities and Exchange Commission of raising approximately $14.8 million in a fraudulent ICO.
China’s Shenzhen Special Economic Zone will now support the research and promotion of digital funds and the national cryptocurrency based on the renminbi.
On Aug. 18, the Central Committee of the Communist Party of China outlined the plans for the future development of the Shenzhen Special Economic Zone, including the research and promotion of digital funds and the national cryptocurrency based on the renminbi.
According to Chinese news agency STCN:
“Mutual recognition of fund products. Promote interoperability with Hong Kong and Macao financial markets and mutual recognition of financial (fund) products. In the promotion of the internationalization of the renminbi, we will try first and explore innovative cross-border financial supervision. Supporting innovative applications such as digital money research and mobile payment in Shenzhen.”
Not every digital currency is decentralized
Still, as was explained in the dedicated follow-up article, it will be powered by a two-tier operating system, which will not be fully decentralized. So, according to various analytics, it cannot be called a true cryptocurrency.
Hong Kong and Argentina pay through the nose for Bitcoin, Binance could be back in the U.S. within months and Barclays cuts ties with Coinbase in the U.K.
Coming every Sunday, Hodler’s Digest will help you track every single important news story that happened this week. The best (and worst) quotes, adoption and regulation highlights, leading coins, predictions and much more — a week on Cointelegraph in one link.
Top Stories This Week
Bitcoin (BTC) briefly veered back into four figures this week — reversing recent gains. It comes amid cooling tensions between the United States and China in their long-running trade war, with Washington deciding to delay the introduction of new tariffs that would have affected laptops and smartphones. Interestingly, crypto consumers in some parts of the world have ended up paying a premium for their Bitcoins in recent days. A report on Wednesday revealed that investors in Hong Kong were paying about $300 extra for BTC at the time — with pro-democracy protests and violent clashes with police creating political uncertainty. Over in Argentina, where the peso collapsed following the sitting president’s shocking defeat in primary elections, consumers on local exchanges were at one point paying out $420 more for their crypto than they would on major platforms.
More than 20 trading pairs vanished from Poloniex this week, with the California-based crypto exchange blaming their removal on low trading volumes. LTC/XMR, DASH/XMR, STEEM/ETH, GAS/ETH, LOOM/USDT and FOAM/USDC were among the pairings affected. Poloniex has stressed that each of these assets will remain independently tradable. This isn’t the first time that the American platform has streamlined its offering in recent months. Back in May, nine coins were delisted for its U.S. customers — Bytecoin (BCN), GameCredits (GAME) and Gas (GAS) among them — due to uncertain regulations.
Changpeng Zhao — or good ol’ CZ, for short — has predicted that Binance will be back in the business of operating crypto-to-fiat operations in the U.S. within two months. In an interview, the exchange’s CEO said: “I don’t want to promise any fixed dates, but there’s a lot of work being done and there’s a lot of things going on in flux, but I would say in a month or two.” June saw Binance temporarily restrict services in the U.S. as it worked to open a new division that would have the approval of the Financial Crimes Enforcement Network. CZ added that he is upbeat about the future of U.S. regulation — saying that the clear legal framework for traditional financial services shows that the environment for crypto will improve in time.
In news that could hit the crypto community hard, British banking giant Barclays has reportedly severed ties with the Coinbase exchange. For users in the United Kingdom, this could slow down the exchange of crypto for British pounds substantially. Until recently, Coinbase users were able to access the U.K.’s Faster Payments Scheme, but restrictions brought in last month meant they had to use SWIFT instead — an inferior system that takes days to complete a transfer. Spain’s Santander was also accused of joining the bank blockade against Coinbase this week, with British users complaining that they were struggling to deposit fiat funds. A U.K. spokesman denied this was the case, telling Cointelegraph: “We do not block payments to any legitimate company, however in certain circumstances we will refer payments for additional security checks, where we believe there may be a higher risk of fraud.”
The Intercontinental Exchange’s Bakkt, the much-anticipated U.S. platform for daily and monthly Bitcoin futures, has a launch date: Sept. 23. The company says it is full steam ahead on the service, and testing is now under way after it secured approval from regulators. Bakkt had initially announced plans to offer such a platform back in August 2018, but it suffered repeated delays because of compliance issues. The futures contracts are going to be provided through a partnership with Intercontinental Exchange Futures U.S. and International Exchange Clear U.S.
Winners and Losers
At the end of the week, Bitcoin is at $10,134.51, Ether at $184.93 and XRP at $0.27. The total market cap is at $263,812,932,637.
The top three altcoin gainers of the week are BitBall, CyberFM and Tellurion. The top three altcoin losers of the week are Boltt Coin, Skeincoin and Block-chain.com.
For more info on crypto prices, make sure to read Cointelegraph’s market analysis.
Most Memorable Quotations
“Opinion: Many #cryptocurrency in the top market cap would be absolutely #Rekt by #EthereumClassic if we removed #Ethereum from the brand. I know we are original Ethereum project, but maybe this can be water cooler chatter at summit eh?”
Stevan Lohja, Ethereum Classic Labs
“The SEC is bringing Thor’s hammer.”
Tone Vays, veteran trader
“Bitcoin was one of the few assets that we watched that actually predicted that uncertainty ahead of time. Nothing else was really moving, Bitcoin was.”
Nicholas Colas, co-founder of DataTrek Research
“Cryptocurrency investments are risky. Investors should be extra cautious when dealing with promoters who claim their offering does not have to be registered with securities regulators. Quick returns of 150% are as rare as Bigfoot.”
Brian E. Frosh, Maryland’s attorney general
“Before, it was crypto ‘no’, blockchain ‘yes’. Now it is more like blockchain ‘yes’, private crypto ‘yes’, public and listed crypto ‘no’.”
Daniel Shin, Terra co-founder
“So far crypto has focused mostly on retail investors [...] or institutional investors. [...] Half the money in the U.S. is managed by financial advisors, and right now it’s very difficult for them to access that market.”
Hunter Horsley, CEO of Bitwise Asset Management
“The whole idea of Bitcoin is it’s a store of value. It’s a chaos hedge, or schmuck insurance, as I like to call it.”
Mark Yusko, CEO of Morgan Creek Capital
Prediction of the Week
The start of the week saw Goldman Sachs give a bullish forecast for BTC prices — suggesting a short-term target of $13,971 for the dominant cryptocurrency. Its target has been based on Elliott Wave Theory, which forecasts market trends by identifying extremes in investor psychology, along with price highs and lows. The financial institution has been taking an increasing interest in the crypto market of late — exploring the potential of creating a digital currency and ramping up the development of a secret project last month by opening a job vacancy for a digital asset project manager.
FUD of the Week
A theory has been circulating that this week’s downturn in BTC prices could be because of sell-offs from a Chinese Ponzi scheme worth $3 billion. An estimated 10 million investors were scammed when PlusToken was created in the middle of 2018 — and in a nod to a classic Ponzi scheme structure, it promised high investment returns at different rebate percentages for its four tiers of members. Dovey Wan, the founding partner of Primitive Ventures, has claimed that mass sell-offs from wallet addresses known to be associated with PlusToken are now taking place. She has urged exchanges and over-the-counter platforms to blacklist them as a matter of urgency. However, researchers from TokenAnalyst have countered Wan’s claims, citing a lack of evidence of addresses associated with PlusToken moving large amounts of Bitcoin to known exchanges.
In other Coinbase news, its U.K. customers have reportedly been told that the exchange is dropping support for Zcash after Aug. 26. The fact that customers in the U.S. and the European Union remain unaffected has prompted speculation that Brexit could be to blame. Affected users can either convert their Zcash to another cryptocurrency on the exchange or transfer their assets to another wallet. If no action is taken by the deadline date, the remaining crypto will be liquidated into British pounds. British Bitcoin entrepreneur Alistair Milne has suggested that Coinbase may have been told to delist Zcash in order to regain access to the U.K.’s Faster Payments System. For its part, Zcash has stressed that it is “100% compatible” with British regulations — and says its presence on other U.K. exchanges remains unaffected.
Some of Craig Wright’s documents in a recent trial were faked, Bitmessage developer Jonathan Warren has alleged. The man behind the peer-to-peer messaging service claimed there were chronological inconsistencies in the paperwork the Australian computer scientist provided to court in the long-running lawsuit filed by late cyber-security expert David Kleiman’s estate. Warren accused Wright of faking some contracts, emails and Bitmessages that were reportedly set to move Kleiman’s assets under his control. Kleiman’s estate is suing Wright for $5 billion amid allegations he stole hundreds of thousands of BTC. Wright — who has claimed he is the inventor of Bitcoin — denies the allegations.
Best Cointelegraph Features
Reports suggest 300,000 LTC addresses may have been affected by a dusting attack, in which users received a fractional amount of Litecoin that could then allow malicious actors to track those addresses. Here, Joshua Mapperson explains what a dusting attack means, why it has happened and what crypto consumers can do to stay safe.
Statistics by an international recruiting company suggest that global demand for blockchain engineers has increased by 517% over the past year. Cointelegraph’s Julia Magas takes a look at how the jobs market in the crypto industry has evolved since 2018 — and where vacancies are being advertised.
Have you received a letter from the Internal Revenue Service? If so, time is running out to reply — and those who don’t respond with details of all crypto transactions between 2013 and 2017 run the risk of having their tax accounts audited. Our Lokay Cohen takes a look at what you need to do...
Global investor sentiment toward the crypto industry seems to have shifted in recent years. Here’s how the regulations surrounding this space look in 2019…
As the global investor community starts to become increasingly aware of what crypto has to offer, it appears as though this burgeoning asset class is becoming more and more accepted. This is probably best highlighted by the fact that after experiencing bearish conditions all through 2018 (with Bitcoin even stooping at one point to around the $3K mark), the digital currency market as a whole was able to swiftly regain its former momentum and make an impressive comeback.
Since 2016, a number of countries have either banned digital currencies altogether (such as China, Pakistan and Egypt) or have placed various legal impositions on the asset class (thereby making it quite difficult for people to facilitate their daily monetary transactions using these currencies).
Other states around the world have an open mind toward crypto and are currently looking to amend the way in which they regulate Bitcoin and its contemporaries in order to nurture the industry while minimizing issues related to tax evasion and money laundering.
Furthermore, members of the G-7 (i.e., France, Japan, Canada, Italy, Germany, the United Kingdom and the United States) along with Australia and Singapore are reportedly in the process of creating a new crypto system that can help collect and share personal data associated with individuals who regularly make use of cryptocurrencies.
This new system will allegedly have its digital foundations laid by the end of 2020 and will be up and running a few years following that. Per a recent statement issued by the G-7, once the aforementioned platform is deployed, it will be managed exclusively by firms operating within the private sector.
Cryptocurrency regulations around the world
Here are the legal frameworks employed by various countries to either foster or curb the use of this ever-evolving asset class. Below is the map outlining the countries that have made an official outline of their stance toward crypto.
Countries that take up the middle ground:
The U.S. is undoubtedly one of the global leaders when it comes to crypto adoption and use. As things stand, investors have the option of purchasing not only Bitcoin but over 45 other digital assets across the country. The U.S. Financial Crimes Enforcement Network, or FinCEN, has classified cryptocurrency exchanges as being “money transmitters” and are therefore bound by certain niche laws. In a similar vein, the IRS too has classified crypto assets as being property with value — and thus are taxable commodities.
- The laws surrounding crypto differ from state to state, and even national-level regulators have varied opinions when it comes to how cryptocurrencies should be treated. For example, while the Securities and Exchange Commission (SEC) considers digital assets to be securities, the Commodity Futures Trading Commission (CFTC) classes them as commodities (thereby allowing users to publicly trade cryptocurrency derivatives).
- Last year, the U.S. Congress released a Joint Economic Report (JER) to indicate that within the next 12 months or so, the country will move toward a more streamlined regulatory approach to crypto.
Another country that is home to a large number of established crypto startups and business ventures is Canada. The global powerhouse boasts of two different cities that are considered to be Bitcoin hubs (i.e., Vancouver and Toronto) and makes use of its existing Anti-Money Laundering (AML) and counter-terrorist financing laws to govern this relatively young asset class.
