Press Blockchain and CryptoCurrency
All the top 20 cryptocurrencies are seeing slight to moderate gains, with Bitcoin approaching the $3,750 mark again.
Market visualization from Coin360
At press time, Bitcoin is up about 2 percent on the day, trading at around $3,730. Looking at its weekly chart, the current price is higher than $3,663, the price at which Bitcoin started the week.
Bitcoin 7-day price chart. Source: CoinMarketCap
Ripple (XRP) is up just over 1.6 percent on the day, trading at around $0.331 at press time. On the weekly chart, the current price is higher than $0.329, the price at which XRP started the week — and notably lower than $0.337, the midweek high reported on Jan. 14.
Ripple 7-day price chart. Source: CoinMarketCap
Ethereum (ETH) has seen its value increase by nearly 3 percent over the last 24 hours. At press time, ETH is trading at almost $125, having started the day around $121. On the weekly chart, Ethereum’s current value is near identical to $126, the price at which the coin started the week.
Ethereum 7-day chart. Source: CoinMarketCap
The combined market capitalization of all cryptocurrencies — currently equivalent to about $124.5 billion — is higher than $121.8 billion, the value it reported one week ago.
Total crypto market cap 7-day chart. Source: CoinMarketCap
As Cointelegraph recently reported, the Organisation for Economic Cooperation and Development (OECD) has stated that global regulators should work together to facilitate the development of initial coin offerings (ICOs).
Also, crypto entrepreneur and regular contributor to CNBC, Brian Kelly, claimed that there is no chance for a Bitcoin exchange-traded fund (ETF) approval in 2019. Kelly made his remarks in an interview with Cointelegraph at the Crypto Finance Conference this week.
A bill meant to clarify the classification of digital assets has been introduced in Wyoming.
The bill places crypto assets into three categories: digital consumer assets, digital securities and virtual currencies. The bill defines assets falling in any of those three categories as intangible personal property and grants virtual currencies the same treatment as fiat money.
The proposed bill also authorizes banks to “provide custodial services for digital assets consistent with this section upon providing sixty (60) days written notice to the commissioner.”
The drafted legislation also lets banks serve as qualified custodians in accordance with regulations put in place by the U.S. Securities and Exchanges Commission (SEC).
Wyoming has recently seen a surge in blockchain- and crypto-related legislation entering its legal system. As Cointelegraph recently reported, a bill allowing corporations to issue blockchain-based tokens that represent stocks was introduced in Wyoming on Jan. 16.
On a more local level, the state has also shown interest in implementing blockchain technology for government administration. In December, the Wyoming county of Teton announced a new partnership with online retailer Overstock that targets land records.
Seven people who allegedly managed a fraudulent crypto investment scheme have been charged with violation of multiple banking and business laws in Taiwan.
According to the report, citing local prosecutors, the defendants were charged with the violation of Taiwan's Banking and Multi-Level Marketing Supervision acts.
The group was reportedly arrested on June 13 last year for allegedly operating a fraudulent Bitcoin (BTC) investment scheme. According to FocusTaiwan, the scheme promised investors yearly returns of up to 355 percent.
Because of this promise — which reportedly has not been upheld since returns dwindled after April 24 — the allegedly responsible people have also been charged with additional violations.
FocusTaiwan reports that the group attracted about $51 million in investments. According to the Investigation Bureau under the country’s Ministry of Justice (MJIB), more than 1,000 people were defrauded in the scheme.
In the same month, research conducted by the Wall Street Journal revealed that hundreds of cryptocurrency offerings showed signs of fraudulent activity, improbable returns and plagiarism.
During last year, the value of Bitcoin sent to darknet markets has notably increased, according to a report.
The Chainalysis report points out that darknet activity is relatively not influenced by Bitcoin’s price action and does not necessarily drop when the price drops. According to the data contained in the report, in 2018 the relationship between the value of darknet market transactions and Bitcoin’s market performance was inverse.
Over the course of 2018, the total value sent to darknet markets saw a notable 70 percent increase, while total Bitcoin economic transaction value dropped throughout the year.
Value of BTC Sent to darknet markets and BTC Market Performance. Source: Chainalysis
According to Chainalysis data, the total dollar value of darknet market transactions has been steadily rising since 2011. The value peaked in 2017 at $707 million and decreased approximately 14 percent to $603 million in 2018. According to the report, the decrease in value from 2017 to 2018 is attributable to the closure of popular darknet market Alphabay in mid-2017, which reportedly saw darknet market activity fall by 60 percent.
Value of BTC in USD & share of BTC economic value sent to darknet markets. Source: Chainalysis
Furthermore, after Alphabay’s closure, various other markets reportedly have taken its place, creating what the report dubs is “the whack-a-mole problem with darknet markets.” This lead to another phase of steady increase in the value of such transactions in 2018. The report also notes:
“There’s some evidence that darknet activity even increases after closures.”
Still, according to Chainalysis data, even in 2017, the portion of Bitcoin commercial transactions sent to darknet markets was just a fraction of one percent, after having peaked in 2012 at over 6 percent. Since its peak in 2012, the share of Bitcoin transactions sent to darknet markets has been mostly steadily decreasing.
As Cointelegraph reported in December last year, Cypherpunks co-founder Timothy C. May, who died of natural causes about one month ago, forecasted in his Crypto Anarchist Manifesto that “crypto anarchy will allow national secrets to be traded freely and will allow illicit and stolen materials to be traded.”
In a dedicated analysis published in March 2018, Cointelegraph reported data from various sources pointing out that cash, and specifically United States dollars, remain the preferred method of payment for illicit goods and services. The report stated that while half of Bitcoin has at some stage been used for illegal purchases, a whopping 90 percent of U.S. dollar bills hold traces of cocaine.
In October 2014, the founder of the darknet market search engine Grams declared that “the darknet was created mainly to fight the tyranny of governments” before concluding:
“Darknet promotes freedoms, not criminal acts.”
Blockchain firm Setl has hired Christian Noyer, former governor of the French central bank.
British blockchain technology group Setl has hired former governor of the French central bank Christian Noyer as a member of its board of directors. The new appointment was confirmed in a blog post published on Jan. 17.
Founded in 2015, Setl is a financial company with a focus on blockchain technology. Setl has built a blockchain-based infrastructure for institutional payments and settlements, with a reported capacity of over 1 billion transactions per day