- The country’s legal system requires firms dealing with digital currencies to register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
- Local banks are not allowed to open or maintain accounts for clients dealing with digital currencies (i.e., if they are not registered with FINTRAC).
- Quebec’s financial regulator — the Autorité des Marchés Financiers — governs a number of local ATMs and exchanges in accordance with the Money Services Businesses Act, which requires money transmitters to verify the identity of their customers and maintain records of their client’s activities.
The U.K. is widely considered to be a global leader when it comes to crypto adoption and innovation. And while digital currencies are not banned across the region, they are still not considered to be legal tender. Also worth mentioning is the fact that no value-added tax, or VAT, is applicable on the purchase of various cryptocurrencies across the U.K. Rather, a surcharge is applicable on goods or services that are acquired in exchange for Bitcoin or other similar crypto assets.
- Any profits or losses incurred by investors in relation to their crypto holdings are subject to capital gains tax.
- A self-regulatory trade association named CryptoUK is seeking to improve the U.K.'s existing industry standards (surrounding Bitcoin) by implementing a code of conduct that includes a number of niche provisions related to individual privacy, data security and AML.
The Reserve Bank of Australia seems to have an open mind toward the crypto industry — with the regulatory body stating that it does not prevent people from making use of digital currencies. If that wasn’t enough, back in 2017, the Australian government declared that Bitcoin would be treated like regular money and will no longer be subject to double taxation.
While the regulatory status of crypto is still quite murky in the region, France recently passed a bill that will see a new legal framework established to govern cryptocurrency operations — such as initial coin offerings (ICOs) — across the nation.
The German Federal Financial Supervisory Authority (BaFin) classifies cryptocurrencies as being “units of account” that can be used for payment purposes. However, individuals/firms indulging in token purchases (for commercial purposes) need to obtain authorization from the regulatory body in advance. Lastly, BaFin prescribes a case-by-case assessment for firm’s looking to conduct an ICO — thereby indicating that it has an open mind toward such nascent fundraising methods.
A strong stance to forbid:
Early last year, China issued an umbrella ban on any crypto activities taking place within its borders. Additionally, there is also an access ban that has been placed on all local/international crypto exchange platforms by the government. According to Zhou Xiaochuan, ex-governor of the People’s Bank of China, local financial institutions have been instructed by regulators that digital currencies should not be recognized as tools for retail payments.
The South Asian country seems to have adopted quite a hostile stance toward the crypto industry at large — especially over the last year and a half. For example, India’s central banking authority, the Reserve Bank of India, issued a circular in 2018 advising all private banks to refrain from processing any crypto-related transactions.
Crypto friendly nations
The Swiss government has remained open to the idea of crypto/blockchain from the very start. For example, the local regime provides a lot of financial impetus (such as low tax rates, tax exemptions) to crypto startups looking to set up their operations.
- Switzerland’s finance regulator classifies digital currencies as assets that need to be declared on one’s annual returns and are subject to the country’s existing wealth tax scheme.
- Per a report released last year, the Swiss “Crypto Valley” (i.e., the canton of Zug) houses a plethora of crypto/blockchain-related businesses that are estimated to be worth $44 billion.
The small island nation does not have any predefined laws that directly tackle Bitcoin and other digital assets. However, a couple of years back, the country’s prime minister, Joseph Muscat, brought into effect an economic strategy that was designed to help lure more investments to Malta from all over the globe.
Additionally, due to Malta’s relaxed tax laws, a number of big name crypto firms (including Binance) have set up shop in the country (primarily to bypass some of the legal hassles that crypto businesses encounter throughout most of Europe’s major nations).
This tiny European country houses one of the biggest cryptocurrency exchange platforms — Bitstamp — within its borders. In terms of how cryptocurrencies are defined, the local government views them as “intangible assets” that are not subject to income tax until they are exchanged for fiat. Additionally, all crypto-related transactions are exempt from VAT within Luxembourg.
The Asian powerhouse is known for its business-friendly, low-tax regulatory framework. In recent times, the Singaporean government has signed a number of laws that are designed to allow crypto businesses to flourish within the region.
- Last year, the central bank of Singapore finalized the country’s new regulatory framework for payment services, which now includes cryptocurrency.
- Singapore’s digital infrastructure is replete with a number of crypto and fintech firms that can help attract investors.
Per a decree passed by Alexander Lukashenko — the president of the Republic of Belarus — local residents have the right to buy/sell crypto assets as well as create their very own digital currencies. Not only that, the decree also allows crypto enthusiasts to indulge in activities such as:
- Mining of various altcoins.
- Trade crypto assets in exchange for Belarusian rubles, foreign currencies or even other forms of electronic money.
In addition to all this, the government has exempt owners from paying any taxes on their crypto holdings till Jan. 1, 2023.
Some countries are ahead of the curve
While some countries are still struggling to devise economic frameworks that are inclusive of digital assets, there are also those nations that already make use of systems that require crypto service providers to be licensed by relevant local regulatory bodies.
In Japan, all cryptocurrency trading platforms need to be registered with the nation’s Financial Services Agency. Nineteen businesses have already obtained the necessary licenses required to commence their operations, whereas at least 110 more firms have expressed interest in registering for the same.
This East Asian country is another example, with the Financial Intelligence Unit (FIU) recently unveiling its plans to regulate local crypto exchanges by bringing them under a unified administrative umbrella. Also, South Korea administers its crypto industry by using a “real-name system,” meaning that any crypto user wanting to withdraw or deposit Korean won must be in possession of a real-name-verified account at the bank providing this service to the exchange. As things stand, only Bithumb, Upbit, Coinone and Korbit are providing the aforementioned services for their users.
Litecoin founder Charlie Lee acknowledged that he is one of the investors in Bitcoin personal key security firm Casa, congratulated it for a new high profile hire.
“I have the same feeling about Casa today as I had about Coinbase when I joined in 2013 as the 3rd hire. Casa is making Bitcoin easy to use and that is extremely important for this space. Looking forward to great things!”
A notable hire
The tweet was posted in response to Casa announcing the hire of a former engineer and product developer at Microsoft and software firm Tableau, as well as a Seattle Bitcoin Meetup organizer Brian Lockhart. The tweet states:
“We are thrilled that we were finally able to convince him to come out of retirement and play in the big leagues at Casa.”
According to Crunchbase, Casa received $2.1 million in funding so far during its seed round in March 2018.
As Cointelegraph reported in June, Casa Node, one of the industry’s popular pre-synced node products, relied on an inbuilt Raspberry Pi, though earlier iteration of the model caused frustration for some users due to its reported slowness.
In July, Facebook reportedly hired Standard Chartered Bank’s head of public affairs Ed Bowles for its cryptocurrency project.
Most of the top 20 cryptocurrencies are suffering moderate losses on the day as Bitcoin struggles to stay over the $10,150 mark again.
Market visualization courtesy of Coin360
Bitcoin 7-day price chart. Source: Coin360
Ether (ETH) is holding onto its position as the largest altcoin in terms of its market capitalization, which currently stands at $19.9 billion. The second-largest altcoin, Ripple’s XRP, has a market cap of $11.3 billion at press time.
Coin360 data shows that ETH has seen its value increase by about 0.04% over the last 24 hours. At press time, ETH is trading at around $185.The coin has also lost about 10.19% of its value during the week.
Ether 7-day price chart. Source: Coin360
XRP is down by about 0.15% over the last 24 hours and is currently trading at around $0.265. The coin is down by about 10.77% on the week.
XRP 7-day price chart. Source: Coin360
Among the top 20 cryptocurrencies, the only ones reporting gains other than Ether are Unus Sed Leo (LEO), which is over 6% up, Chainlink (LINK), which is over 5.5% up, and Tezos (XTZ), which is over 1.5% up.
At press time, the total market capitalization of all cryptocurrencies is $264.6 billion, about 10.39% lower than the value that was reported a week ago.
In traditional markets, the U.S. stock market is seeing gains so far today, with the S&P 500 up 1.44% and the Nasdaq up 12.8% at press time. The CBOE Volatility Index (VIX), on the other hand, lost 1.41% on the day at press time.
Oil futures and indexes are seeing mixed movement today, with WTI Crude up 0.73%, Brent Crude up 0.7% and Mars U.S. up 0.61% at press time. The OPEC Basket is down 1.01% and the Canadian Crude Index has seen no change in its price over the 24 hours by press time, according to OilPrice.
A look at green policy and crypto energy consumption in Japan.
Society is now witnessing the implementation of digital currencies, artificial intelligence (AI) and blockchain technology worldwide. These new digital technologies necessitate very high consumption of electric energy, which is currently produced with coal and fossil fuels that have adverse environmental effects. A global shift toward green energy will require the removal of the technological/infrastructural, financial and regulatory/tax-policy barriers. In this series, we evaluate the tax, digital technology and solar policies (including a space solar power satellite) of the top carbon dioxide-emitting countries.
In 2009, Japan — the Land of the Rising Sun — undertook important initiatives that set the tone for how it intended to solarize the world’s third-largest digital economy. Japan passed its Basic Space Law, which established a space power satellite (SPS) — the concept of collecting solar power in outer space and distributing it to Earth via satellites — as a national priority.
The Ministry of Economy, Trade and Industry (METI) of Japan sets the strategic energy plan for the world’s fourth-largest energy consumer and the sixth-largest emitter of CO2 — 90% of which is tied to hydrocarbon energy. METI believes that the impact of blockchain — which consumes large amounts of electricity — is huge and that its importance is similar to the emergence of the internet.
According to a World Economic Forum survey, global GDP stored on blockchain technology is expected to reach 10% by 2027. Therefore, in June 2018, Japan introduced a sandbox regime to accelerate the introduction of new business models and innovative technologies such as blockchain, AI and the Internet of Things.
The world’s largest technology investment fund — the $100 billion Softbank Vision Fund, which announced the launch of a second fund — and Japanese megabanks have been investing in and funding blockchain startups concerning applications in telecommunications, swift -payment system, solar energy, identity, health care, messaging, transportation, data security and fintech industries, both in Japan and globally.
Solar photovoltaic technology and its applications in solar energy in Japan
Japan’s Ministry of Technology and Industry (MITI) views solar photovoltaic power as an essential part of its digital economic transformation. Japanese science fiction author Haruki Murakami concurs “Japan, as an economic power, should find another source of power besides atomic energy. It may cause a temporary economic dip, but we will be respected as a country that does not use nuclear power.”
Solar photovoltaic (PV) technology — which converts light into electrical current — was born in the United States at Bell Labs when engineer Daryl Chapin, chemist Calvin Fuller and physicist Gerald Pearson worked together to develop the first silicon solar photovoltaic cell in 1954. The New York Times wrote that the silicon solar cell “may mark the beginning of a new era, leading eventually to the realization of one of mankind’s most cherished dreams — the harnessing of the almost limitless energy of the sun for the uses of civilization.”
First launched in 1974 by MITI, with METI joining in 2001, the Sunshine Project was a long-term comprehensive plan for the research and development of new solar energy technologies to resolve Japan’s energy and climate change problems. The program was heavily funded by the government because PV technology emits no CO2 while also being highly reliable and modular, and with lower construction and operational costs.
Starting in the 1980s, Japanese manufacturers began incorporating solar PV cells into electronic applications in various areas. In the late 1990s, Japanese government programs began promoting solar houses. In 2009, Tsutomu Miyasaka and his colleagues in Japan reported on perovskite compounds being light absorbers for solar energy applications, which outperform the efficiency of more established PV technologies and can be printed or woven into fabric. As a result, Japan emerged as the world’s third-largest solar energy power producer, with 45% of PV cells in the world being manufactured in Japan.
With the rise of Bitcoin and in the aftermath of the Fukushima nuclear plant disaster in 2011, the government encouraged the proliferation of decentralized solar energy by encouraging the production of more energy-efficient buildings, cars that combine solar panels with some form of energy storage as well as other devices. This compelled the solar energy sector to begin using blockchain technology. Professor Umit Cali of the University of North Carolina provided an exclusive comment, saying:
“In the solar energy sector, decentralized blockchain technology is used in person-to-person (P2P) energy trading, labeling, energy provenance and certification, smart metering and billing, electric vehicle charging and payments, and wholesale power trading and settlements.”
Reports published by Fitch Solutions Macro Research and Globadata conclude that over the next decade, decentralized solar technology may replace PV solar farms as the main growth-driver in Japan. Already, a blockchain-enabled solar energy-trading pilot project is set to link 100 solar rooftops of smart, zero-energy homes in the country, while another pilot project will administer an energy-trading marketplace using blockchain to connect a number of Japanese power production facilities with homes, offices, factories, batteries and electric vehicles.
Toyota Motor Corp. — which began testing high-efficiency solar cells for electric cars — has joined forces with the University of Tokyo and online renewable energy retailer Trende to test peer-to-peer vehicle-to-grid electricity trading using blockchain technology, which allows for electric vehicles to communicate with the power grid to buy and sell electricity to smooth out peak and low demand times.
Japan's Marubeni Corp. has recently backed a blockchain-based power-purchasing platform called WePower that makes it easy for small- and medium-sized businesses to buy power from solar project developers, offering standardized, digital power purchase agreements to help underwrite new projects.
Japan is a predominantly mountainous land with varied weather conditions, and the area that a PV solar farm occupies is an important consideration, as it determines the yield. Accordingly, Japan has been creative in developing new PV solar energy generation stations at home and abroad — in seas, lakes, deserts and space.
Japan built the world’s first and largest floating solar plants. Its lakes and reservoirs are now home to 73 of the world's 100-largest floating solar plants, which is up to 16% more efficient than land-based solar systems.
In cooperation with the National University of Mongolia, Japan is also participating in the project “Energy from the Desert," with the Japan International Cooperation Agency (JICA) providing financial support covering up to half of the initial investment costs. Marubeni Corp. built the world’s largest PV farm, the Noor Abu Dhabi photovoltaic power project, in the Sweihan Desert of the United Arab Emirates, which recently began producing solar energy at $0.024 per kilowatt hour.
The Japanese Space Agency (JAXA) began its SPS program in 2009, with the goal to set up a one gigawatt solar farm in space that can transmit energy back to Earth by 2030. In 2015, Japan came closer to harvesting solar energy from space when it transmitted condensed solar power converted to microwaves to a receiving antenna, which converted only 5%-10% of the power required to power three PCs.
For space solar power generation to become commercially viable, 50% of the solar power generated in space needs to be transmitted to Earth. JAXA is also designing kite-like orbiters that will travel in low-earth orbit above the equator, with a transmitting antenna on the Earthward face and solar collectors on spaceward face in order to transmit solar energy to Earth. In 2010, JAXA has already successfully launched Ikaros, a solar space kite, that sailed through deep space and was propelled by solar energy. Small satellites are ideal candidates for this type of solar propulsion.
Environmental, regulatory and tax policy in Japan
Japan has inadequate energy resources and imports 87.4% of its hydrocarbon energy. It is the world's largest importer of liquefied natural gas and third-largest importer of oil and coal.
Japan has lower levels of subsidies for fossil fuel consumption when compared to other G-7 countries, but higher subsidies for oil and gas exploration and coal production. Because efforts to compensate for the drop in nuclear power generation after the Fukushima nuclear crisis — which was triggered by the 9.1 Tohoku tsunami in Japan and which forced the shutdown of Japan’s entire fleet of nuclear 48 reactors, effectively terminating the plan to supply half the country’s electricity with nuclear power — resulted in far more support for fossil fuels and increased CO2 emissions compared to renewable energy.
Japan provides billions in taxpayer dollars for building highly polluting coal plants in Japan as well as overseas. Japan’s largest banks — MUFG and SMBC Group — along with other banks, have reportedly continued to finance fossil fuels with $1.9 trillion since the adoption of the Paris climate agreement. Therefore, Japan is the second-worst performer when it comes to reforming fossil fuel subsidies, according to a report by the Natural Resources Defense Council.
In October 2012, Japan implemented a carbon tax of 289 Japanese yen (about $3) per ton of CO2 equivalent. The government plans to use the revenues of $2 billion generated from this carbon tax to finance clean energy and energy-saving projects. Hydrocarbon air pollution is a drag for renewable energy. Dust and other sky-darkening air pollutants slash solar energy production by an estimated 11.5% to 13%. The haze blocks sunlight from reaching the solar panels, and if the particles land on a panel’s flat surface, they cut down on the area exposed to the sun.
Japan also introduced a feed-in tariff (FIT) system in 2012 to lower solar power generation costs, which are double that of Europe thereby shifting the price of solar energy on the public to the tune of 2.4 trillion yen (roughly $22 billion) in the 2019 fiscal year alone, with a cumulative total of about 10 trillion yen (nearly $100 billion) since its introduction in July 2012. The government’s steady lowering of the FIT purchase price, which stands at 14 yen ($0.13) per kilowatt hour in 2019, has brought a drastic drop in profits for solar energy companies, triggering a wave of bankruptcies, which have reportedly risen year-on-year for five consecutive years since 2013.
Globally, subsidies and financing for fossil fuels continue to remain stubbornly high. According to reports, 2018 actually saw an increase in money going into new upstream oil and gas projects, while investment in renewable power of all kinds dipped 2%. The World Bank still funds the fossil fuel industry at least three times greater than renewable energy.
This is despite G-20 finance ministers’ commitment to working together in redirecting public investments to renewable energies through fiscal policy and the use of public finance. Despite the International Renewable Energy Agency reporting that the cost of solar electricity has tumbled 80% in recent years and with three-quarters of coal production now more expensive than solar energy, the fossil fuel industry still receives benefits from governments.
In the latest G-20 meeting in Osaka, Japan reiterated its dedication to the Paris climate agreement and to phasing out fossil fuel financing and subsidies in order to tackle climate change. Enhancing zero-carbon energy is an urgent task for the Japanese government, which is aiming to derive 44% of power from renewable (7% from solar energy) and nuclear power by 2030 to fuel its burgeoning digital economy. Fossil fuel subsidies significantly reduce the use of renewables, according to an OECD report.
According to scientific reports, earthquakes, volcanic eruptions, giant landslides and tsunamis become more frequent as global warming changes the Earth’s crust, swells sea levels, and triggers a repetitive cycle of severe natural disasters that cause extensive environmental and economic damage (e.g., it cost $315 billion to $728 billion to clean up the Fukushima nuclear reactor site alone).
On Aug. 12, Australian energy technology company Power Ledger and Japanese Kansai Electric Power Co. announced they completed a joint trial of a blockchain-based peer-to-peer trading system for post-feed-in tariff surplus solar power in Osaka. Their announcement came on the heels of a report that highlights multiple ways blockchain technology could disrupt the peer-to-peer solar energy trading sector. According to the report:
“Blockchain technology could alter the manner in which electricity customers and producers interact. Traditionally electric utilities are vertically integrated. Blockchain could disrupt this convention by unbundling energy services along a distributed energy system. For instance, a customer could directly purchase excess electricity produced from their neighbor’s solar panels instead of purchasing electricity from the utility.”
Japan intends to replace FIT's fixed price system with a competitive bidding/blockchain-based peer-to-peer trading system for post-feed-in tariff surplus solar power system as soon as 2020. This would thereby reduce inequality and provide cheaper, cleaner energy that reduces CO2 emissions and would help promote digital development in Japan as well as across the world.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Blockchain project NEO is considering integrating Celer Networks layer-two scaling protocol to improve scalability.
Blockchain project NEO is considering integrating Celer Network’s (CELR) layer-two scaling protocol to improve scalability.
Faster transactions, more possibilities
As industry-focused news outlet Crypto Briefing reported on Aug. 17, John Wang, NEO’s director of Eco Growth, said that integration with Celer is under discussion. Celer’s platform is a solution that enables faster off-chain transactions both for payments and generalized off-chain smart contracts.
To transfer value across the network, Celer uses its native CELR tokes. According to the report, community members say that Celer is fifteen times faster than Bitcoin’s (BTC) Lightning Network. Commenting on the development, Wang said:
“A public blockchain is more than a currency: it needs to have the infrastructure for lots of users to come to it … to enable people to do anything.”
New prospects for scaling
In March, major crypto exchange Binance’s token launch platform, Binance Launchpad, completed a $4 million sale of CELR tokens, following two other initial coin offerings such as the BitTorrent (BTT) token sale in January and the Fetch.AI (FET) token sale in February.
Earlier in August, blockchain-based decentralized application platform (DApps) Tron (TRX) released a sidechain scaling solution, the V1.0 code, designed to enhance and ensure the supposedly unlimited scaling capacity of the Tron mainnet. This will purportedly let DApps consume less energy and run with higher security and efficiency on Tron.
New Zealand has published a new ruling on salary and bonuses paid in crypto being subject to a pay-as-you-earn tax. But what does that actually mean?
The national tax authority of New Zealand, the Inland Revenue Department (IRD), has recently published binding rulings and guidance for salaries and bonuses paid in crypto, made under s 91D of the country's Tax Administration Act of 1994. This ruling applies only to salary and wage earners and not to self-employed individuals, and only for services performed by an employee for a fixed amount and as a regular part of his/her remuneration.
While some may find this as proof that New Zealand has officially declared that income paid in cryptocurrencies is legal, the future of crypto adoption is not as bright as one might imagine. This ruling simply establishes professional guidance for companies and employees on how to tax crypto-based salaries by maintaining cryptocurrency status as an asset and not as a currency.
The published document cited the New Zealand's IRD commissioner, who has even made an effort to state that crypto is not a currency, not legal anywhere and even doubted its ability to be a store of value. According to Commissioner Naomi Ferguson:
“In the Commissioner’s view, crypto-assets are property. Crypto-assets are not ‘money’ as commonly understood (at least not at the present time). In particular, because crypto-assets are not issued by any government, they are not legal tender anywhere. Further, although acceptance of certain crypto-assets as payment for goods and services is increasing, they are not “generally accepted” as payment. Given the extreme volatility experienced to date, there are also issues around some crypto-assets’ ability to be a store of value.”
Not exactly the desired outcome we were hoping for from a government ruling.
What exactly is this ruling all about?
There are two main issues: salary paid in crypto and bonuses paid in crypto. The commissioner of New Zealand’s tax authority has been asked to provide guidance and issue a ruling on how remuneration paid in crypto should be taxed when received by employees as part of their regular payments.
According to the ruling, crypto assets that are part of an employees salary or bonus will be subject to pay-as-you-earn (commonly known as PAYE) tax or Fringe Benefits Tax (FBT). In order for crypto salaries and bonuses to be considered under PAYE, they cannot be subject to a “lock-up” period, they can be converted to fiat currency on an exchange, a significant purpose should function as a currency, or their value is pegged to one or more fiat currencies. Other types of crypto assets paid to an employee that are not subject to PAYE will be subject to FBT.
Is this ruling considered groundbreaking as far as tax authorities’ acceptance of employee payments in crypto?
"Does virtual currency paid by an employer as remuneration for services constitute wages for employment tax purposes? [...] Yes. Generally, the medium in which remuneration for services is paid is immaterial to the determination of whether the remuneration constitutes wages for employment tax purposes."
Nevertheless, the fact that the IRD published clear and detailed guidance to these particular issues signals that tax regulators are taking crypto seriously and know that it cannot be ignored anymore. The level of detail in this ruling is much higher than the ones we saw outlined in the 2014 IRS guidance.
Back in September 2018, a group of blockchain and cryptocurrency professionals and enthusiasts proposed a document for New Zealand’s IRD that suggests “accepting cryptocurrency as payment for taxes.” The proposal acknowledged the difficulty of liquify crypto to fiat as a tax payments barrier and suggested that crypto tax payments will encourage compliance. The recommendations also included tax exemption for trading crypto for other crypto.
Tax authorities now understand much more than the basics of "crypto as an asset or currency." They know exactly how it should be done in practice. Now, all eyes are on the IRS to provide its detailed clarifications, as it promised.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Nahmii, Hubii’s blockchain scaling platform, reports a major week, announcing an IEO and the first member of its governing association two years after Hubii’s troubled ICO.
Ethereum-based layer-two blockchain scaling platform nahmii has onboarded the Norwegian Block Exchange (NBX) as the first member of its governing association, according to a press release shared with Cointelegraph on Aug. 16.
Created by Hubii, nahmii is designed to solve the transaction speed issue on the Ethereum network, which can reportedly manage only 15 transactions per second. This, the release notes, makes Ethereum unsuitable for large-scale commercial deployment. Explaining the principle behind its solution, nahmii said:
“Nahmii fixes that by moving transactions away from the main chain to a second network that sits on top of the main Ethereum chain. Doing this allows nahmii to process transactions much more quickly, and means it is theoretically able to process a limitless number of transactions at the same time.”
From ICO to IEO
As announced earlier this week, nahmii is also planning to launch an initial exchange offering (IEO) hosted by crypto exchange Liquid and tentatively scheduled for Sept. 18. Hubii CEO Jacobo Toll-Messia told Cointelegraph:
"The upcoming IEO on Liquid will help us to provide nahmii with awareness, improve the distribution of the number of token holders which is key to the security of the protocol and increase the commercial adoption of the protocol"
Back in 2017, the company announced an initial coin offering (ICO) that saw promotion by boxing champion Floyd Mayweather Jr. At the time, Mayweather also promoted digital currency startup Centra’s and prediction market project Stox’s ICOs.
The Securities and Exchange Commission (SEC) found that Mayweather did not disclose promotional payments from the three ICO issuers, including $200,000 from Stox and Hubii. Mayweather agreed to pay $300,000 in disgorgement, a $300,000 penalty and $14,775 in prejudgment interest.
The scandal surrounding promotion for their ICO may have inspired Hubii to change tack over the past two years. Toll-Messia told Cointelegraph that “nahmii represents a culmination of nearly 2 years building instead of hyping.”
The governing foundation’s role
NBX, as a member of nahmii’s governing association — the nahmii Foundation — will reportedly take part in managing the project’s day-to-day operations such as setting transaction fees. They will also control 20% of nahmii’s native NII token. Commenting on the partnership, Toll-Messia told Cointelegraph:
"We have built nahmii for real use cases that exist and we look forward to a long and fruitful partnership with NBX. We welcome them to the Foundation, as they are uniquely poised to make use of nahmii today."
Most major cryptocurrency markets have seen a slight drop today, with Bitcoin price falling below the $10,200 point.
Saturday, Aug. 17 — Most major cryptocurrency markets have seen a slight drop today, with Bitcoin (BTC) falling below the $10,200 price point, according to data from Coin360.
Market visualization. Source: Coin360
BTC is trading at around $10,197 at press time, down roughly 3% on the 24-hour period to press time. Today, BTC saw a drop to as low as $9,765 before trading sideways around its current level. Bitcoin is now down almost 14% on the week, while on its monthly chart the coin is up by 6.73%.
Bitcoin 7-day price chart. Source: Coin360
The second-largest cryptocurrency by market cap, Ether (ETH) started the day at $182.96. The altcoin mirrored Bitcoin’s drop earlier today, subsequently experiencing a gradual and jagged decline over the course of the day. Ether has lost over 14% on the week and 11% in terms of its monthly performance.
Ether 7-day price chart. Source: Coin360
XRP is currently trading in the green at around $0.263, leaving it up 0.46% over the past day. Earlier today, the altcoin saw an upswing to $0.267. On its weekly and monthly charts, XRP is down by 11.43% and 14.24% respectively.
XRP 7-day price chart. Source: Coin360
As reported earlier today, Bitcoin SV blockchain developer and blockchain organization service Open Directory creator synfonaut launched a consulting service called Office Hours. This service connects developers in need of assistance with experienced Bitcoin SV developers for help on Bitcoin SV projects.
Also today, Cointelegraph reported that crypto lending firm Nexo had paid its token holders a total of $2,409,574.87 in dividends, reaching an annualized dividend yield of 12.73%.
The upcoming implementation of the California Consumer Privacy Act of 2018 has grave implications for businesses utilizing blockchain technology...
The California Consumer Privacy Act of 2018 (CCPA), which goes into effect on Jan. 1, 2020, has signaled a new push in the United States to strengthen and broaden privacy regulations, similar to the trends seen in the European Union through the passage and implementation of the General Data Protection Regulation (GDPR).
The CCPA affords covered consumers new privacy rights not otherwise enjoyed here in the U.S. Under the CCPA, an entity qualifying as a “business” must provide:
- Abbreviated disclosures regarding the personal information that is collected from or about covered consumers (Cal. Civ. Code § 1798.100).
- Certain other expanded disclosures regarding personal information collected from or about covered consumers (id. § 1798.110(a)).
- Disclosures regarding the sale or disclosure of personal information for a business purpose (id. § 1798.115).
- An opt-out from the “sale” of personal information (id. § 1798.120).
- An opt-in requirement before selling a minor’s personal information (id. § 1798.120(c)).
- The ability for covered consumers to access and/or delete personal information collected from or about them (id. §§ 1798.105, 1798.100(d)).
Subjected businesses must also implement measures to prevent discrimination against consumers who exercise their rights under the CCPA (id. § 1798.125). Because of these new obligations, the implementation of the CCPA may bring about drastic challenges for organizations that are utilizing blockchain technology.
What does the CCPA mean for blockchain?
Blockchain technology is being used to develop solutions and tools that provide individuals much greater control over their data. The technology’s often public and immutable ledgers promise to introduce a new level of transparency into how individuals’ data is being used. Blockchain technology (particularly when it is employed in a public/permissionless environment) is decentralized in a manner that often means that the way that data is stored, processed or otherwise used does not necessarily depend on a centralized authority or single “steward” or “controller.” In many ways, blockchain technology upends traditional models of collecting and storing personal data by enabling decentralization — thus removing third-party intermediaries.
However, most data privacy laws, including the CCPA, presume the operation of the traditional data model, which makes them difficult to reconcile with a decentralized or distributed data model. Thus, despite the fact that the CCPA aligns philosophically with many of the goals of blockchain technology (i.e., data integrity, cybersecurity and transparency), several inherent features of most blockchain technologies can pose compliance challenges — in particular, blockchain’s decentralized structure and the immutability of data entered into the blockchain ledgers.
Much of the uncertainty surrounding the CCPA (both generally and as it applies to blockchain technology) stems from the statute’s broad definitions. For example, the definition of personal information encompasses “information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.” (Id. § 1798.140(o)(1)). Despite calls for the legislature to provide further clarification — including those voiced during the state attorney general’s multiple public forums pending the passage of any additional amendments — the statute, as it is currently written, becomes effective on Jan. 1, 2020.
Notably, enforcement actions by the attorney general may be brought six months after the publication of final regulations or Jul. 1, 2020, whichever is sooner (Id. § 1798.185(c)). Civil penalties include injunctions and fines of up to $2,500 per violation and aggravated fines of up to $7,500 per intentional violation. Note that consumers are afforded a limited private right of action in situations when their personal information is “subject to an unauthorized access and exfiltration, theft, or disclosure as a result of the business’s violation of the duty to implement and maintain reasonable security procedures and practices.”
When are blockchain businesses subject to the CCPA?
The CCPA’s obligations are limited to “businesses,” which are defined as any for-profit company doing business in California that collects personal information and satisfies at least one of the following thresholds:
- Receives an annual gross revenue in excess of $25 million.
- Annually buys, sells, or, for commercial purposes, receives or shares personal information of at least 50,000 California consumers, households or devices.
- Derives 50% or more of its annual revenue from “selling” California consumer personal information.
Note that “doing business” is undefined by the statute and could be construed to encompass a blockchain platform with nodes that operate in California or that collect data from Californian consumers (Id. § 1798.140(c)(1)).
Though the first prong of the CCPA threshold test is fairly self-explanatory, the second and third prongs are less straightforward. The mere act of hosting information on a blockchain could be considered “sharing” personal information, particularly when nodes are treated as “devices” under the second prong of the test. For example, the existence of 500 nodes on a blockchain network that all maintain a copy of the ledger may constitute “sharing” under the statute (although there is currently no regulatory guidance on this topic).
The definition of “selling” is also very broad. It includes “renting, releasing, disclosing, disseminating, making available, transferring, or otherwise communicating orally, in writing, or by electronic or other means” personal information for “other valuable consideration.” (Cal. Civ. Code § 1798.140(t)(1)). What constitutes “other valuable consideration” remains unspecified.
Therefore, it appears from the facial language of the statute that blockchain companies could be considered to be “selling” personal information simply by hosting and operating a blockchain platform through which people and entities can exchange personal information — particularly if the blockchain company charges a fee (whether in tokens operable on the blockchain or some other form of external consideration) to access the blockchain or derives other “valuable consideration” from the hosting and operating of a platform that facilitates personal information exchange.
Similarly, it is possible that node operators or miners in a blockchain environment who receive tokens or cryptocurrency in exchange for performing transaction validation or ledger confirmation services to the network would be similarly considered to be “selling” because they are “communicating [...] by electronic or other means” personal information that is written to the blockchain. If a covered business is found to be “selling” personal information, additional notice, disclosure and other obligations will apply — even if the business has not engaged in what would traditionally be considered a “sale” for monetary consideration.
More, while pseudonymization may help obfuscate data, it does not render the subject data nonpersonal. Because the statute applies to personal information that is “capable of being associated with, or could reasonably be linked, directly or indirectly” with the individual, such techniques may prove insufficient due to the risk of reidentification.
How can a blockchain business best address compliance with the CCPA?
Businesses that deploy blockchain technology should carefully consider the extent to which personal information is written to blockchain-based ledgers and whether there are ways to mitigate the problems that arise from this appertaining to the demands and requirements of the CCPA.
For example, businesses might consider storing personal information off-chain (i.e., not on the blockchain) while using the ledger to track and mediate access to the personal information. This type of solution could enable the business to directly reference the off-chain personal information for reporting obligations under the CCPA while maintaining the integrity of its ledger, and without necessarily putting the data on-chain, such that the business could not delete that data upon request. In this scenario, deletion is simple: By simply taking the data off-chain, any immutable references on-chain become references to nonexistent data and are rendered meaningless.
However, off-chain workarounds can add unwanted complexity that is at odds with many blockchain platforms’ goals of simplicity and transparency. Furthermore, these workarounds often fail to solve the security concerns presented by having parallel data sources in the status quo that blockchain-based solutions so elegantly address.
If an off-chain solution is impractical, blockchain businesses could consider taking all data obfuscation steps available to depersonalize the data as much as possible (e.g., applying salting, encryption and hashing techniques to all on-chain data). However, data on the blockchain is almost always associated with a ledger’s public key (i.e., ledger address) and is therefore connected to the person or entity that was adding data to that address. Accordingly, public keys could be deemed “personal information” under the CCPA to the extent that they belong to or can be tied to a California consumer.
Finally, businesses should begin taking steps to comply with the CCPA as soon as possible: In a 2018 conversation at Perkins Coie LLP, Eleanor Blume, the special assistant to the California Office of the Attorney General, emphasized that companies would be evaluated on their CCPA compliance in part by the preventative measures they took in 2019.
The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This discussion is not intended as legal advice.
This article was co-authored by Joe Cutler, Charlyn Ho, Anna C. Mourlam, Marina Gatto and Thea Percival.
South Korean cryptocurrency exchange Coinone has released a set of criteria for digital currency projects to be listed on the exchange.
South Korean cryptocurrency exchange Coinone has released a set of criteria for determining whether to list new digital currency projects on the exchange.
In a blog post published on Aug. 8, Coinone described nine criteria cryptocurrency projects should comply with in order to be listed on the exchange. Coinone will specifically consider such issues as sustainability of business models, transparency of governance, token distribution plan, vision and value, market size, use case, team formation, roadmap achievement rate and marketability.
Focus on the South Korean market
In detailing the criteria, Coinone stressed that a crypto project should have a South Korean market-focused business plan, since the majority of its users are local citizens. Coinone also emphasized that it thoroughly examines the organization of the governance structure of listed projects and associated risks.
Apart from that, Coinone says that it considers a token's future distribution plan, in addition to the project’s token issuance and circulation. Crypto projects also need to have a clear idea for what value they can offer compared with existing products and services in the market they are replacing.
“Since CoinOne generates revenue only from the fees incurred from transactions, we intend to list projects that can naturally generate trading volume as the project grows,” Coinone wrote.
Gradual expansion of services
The development comes in the wake of Coinone’s announcement on Aug. 7, in which it revealed a partnership with cybersecurity audit company CertiK and disclosures company Xangle to provide more safety and transparency for their crypto investors.
In April, Coinone announced its plans to expand with the launch of an exchange in Indonesia. The exchange’s Indonesian branch was initially set to support six cryptocurrencies: Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), Ethereum Classic (ETC), Litecoin (LTC) and Quantum (QAU).
The 25 largest crypto markets comprise roughly 94.40% of the capitalization of the combined market cap.
With Bitcoin regaining market dominance of over two-thirds of the entire combined cryptocurrency capitalization, discussions regarding market share of prominent altcoins have largely left the dominant cryptocurrency discourse. Here is a different outlook on the market and on how the top cryptocurrencies stack up with the rest.
Market dominance flows from alts to BTC since 2018
Market dominance between the top cryptocurrencies by market capitalization has changed over the last year. As of Aug. 19, 2018, as seen in the chart below, the three largest coins comprised 71.95% of the combined cryptocurrency market — an 8% difference to the figures seen now. Meanwhile, the top 15 cryptocurrencies of 2019 are still seeing more dominance than the top 20 of 2018, which represented 90.53%, and the top 25, which came to 91.53%.
One year ago, the 18 largest markets, comprising 1% of the 1,770 cryptocurrencies that were then-listed on CoinMarketCap, represented 89.85% of existing cryptocurrency wealth, while the remaining 99% comprised 10.15% — an 80% greater share than the 5.60% represented by 99% of the digital currency markets today. Compared with 12 months ago, the crypto markets show a redistribution of market dominance from altcoins back to Bitcoin (BTC), with the four largest altcoins among crypto assets posting the largest decline in market dominance.
Currently, the four largest altcoins comprise 15.7% of the combined crypto market cap, a 42% drop from the 27.07% represented by the top four altcoins in August 2018. Additionally, the market share represented by the fifth- to the 14th-largest alternative cryptocurrencies has slipped from 9.85% of the total crypto value to 8.03%, while the 15th- to 24th-largest altcoins has fallen from 2.97% to 2.26%
BTC, ETH and XRP comprise 80% of combined crypto market cap
Bitcoin currently boasts a capitalization of roughly $179.55 billion, comprising 68.41% of the combined crypto capitalization of $262.45 billion. BTC’s market cap is up by 60% from $112,03 billion 12 months ago, with market dominance gaining by roughly one-third from 51.64%.
Roughly $21 billion worth of BTC changed hands during the previous 24 hours, comprising 33.02% of the combined cryptocurrency trade volume and ranking it as the second most traded crypto asset.
Ether (ETH) is the second-largest market by capitalization, currently representing 7.55% of the combined crypto market cap with $19.80 billion. Ethereum’s market cap has fallen by 35% from $30.51 billion alongside a 46% drop in market dominance from 14.07%. During the last 24 hours, $7.88 billion worth of ETH was traded, ranking it as the third most traded cryptocurrency at 12.12% of all trades.
The third-largest market by capitalization, XRP, comprises 4.26% of the total combined capitalization, with a market cap of $11.18 billion. Year-over-year, XRP has posted a 17% drop in capitalization from $13.54 billion, and a 32% loss in market dominance from 6.24%.
Approximately $1.11 billion worth of XRP changed hands during the past 24 hours, representing 1.72% of all cryptocurrency trades and ranking XRP as the seventh most traded crypto asset. XRP is currently trading for roughly $0.26.
The five largest altcoins represent 17% of total crypto value
Bitcoin Cash (BCH) is the fourth-largest crypto asset by capitalization, comprising 2.10% of the combined crypto market cap with $5.25 billion. In one year, BCH has shed 44% of its capitalization from $9,86 billion, while also posting a 54% drop in market dominance from 4.54%. In the last 24 hours, $1.81 billion worth of BCH changed hands, representing 2.74% of all trades and ranking it as the fifth most traded cryptocurrency.
Litecoin (LTC) is currently ranked fifth by capitalization with $4.70 billion, comprising 1.62% of the total market cap of all cryptocurrencies. LTC’s market cap has increased by 40% from $3.36 billion over 12 months, alongside a roughly 4.50% increase in market share from 1.44%. Litecoin is the fourth most traded crypto asset, with a 24-hour trade volume of $3.18 billion, and with LTC pairings representing 4.92% of all cryptocurrency trades.
Binance Coin (BNB) has a market cap of $4.25 billion, representing 1.62% of the total value of all cryptocurrencies and ranking it as the sixth-largest crypto asset. Among the top-15 crypto assets of by market cap, BNB is the strongest-gaining market of the past 12 months, ascending 11 rankings amid a 338% increase in capitalization from $970 million and a 260% gain in dominance from 0.45%. BNB is the 13th most traded market, with $294 million worth of Binance Coin changing hands during the past 24 hours, representing 0.45% of all crypto trades.
BTC-USDT pairings account for 67% of all crypto trades
Tether (USDT) currently represents 1.55% of the combined cryptocurrency market cap, with a capitalization of $4.07 billion. Tether has gained one rank — from eighth to seventh — in the last 12 months, due to a 49% increase in market cap from $2.73 billion and a 24% increase in dominance from 1.25%. USDT is the most traded crypto asset, with a 24-hour volume of $21.6 billion. As such, USDT pairings represent 33.71% of cryptocurrency trades.
EOS is the eighth-largest cryptocurrency, representing 1.25% of the combined crypto market cap with a capitalization of roughly $3.29 billion. In 12 months, EOS has slipped three places from the fifth-ranked crypto asset amid a 31% drop in market cap from $4.81 billion alongside a 44% fall in dominance from 2.22%.
Bitcoin SV (BSV) is the ninth-largest crypto asset with a market cap of $2.41 billion, comprising 0.92% of all cryptocurrency value. BSV is the 12th most traded cryptocurrency, representing 0.51% of all trades and with $330 million worth of BSV changing hands during the last 24 hours.
Monero (XMR) currently ranks 10th by market cap, with a capitalization of $1.37 billion, comprising 0.52% of the combined cryptocurrency market cap. XMR has retained its ranking from 2018 despite a 15% drop in capitalization from $1.61 billion and a 30% drop in market dominance.
Some altcoins have lost market share since 2018
Stellar’s Lumen (XLM) is the 11th-ranked crypto asset by market cap, representing 0.51% of cryptocurrency value with a capitalization of roughly $1.35 billion. In one year, XLM has fallen five places from sixth amid a 68% drop in market cap from $4,18 billion and a 73% loss of market share from 1.92%.
Utility token Unus Sed Leo (LEO) comprises the 12th-largest crypto asset with a capitalization of roughly $1.21 billion. It was just launched in May 2019, equating to 0.46% of the combined cryptocurrency market cap.
Cardano’s ADA currently posts a market cap of $1.18 billion, representing 0.45% of the combined cryptocurrency capitalization and ranking ADA as the 13th-largest digital asset. In 12 months, ADA has fallen four places from the ninth-largest crypto asset alongside a 56% drop in market cap from $2.66 billion and a 63% drop in dominance from 1.22%.
Tron’s TRX is the 14th-largest market, representing 0.43% of the combined cryptocurrency capitalization with a market cap of $1.13 billion. TRX has slid two places since ranking 12th one year ago amid a 23% drop in capitalization from $1.46 billion. TRX has also posted a 36% drop in market share from 0.67%. TRX is the 10th most traded crypto asset, with TRX pairings equalling $481.63 million in 24-hour trade volume.
Dash (DASH) comprises the 15th-largest crypto asset, representing 0.32% of the total crypto capitalization with a market cap of nearly $842.36 million. In 12 months, Dash has slipped one position, while posting a 34% drop from 1.28 billion and a 46% reduction in market dominance from 0.59%. Dash pairings equate 0.26% of all cryptocurrency trades, with a 24-hour trade volume of roughly $170.28 million.
BNB and LINK post strongest 12-month performance among top cryptos
Chainlink (LINK) is the 16th-largest crypto asset with a capitalization of $809.02 million, representing 0.31% of the combined cryptocurrency market cap. Of the top 25 cryptocurrencies by capitalization, Chainlink has posted the strongest performance since August 2018, gaining roughly 665% in market cap from $105.79 million alongside a 532% gain in dominance from nearly 0.05%.
The 17th-ranked cryptocurrency by market cap, Tezos (XTZ), represents 0.30% of cryptocurrency value with a capitalization of $780.90 million. Tezos has gained one rank in 12 months despite a 6% loss in market cap from $833.02 million and a 21% reduction in dominance from 0.38%.
Neo (NEO) has a market dominance of 0.26%, ranking as the 18th-largest cryptocurrency with a capitalization of approximately $682.52 million. In one year, Neo has fallen three ranks from 15th to post a 46% drop in market cap from $1.27 billion and a 55% reduction in dominance from 0.58%. NEO is the 14th most-traded crypto asset, with Neo’s 24-hour trade volume of $294.80 million accounting for 0.44% of all cryptocurrency trades.
Iota’s MIOTA is the 19th-largest cryptocurrency, representing 0.25% of the combined crypto capitalization with a market cap of nearly $663,83 million. Since August 2018, MIOTA has fallen eight positions from the 11th-largest crypto asset amid a 56% slide in capitalization from $1.50 billion and a 64% drop in dominance from 0.69%. MIOTA is the 77th most traded cryptocurrency, with Iota’s 24-hour trade volume of $6.13 million.
Ethereum Classic (ETC) is the 20th-ranked crypto asset by market cap with a capitalization of $622.12 million, comprising 0.24% of the total value of the combined cryptocurrency markets. ETC has fallen seven positions from 13th alongside a 55% drop in capitalization from $1.39 billion and a 62.5% reduction in market share from 0.64%. ETC pairings represent 0.75% of all cryptocurrency trades, with ETC ranking as the ninth most traded digital asset with a 24-hour trade volume of $479.51 million.
The cryptocurrencies that are ranked 20-25 in the list (ATOM, XEM, MKR, USDC and CRO) represent 0.9% of the total cryptocurrency market value with a capitalization of just over $2,339 million. Their 24-hour trade volumes come to around $320 million.
Over 2,425 crypto markets represent less than 6% of total cap
Of the 2,450 cryptocurrencies currently listed on CoinMarketCap, the 25 largest cryptocurrencies, comprising 1% of the total number of crypto assets, represent 94.40% of the combined value manifest in the total combined digital currency markets. As such, the remaining 99% of all crypto assets comprise just 5.60% of the total value currently manifested in the cryptocurrency markets.
One year ago, 99% of altcoins comprised over 10% of the entire crypto capitalization, signalling that many alternative cryptocurrencies have struggled to regain strength following the 2018 bear market. Further, the 10 largest altcoins have given approximately one-third of their market share back to BTC, dropping from 34% of the combined crypto capitalization to roughly 22% today.
South Korea’s “Bit-Island” Jeju announced the Blockchain Hub City Development Research Service.
South Korea’s “Bit-Island” Jeju announced the Blockchain Hub City Development Research Service on Aug. 13.
An island with blockchain ambitions
Local news outlet JejuDomin reported on Aug. 14 that Jeju announced the Blockchain Hub City Development Research Service on Aug. 13. Furthermore, the author of the report stated that cloud services provider Tilon will carry the research. Per the report, the budget meant to cover the costs of the project amounts to 175 million won (nearly $145,000).
In April local news outlet BusinessKorea reported that Busan — South Korea’s second most populous city — has been picked over Jeju as the preferred location for South Korea’s blockchain regulation-free zone.
The island that does not surrender
Jeju previously hoped to become the local initial coin offering (ICO) hub, after being granted the status of regulation-free zone. Still, the latest developments show that the island is still fighting for relevance in the blockchain and cryptocurrency industry.
As part of the project, parties involved will reportedly analyze and investigate advanced use cases for blockchain technology and derived services, and also develop a blockchain service model suitable for Jeju Island. Future strategy director of Jeju Island Noh Hee-seop commented on the development:
“We expect that this research service will contribute to the establishment of Jeju as a blockchain hub city that maximizes the potential of blockchain technology, the core technology of the 4th Industrial Revolution.”
After first banning ICOs in September 2017, South Korean state financial regulator the Financial Services Commission announced that it will not lift its ban on ICOs in the country at the end of January.
Busan looks to release local crypto
As Cointelegraph reported in July, Busan city authorities are seeking to develop a blockchain-based digital currency project in collaboration with BNK Busan Bank, a subsidiary of local holding company BNK Financial Group.
The white hat hacker who compromised crypto exchange Binance Jersey's domain name and Twitter account will be compensated for cooperation.
Cryptocurrency exchange Binance will compensate the white hat hacker who compromised Binance Jersey’s Internet domain name and Twitter account.
Binance Jersey Twitter and domain compromised
In a post published on Aug. 16, crypto exchange Binance Jersey announced that a white hat hacker was able to gain access to the @BinanceJE Twitter account (the official Binance Jersey profile) and the platform’s Internet domain name. Still, the company was able to recover the domain name within a few minutes, and the Twitter handle in some hours.
Per the announcement, the hacker obtained access “by social engineering the email domain name service provider,” and then posted a few tweets from the company’s official account, deleting them later. Furthermore, the hacker was reportedly cooperative and open during his communication with the exchange’s security team, which allowed for the quick recovery of the Twitter account. The firm notes:
“We were able to restore the domain name within a few minutes and the Twitter handle a couple of hours later. We will issue a security bug bounty to the white hat hacker, as well as investigate the incident further with our service provider. [...] All funds on Binance.JE are safe. No data was compromised.”
Screenshot of one of the tweets | Telegram channel Diddycarter's ANN Channel
In one of the tweets from another account, reportedly controlled by the same hacker, they asked Binance CEO Changpeng Zhao to contact them personally. At press time, all of the hacker’s tweets have been deleted from Binance Jersey’s Twitter profile.
As Cointelegraph recently reported, the native token of crypto exchange Binance soared around 11%, despite the fresh rumors of a possible Know Your Customer data leak affecting exchange’s users.
Panama to see increased Bitcoin retail penetration through the Chainzilla and Pundi X combined efforts in the field of the blockchain point-of-sale payments.
Cryptocurrency startup Pundi X announced that its point-of-sale payment gateway (XPOS) will soon be launched in Panama and its surrounding regions. Blockchain development company Chainzilla joined the initiative as a local distributor.
Combining cryptocurrency and traditional payments in one terminal
On Aug. 14, Cointelegraph in Spanish spoke with Chainzilla CEO, Charles Gonzales, to find out more details. According to Gonzales:
"Recently, Pundi X integrated its module into the Verifone X990. This is an important development because this payment processor is compatible with both cryptocurrency and traditional payments. [...] That means that a seller can process crypto payments alongside other Visa and Mastercard payments, it's all in one device.”
As well as acting as the distributor of the XPOS terminals in Panama, Chainzilla will launch tools for merchants to immediately convert their Bitcoin (BTC) and other cryptocurrency payments into the local currency or stablecoins.
Opportunities through education
The first of the new payment processors will arrive in Panama in two weeks and will be demonstrated by Chainzilla at Revolve Summit for entrepreneurs. Chainzilla will also offer the first blockchain course in the country with the help of Panama’s Chamber of Digital Commerce and Blockchain, along with education startup The Blockchain Space, in October 2019.
When asked about the fintech scene in Panama, Gonzales replied:
"The fintech sector is fragmented in Latin America. Each country acts as an island that has its own regulations, which are often different from those of its neighboring countries. This creates difficulties in developing international services. These challenges are difficult and they will take time to resolve but it all starts with education. That’s why we’re focusing on educating the people, companies, and government entities we interact with."
As Cointelegraph reported, it was only last month that Pundi X integrated its crypto payment module into the Verifone device.
Creditors of now-defunct crypto exchange QuadrigaCX are requesting information concerning the recent loss of 103 Bitcoins during the funds' recovery.
Users of now-defunct Canadian cryptocurrency exchange QuadrigaCX are requesting further information concerning the recent loss of 103 Bitcoins (BTC) during the funds' recovery.
An unfortunate loss
As Cointelegraph reported in February, one of the Big Four accounting firms — EY (formerly branded as Ernst & Young) — was appointed by QuadrigaCX as an independent third party to monitor the proceedings in a creditor protection case.
Ey announced at the time that “Quadriga inadvertently transferred 103 Bitcoins valued at approximately $468,675 to Quadriga cold wallets, which the Company is currently unable to access.” Currently, the coins would be worth $1 million.
Industry news outlet Coindesk reported on Aug. 16 that — six months after the accident — the auditor has not yet given any insightful information concerning how the loss occurred.
According to the article, all the information disclosed came from the report released by EY in February, in which the company declares that the loss was caused by a platform setting error. QuadrigaCX creditor Ali Mousavi told the outlet:
“This sounds like gross negligence to us and many of us want to hold EY accountable for what happened. [...] Instead of giving us the details, they [struck] a deal with [law firm Miller Thomson] to keep the details confidential and [are] making it harder for us to hold EY accountable.”
Creditors want a different legal firm
Creditor Xitong Zou also said that “EY does not seem like they want to explain what happened when that’s the very least they could do” since “it was our money, after all.” He also claims:
“A lot of people want [Miller Thomson] replaced. [...] Although I don’t think that’s going to happen.”
EY has reportedly recovered about $25 million, with a judge awarding $1.6 million in fees and costs to all the firms involved in the case. The auditor also aims to raise another $9 million by selling assets of the exchange’s CEO.
As Cointelegraph reported in a dedicated follow-up piece, the crypto community has recently been actively discussing the fate of QuadrigaCX’s 30-year-old founder, Gerald Cotten, who reportedly died in India from a fatal disease in December 2018.
Recently, Cointelegraph also recounted the biggest alleged crypto heists.
Is the fall in Bitcoin over and should investors buy now, or will it plunge below $9,000? Let’s analyze the charts.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
Market data is provided by the HitBTC exchange.
The global amount of debt with negative yields ballooned up to $15 trillion, according to Deutsche Bank. Though yields in the United States are still in the green, President Donald Trump has been pressing the Fed to cut rates aggressively. If the US also joins the negative yield bandwagon, cryptocurrencies are likely to surge.
Coinbase CEO Brian Armstrong said that institutional investors are taking a great interest in cryptocurrencies. According to him, $200–$400 million in crypto deposits are made every week. This is only a very small portion of the institutional money, but if global geopolitical issues and currency wars escalate, we expect a greater inflow down the line.
Fundstrat Global Advisors’ Tom Lee believes that Bitcoin (BTC) “is just resting,” and potentially could make a dash toward new highs by the end of 2019. Bitcoin’s uncorrelated nature to equities and bonds nature makes it an attractive bet for anyone who wants to hedge their portfolio. So, should traders buy the current dip or will prices fall further? Let’s analyze the charts.
Bitcoin (BTC) bounced back from $9,517.57 on Aug. 15, which is a positive sign. It shows that bulls are keen to buy on dips closer to strong support. While aggressive bulls might have purchased the first dip, it would be interesting to see whether the rebound withstands or fizzles out.
If the BTC/USD pair does not scale above both moving averages within the next couple of days, we might see another dip to $9,080. Repeated dips to a support level weaken it. If this level cracks, the next level to watch on the downside is $7,451.63. Such a move will dampen sentiment and might delay the next leg of the upward movement.
However, if the next dip to $9,080 will be aggressively bought, we might suggest long positions once again because it will offer a low-risk buying opportunity. The first target on the upside is $12,000, above which a retest of the yearly high is likely to happen, but if bulls fail to scale above $12,000, the cryptocurrency might remain range-bound for a few days. Both moving averages are flat and RSI is just below 50, which suggests a balance between buyers and sellers. Hence, we are currently neutral on the pair.
Ether (ETH) broke below the critical support of $192.945 on Aug. 14. This is a bearish sign because it opens the door for a fall to the next support at $164. Both moving averages have turned down, and RSI is close to oversold levels, which suggests that bears are in command.
Currently, bulls are attempting to propel the ETH/USD pair back above $192.945. An attempt to recover will face resistance at 20-day EMA and later at 50-day SMA. If both of these resistances are crossed, the pair can move up to $320.84. We will watch the price action for the next few days and recommend a long position if we find that buyers are back in action.
XRP plummeted below the critical support of $0.27795 on Aug. 14 and fell to a new yearly low of $0.225 on Aug. 15, which is a bearish sign. This shows that bulls anticipate even lower levels in the future, hence, they are not buying aggressively.
Both moving averages are trending down, and RSI is in oversold territory, which shows that bears are firmly in command. However, after breaking down a major level, we usually see a pullback rally. If bulls can quickly push the price back above $0.27795, it will indicate that the current breakdown was a bear trap and it might offer a buying opportunity. Nonetheless, if the XRP/USD pair turns down from $0.27795, it is likely to resume its downward movement toward its target objective of $0.19.
The failure to break out of $345.8 on Aug. 14 attracted sellers, and Bitcoin Cash (BCH) fell to the neckline of the head and shoulders (H&S) pattern, triggering out suggested stop loss. Though bulls defended the neckline, failure to push the price above 20-day EMA might attract another round of selling. The next drop to the neckline is likely to break it.
If the BCH/USD pair breaks down and closes (UTC time) below the neckline, it will complete the H&S pattern. Though the target objective of this bearish pattern is much lower, we expect some buying close to $166.98. Contrary to our assumption, if the pair breaks out of $360, it is likely to move up to $428.54 and above it — to $500. We would wait for the cryptocurrency to sustain itself above $360 before recommending the long positions again.
Litecoin (LTC) broke below the critical support of $76.7143 on Aug. 14. Though it held 61.8% Fibonacci retracement level of the rally, bulls have not been able to push it back above $76.7143, which is a bearish sign.
Both moving averages are trending down, and RSI is close to oversold territory, which shows that the path of least resistance is to the downside. On a drop below $69.9227, the LTC/USD pair can slide to $58.
Our bearish view will be negated if the pair reverses direction from current levels and breaks out of 20-day EMA. That will be the first sign that levels have become attractive for buyers again.
Binance Coin (BNB) has entered into a consolidation in an uptrend. Though it is below both moving averages, the bears could not break it below the minor support of $26.202, which is a positive sign. This shows that investors are not dumping their positions yet.
However, if the BNB/USD pair breaks down of $26.202, it can dip to $24.1709, which is a strong support. If this support gives way, some traders might dump their positions. The next support on the downside is at $18.3.
On the other hand, if the pair bounces off $26.202 or from $24.1709, it can rally to $32. We will turn positive if bulls propel the price above $32.5. We will wait for the uptrend to resume before recommending a long position in it.
EOS is consolidating in a downtrend. The bulls purchased the dip to the critical support of $3.3 on Aug. 15, which is a positive sign. However, unless the price quickly bounces above 20-day EMA, we anticipate bears to make another attempt to break below the support. The downsloping moving averages and RSI close to oversold zone show that bears are in the driver’s seat. If the support at $3.3 cracks, the downtrend can extend to $2.2.
Contrary to our assumption, if bulls defend the support at $3.3, the EOS/USD pair might move up to 20-day EMA and above it to the top of the range at $4.8719. We will turn positive if the price breaks out and sustains above $4.8719 as it will indicate the start of a new uptrend. Until then, we remain neutral on the cryptocurrency.
Bitcoin SV (BSV) broke below the support of $136.89 on Aug. 14, but bears have not been able to sink the price to $107 as we had anticipated. The bulls purchased the dip to $123.67 and are attempting to push the price above $136.89.
If successful, the BSV/USD pair might remain range-bound between $136.89 and $160.35 for the next few days. A breakout of $160.35 can carry the price to $188.69. On the other hand, if the price turns down either from $136.89 or from 20-day EMA, it can slide to the critical support of $107. We suggest traders wait for the trend to turn bullish before buying.
Monero (XMR) broke below the ascending channel and plunged close to the next support of $72 on Aug. 15, thus triggering our recommended stop loss of $77. The previous support line of the channel is now likely to act as a resistance.
If bulls fail to re-enter the channel within the next couple of days, the XMR/USD pair will again decline to $72. If this support breaks, the next level to watch on the downside is $60. Both moving averages have started to slope down and RSI has also dipped into the negative zone, which suggests that bears have the upper hand.
Conversely, if support at $83 holds, the pair might remain range-bound for the next few days. On the upside, a breakout of the moving averages can carry the price to $98.2939. We will wait for a new buy setup to form before proposing a long position in it once again.
Stellar (XLM) has broken down from the critical support at $0.072545. Both moving averages are sloping down and RSI is in the oversold zone, which shows that bears are in command.
If the price sustains below $0.072545, the digital currency will start a new downtrend that can extend the slide to $0.05.
Our bearish view will be invalidated if the XLM/USD pair quickly turns around and climbs above $0.072545, which will indicate buying at lower levels. In a downtrend, though the price might look attractive, it is difficult to predict where the bottom will form. Usually, downtrends don’t end without panic selling. Therefore, we suggest traders wait for the decline to end before turning positive.
Market data is provided by the HitBTC exchange.
The New York Federal Court has allowed Blockchain.com’s trademark infringement lawsuit against Paymium’s “blockchain.io” to proceed.
The New York Federal Court denied the motion to dismiss the ruling in the trademark infringement action by cryptocurrency wallet and exchange operator Blockchain.com against fintech startup Paymium and its CEO Pierre Noizat over the use of domain “blockchain.io”.
According to the court documents published on Aug. 7, the lawsuit, originally filed by Blockchain.com in September 2018, claimed that Paymium and its Blockchain.io platform not only infringed on the trademark, but also were involved in alleged unfair competition and false advertising.
Blockchain versus Blockchain
In February 2019, Paymium moved a motion “to dismiss the amended complaint for failure to state a claim upon which relief can be granted [...] and for lack of personal jurisdiction over Pierre Noizat.”
In its turn, Blockchain.com successfully managed to argue that their marks were not inherently descriptive and acquired secondary meaning, and that Blockchain.com and Blockchain.io marks were substantially similar enough for the case to proceed.
The New York Federal Court denied the trademark infringement part of the Paymium’s motion and allowed the suit to continue.
You don’t mess with the SEC
The court also found Paymium’s advertising claims that the “filing has been accepted and [it is] now registered with the SEC!” to be false, so this part stays in the lawsuit too.
In reality, the only thing the startup registered at that time with the U.S. Securities and Exchange Commission was a Form D. Blockchain.com argued that “the filing of a Form D does not mean that a security is ‘registered’ or that it has been in any way scrutinized or approved by the SEC.” The court agreed.
At the same time, all claims against Pierre Noizat were dismissed due to the actual lack of personal jurisdiction. The court also argued that the advertising of “hack-free status and atomic swaps” was not false.
Recently, Cointelegraph reported that IT giant Oracle sued blockchain startup CryptoOracle alleging trademark infringement and cybersquatting in the Northern District of California.
Nexo paid out $2,409,574.87 to token holders and reported an annualized dividend yield of 12.73%.
Crypto lending firm Nexo has paid its token holders a total of $2,409,574.87 in dividends, reaching an annualized dividend yield of 12.73%.
Nexo announced the completion of its dividend payments in a press release on Aug. 16. According to the press release, Nexo has a user base of over 250,000. Moreover, Nexo’s dividend yield is purportedly higher than every dividend-paying stock listed on the S&P 500 market index.
Nexo apparently pays out its total dividend in two parts — 50% comes from the Nexo Base Dividend and the other 50% from the Nexo Loyalty Dividend. Nexo claims that its model is designed to reward long-term investor confidence and decrease market volatility following dividend payouts.
The Nexo MasterCard
As noted in the press release, Nexo unveiled a MasterCard-branded credit card for crypto on Aug. 2. In its announcement, Nexo claimed its Nexo Card was the first in the world to let users pay in cryptocurrency without actually spending it. Nexo elaborated:
“When using the Nexo Card to purchase goods and services, you actually pay using your Nexo flexible open-ended revolving credit line that is backed with your crypto holdings and thus not selling any of them, which is giving you the freedom to spend today and sell your holdings whenever you want in the future to pay back the loan.”
Dividend payments through tZERO
Earlier this week, tZERO, the blockchain-based subsidiary of the retailer Overstock, announced the opening of the company’s preferred equity security tokens to non-accredited investors. This allows non-accredited token holders to earn money through company dividends. Per the announcement, tZERO said it might distribute a quarterly dividend of 10% of the company’s adjusted gross revenue. Moreover, the company said it was considering paying out dividends in more than just the United States dollar, with Bitcoin (BTC), Ether (ETH) and other security tokens being possible modes of payment.
A Bitcoin SV developer has announced chatting and consulting services for other Bitcoin SV devs seeking help.
Bitcoin SV blockchain developer and blockchain organization service Open Directory creator synfonaut has launched a consulting service called Office Hours. This service connects developers in need of assistance with experienced Bitcoin SV developers for help on Bitcoin SV projects.
Synfonaut announced the service’s launch in a Twitter post on Aug. 15. As per the platform’s website, users can reach out to over a dozen professional developers for help on a product or service. This apparently provides a way to chat with a knowledgeable dev, in sessions that typically take an hour.
The website also provides a separate section, with many of the same devs, for those seeking more in-depth consulting. According to the website’s description, this offering is a paid service for ongoing help or for simply hiring a developer to create a project themselves.
More developer support
As reported by Cointelegraph in May, New York-based blockchain firm ConsenSys has released a support kit for prospective Ethereum blockchain developers.
In August, blockchain development company Truffle announced at its annual developer conference that its fully managed suite will support the blockchain protocols Corda, Hyperledger Fabric and Tezos. At the time of the announcement, Truffle’s suite only supported Ethereum and Quorum.
Bitcoin SV Blockchain for Weather Data
As of June of this year, the vast majority of transactions on the Bitcoin SV blockchain in June were for weather-related transactions, as reported by Cointelegraph. These transactions, which accounted for 98% of all transactions over a 30 day period, were used in the Bitcoin SV-backed weather app WeatherSV. This app is apparently a paid subscription service that pulls data off of the website OpenWeatherMap.org every hour.
A branch of U.S. Customs and Border Protection will test blockchain-based shipping for licensed shipping partners.
A United States Customs and Border Protection (CBP) advisory committee is planning to launch a live test of its blockchain-based intellectual property rights proof of concept.
The Commercial Customs Operations Advisory Committee (COAC) will run its tests from late August to late September, per a report published on the CBP’s website. The COAC advises the Secretaries of the Department of the Treasury and Department of Homeland Security.
The announcement specifically comes by way of COAC’s Next Generation Facilitation Subcommittee, an entity comprised of four working groups that aim to improve trade and government within the CBP.
Currently, the subcommittee is involved in three ongoing proof-of-concept projects involving blockchain technology. One of these is called the “Intellectual Property Rights Proof of Concept,” which is an attempt to run shipments via blockchain, relying on pre-existing licensor and sublicensee relationships.
According to the COAC’s most recent report, this particular proof of concept will undergo live testing starting in August:
“The working group has been active with the current POC on IPR. Since the last in person meeting in March, the working group has progressed through the overall project design, implementation of the initial engineering plan, and integration of Trade and CBP systems. Live testing of the system will start at the end of August and conclude late September.”
Prior blockchain shipment testing
As previously reported by Cointelegraph, the CBP ran a live test for a blockchain-based shipping project back in 2018. This project tested a blockchain-based system for tracking shipments. The system itself reportedly was a combination of CBP’s legacy application and a blockchain-based platform developed by the Department of Homeland Security.
Vincent Annunziato, the director of the CBP’s Transformation & Innovation Division, remarked that he believed blockchain platforms were insufficiently compatible with each other. As part of the testing, the CBP reportedly intended to set standards of interactions between different blockchains, so that all firms and software could easily connect to customs in the future.
FinCEN director Kenneth Blanco urged casinos to follow the agency’s guidelines in regards to suspicious convertible virtual currency activity.
Kenneth A. Blanco, the director of the Financial Crimes Enforcement Network (FinCEN), has urged casinos to follow the agency’s guidelines in regards to suspicious convertible virtual currency (CVC) activity.
During his speech at the 12th Annual Las Vegas Anti-Money Laundering Conference on Aug. 13, Blanco addressed casinos’ compliance with the FinCEN’s guidance released in May. In their guidance, the FinCEN considered certain business models involving CVC financial institutions to help them comply with their existing obligations under the Bank Secrecy Act (BSA). The guidance, however, did not establish any new regulatory expectations or requirements.
A gap in reporting
Blanco specified two areas where CVC intersects with casinos and card clubs, which are online CVC casinos as well as physical casinos and card clubs that accept CVC for gaming. Blanco noted that casinos dealing with cryptocurrencies should consider how they will conduct due diligence on CVC transactions and blockchain analytics and how they will incorporate CVC-related indicators into their SAR filings.
Blanco stressed that a gap in reporting by casinos remains an area of concern, explaining:
“I encourage casinos to closely review both documents on FinCEN’s website to see how we are addressing this industry and its interactions with others in the financial sector. Casinos should be filing SARs when they encounter suspicious CVC activity and any cyber events that affect, facilitate, or conduct transactions. We know that casinos are targets for cyber and cyber-enabled criminal activity such as ransomware attacks and business e-mail compromise schemes.”
International level concerns
In June, a United Kingdom crypto advocacy center advised looking to the FinCEN’s interpretive guidance in regard to the BSA and crypto assets as a benchmark for Her Majesty’s Treasury. The interpretation only brings individuals who have independent control over another person’s crypto assets under the purview of the BSA, excluding those who merely enable exchange or transmission — for example, open-source software developers, multiple-signature service providers, and decentralized exchange facilitators.
Last month, United States Treasury Secretary Steven Mnuchin shared President Donald Trump’s concerns on the use of cryptocurrency to finance illicit activity, and stressed the role of enforcing FinCEN regulations with respect to crypto-dealing organizations.
Who are the biggest hedge funds operating in crypto today and how much do they have invested in crypto and blockchain firms?
The total market cap for all cryptocurrencies stands at $293 billion, and while much of this value has been generated by individual traders buying and selling their own private stashes of crypto, it's also largely the result of big investment funds. These are companies that have crypto assets under management worth as much as $1 billion or upward, with most of them qualifying as the whales the cryptocurrency community often talks about after every market movement.
Yet, aside from simply trading Bitcoin, Ether or many other cryptocurrencies, funds also often invest venture capital (VC) in blockchain — and crypto-related startups. This makes them doubly important for the growth of the cryptocurrency industry, given that they support not only the currencies of the future, but also the platforms and companies that will harness these currencies to build entirely new financial ecosystems.
That said, most of funds have been backed by traditional venture capital, such as Andreessen Horowitz and Sequoia Capital. So, even though they are supporting the emergence of the new crypto economy, it will be one that will have strong, foundational links with the financial system — something many in the community think crypto will replace.
The top five
Obtaining reliable, standardized data on the assets under management of each major crypto fund is very difficult, if not impossible. Accordingly, this top five doesn't claim to be completely authoritative, given that it gleans available data from a variety of sources published at a variety of times. Nonetheless, it provides a fairly robust account of the five firms that are most likely the biggest funds operating in crypto today, in terms of digital assets under management and investments in crypto-related startups.
Digital Currency Group/Grayscale Investments
Digital Currency Group was founded in 2015 by Barry Silbert, who had previously invested in such early cryptocurrency companies as Coinbase, Ripple and BitPay. It already has invested in nearly 130 crypto-related projects, with the average size of seed rounds it was involved in between 2016 and 2018 being $3.24 million. Given that it has more investments than pretty much every other fund in the industry, it will be no surprise to hear that it has backed some of the most well-known crypto projects and companies, including Circle, Chainalysis, Blockchain, Shapeshift, Parity, Ledger, Luno, Kraken, Korbit and eToro.
One of its investments is Grayscale, a subsidiary of Digital Currency Group that invests directly in cryptocurrencies and digital assets. Grayscale announced in its Q2 2019 financial report that it had assets under management (AUM) worth $2.7 billion. As an indication of just how volatile the AUM figure can be, it also revealed that this number had tripled since the first quarter of 2019, with its dedicated Bitcoin Trust having increased 300% compared to the same time last year.
More revealingly, Grayscale's latest report also detailed how most demand for crypto investment comes from institutional investors — who have represented 84% of its client base since July 2018. As such, it's clear that, far from being a grassroots-based, decentralized ecosystem, crypto is already driven very much by big business and big money.
Founded in 2016 by cryptocurrency investor Olaf Carlson-Wee, Polychain Capital is another crypto-focused hedge fund that nonetheless has backing from noncrypto venture capitalists. Back at the end of 2014, it was reported that its AUM totalled $591.5 million, having plunged from a high at the end of 2017 of around $1 billion. However, data from Crypto Fund Research states that, as of June 2019, it has $967 million of cryptocurrency under management.
As with most other major funds, it also invests in blockchain- and crypto-related startups, with its tally of investments coming to 37 (according to Crunchbase). These include Coinbase, Kik, Celo and dYdX, which Polychain has been able to invest in thanks largely to the raising of around $175 million for its venture capital fund at the end of 2018.
One thing that's worth noting about Polychain Capital is that it has received significant backing for its venture capital and crypto funds from major VC firms. In 2017, it closed a $200 million funding round in which Sequoia Capital, Andreessen Horowitz and Union Square Ventures all participated. It is, therefore, as much a product of traditional finance as it is of the new cryptocurrency ecosystem.
Initially founded in 2003 and based in San Francisco, Pantera Capital was once a traditional investment fund, although it shifted its focus in 2013 to cryptocurrencies and blockchain projects. According to a range of estimates, it has assets under management worth anything from $335 million to $724 million, although this may have fluctuated in recent months. It has also invested a considerable sum in 72 crypto-related startups and projects, with it having raised at least $200 million in total from outside venture capital in order to fund such investments ($13 million in 2016, $25 million in 2017, and $175 million in 2018-2019).
Pantera Capital has backers from outside the cryptocurrency industry, which is significant insofar as it indicates not only mainstream interest in crypto but also the possibility that it may feel some kind of indirect pressure to invest in projects that would be more pleasing to its financial backers.
As for Pantera Capital's general outlook, it may come as no surprise to hear that the fund is very bullish on the future of cryptocurrency and blockchain. In July, its CEO and founder, Dan Morehead, predicted that Bitcoin may hit $42,000 by the end of year and that it could climb as high as $356,000 in a couple of years.
Despite this confidence, Pantera Capital is no stranger to setbacks. For instance, it admitted in December 2018 that it could be forced to pay refunds and fines for around 25% of its initial coin offering portfolio, given that roughly this proportion of the portfolio is likely in violating American securities laws. Similarly, during the 2018 bear market, its digital asset fund (i.e., its cryptocurrency fund) lost around 77% over the first 10 months of that year.
Launched in New York City in 2018 by former Goldman Sachs partner Michael Novogratz, Galaxy Digital is another hundred-million-dollar crypto hedge fund. As of the end of June 2019, its total assets under management is $393.3 million, having dipped from May's total of $421.6 million. During 2018, the fund posted a net loss on its balance sheet of $272.7 million, largely because of the bear market and crumbling crypto prices.
In addition to investments in cryptocurrency, Galaxy Digital has also invested in around 20 crypto-related projects, including Bakkt, BlockFi, Ripple, Block.one, BitFury, BitGo and Bitstamp. As with the other funds on this list, such ventures have been made possible by investments from noncrypto backers. That's because when Galaxy Digital launched in January 2018, it had not only $400 million of Novogratz's own capital but also raised a further $200 million by floating the company on Canada's TSX exchange.
While it's focused mostly on companies operating outside of the cryptocurrency sector, Andreessen Horowitz established its own crypto investment fund, called a16z. As of writing, a16z claims that its fund is worth $350 million, while back in June 2018, when it was launched, the total came to $300 million. This is a big figure in the context of the crypto industry, but compared to the $7 billion in assets that Andreessen Horowitz manages in total, it seems a little more modest. However, it's likely that the value of a16z has increased since May. More importantly, however, is the fact that a massive investment fund with $7 billion in AUM is also interested in crypto, which is a significant vote of confidence for the industry.
This vote of confidence doesn't derive only from direct investment in cryptocurrencies, however. Andreesseen Horowitz and a16z have also thrown venture capital at a range of cryptocurrency startups, spanning Coinbase, Maker, Filecoin, dYdX and CryptoKitties. For example, in August 2018, the fund, together with Polychain Capital, invested $105 million in blockchain-based cloud startup Dfinity, having already contributed a combined $61 million in a previous round in February of that year.
Even forgetting a16z, Andreesseen Horowitz is therefore heavily invested in the cryptocurrency industry and is one of the biggest funds operating in the space today. More encouragingly, recent events indicate that it wants to involve itself even more heavily in the sector — as in April of this year, it announced plans to restructure its entire business and register its employees as financial advisors. The reason? This would provide it with the legal basis to engage more in riskier ventures, such as cryptocurrencies.
Of course, these aren't the only big investment funds operating in crypto to the tune of hundreds of millions of dollars. Others include:
Union Square Ventures, which has around $256 million of cryptocurrency assets under management, according to Crypto Fund Research.
Blockchain Capital, which launched in 2018 and raised $150 million for its new fund in March 2018, bringing its total AUM to $250 million.
IDG Capital, which launched in China in 1992 and invests in noncrypto as well as crypto assets, and has $210 million digital assets under management.
BlockTower Capital, which launched in 2017 and has around $130 million in AUM (as of December 2018).
Boost VC, a California-based fund that launched in 2014, which has $95 million in AUM.
Fenbushi Capital, a China-based crypto fund that had $50 million in assets under management in early 2018.
These aren't the only significant funds working in the crypto industry. However, in a rigorous study published in May 2019, PwC and investment firm Elwood concluded that the vast majority of cryptocurrency investment funds are in fact pretty small.
For instance, the survey found that more than 60% of 150 active crypto hedge funds have less than $10 million in AUM, with only 10% of these funds managing more than $150 million. It also found that the average crypto fund’s AUM is only $21.9 million, indicating that, despite a few big fish, much of the sector is populated by smaller firms trying to capitalize on the cryptocurrency market.
More disconcertingly is that the report also notes a lack of independent governance in the average fund, given that only 25% have boards with independent directors, something that may be risky in cases of emergency, when clear, cautious decisions are needed. Similarly, over 90% of crypto hedge funds don't use third-party research, suggesting that they suffer from a deficit of external, objective input.
Still, while this might indicate that the crypto hedge fund sector is immature and vulnerable, there was a pronounced increase in crypto hedge funds and the assets under their management in 2018, according to Morgan Stanley research. In 2014, for instance, there were only 31 such funds, while there were 220 by November 2018. More impressively, these funds had $7.1 billion in assets under management in July 2018, driven largely by demand and involvement from institutional investors.
It is for this reason that it would be unwise to predict that the importance and presence of crypto funds won’t grow even further in 2019 and the years to come. As the foregoing overview has shown, they function as an indispensable medium between big institutional investors and the nascent cryptocurrency industry. This means that the more they grow, the more crypto becomes part of the wider financial system.
Coinbase resets the passwords of over 3,000 customers in response to a bug that logged their real passwords in clear text.
Major crypto platform Coinbase has emailed 3,420 Coinbase customers to disclose an accident with customer registration. Some registration details were apparently stored in clear text on the logs of Coinbase’s internal server, with affected customers now required to change their passwords.
Coinbase announced the news in an official blog post on Aug. 16. According to the announcement, Coinbase has resolved the root cause of the bug and the platform is confident that stored data was not “improperly accessed, misused, or compromised.”
Some users’ credentials were saved when a rare signup error occurred. When users encountered this error, Coinbase would deny their registration but still save their credentials, including username, email address, proposed password and state of residence for United States-based users.
Moreover, the announcement specified that the 3,420 individuals then submitted a new registration application, in which they used the same password. Coinbase was apparently able to determine this because the password hash would match the earlier password hash saved from the failed signup attempt.
Coinbase also reassured users that none of the data recorded in their logging system appears to have been accessed and that they have contacted all of the affected users. Per the announcement, Coinbase uses Amazon Work Station (AWS) for its internal logging, and it shares data with a few log analysis services. These analysis services, as well as AWS, are all audited, and access to the info is said to be tightly restricted.
Coinbase expands its custodial arm
As previously reported by Cointelegraph, Coinbase has expanded its custodial arm, Coinbase Custody, with the recent acquisition of crypto wallet Xapo’s industrial services. This recent acquisition has bumped up Coinbase’s assets under custody to $7 billion. According to the announcement, Coinbase Custody is now the largest crypto custodian by AUC in the world, with 120 clients spanning 14 different countries.
CoinGecko has joined a blockchain analytics network focusing on anti-money laundering and know your customer issues in an effort to improve its exchange transparency services.
Crypto market aggregator CoinGecko has joined the network of blockchain analytics and anti-money laundering (AML) company Coinfirm. This partnership will reportedly allow CoinGecko to improve its exchange Trust Score algorithm, as well as provide users with a means to report scams and hacks.
The companies shared a press release with Cointelegraph on Aug. 16. According to documentation from Coinfirm, the company runs the AMLT network that allows members to report cryptocurrency addresses tied to hacks, ransomware, scams and fraud. Coinfirm then blocks these users and funds across the AMLT network. In return for supplying good information, Coinfirm rewards its members with the AMLT token, which can be used to purchase goods and services from Coinfirm such as risk reports.
Per the press release, CoinGecko plans to improve its exchange Trust Score calculations, which is a mechanism for ranking exchanges by their actual liquidity by means of the partnership. CoinGecko apparently intends to make use of the AMLT Token Network alongside Coinfirm’s Analytics and AML Platform in bolstering its ranking system.
CoinGecko also intends to provide some consumer-facing services and benefits. According to the announcement, users will be able to see know your customer and AML insights provided by data on the CoinGecko website. Additionally, users will be able to see Coinfirm’s proof-of-reserves exchange estimates.
CoinGecko users will also reportedly have the option to report crypto addresses themselves, in a system like the foregoing one provided for AMLT network members. Individual users will be able to submit information on scams and hacks tied to crypto addresses, via a widget, and will likewise be rewarded in AMLT tokens.
CoinGecko co-founder Bobby Ong commented:
“We believe that transparency is key in this industry and hope that by using the AMLT Network’s and Coinfirm’s data, our users will be better able to make judgements on exchanges while also helping provide data to bring even more transparency and security. With this initiative, we hope exchanges will continue improving their practices to ensure a safe trading experience for all users.”
Binance CEO praises fake volume reports
As previously reported by Cointelegraph, Binance CEO Changpeng Zhao, known in the crypto community as CZ, recently commented on exchanges reporting fake trading volumes. Zhao was pleased with the reports themselves, as he believes that they will ultimately result in making the industry more transparent. According to Zhao: “the more reports like this the better. The more transparency, the more data there is, the better.”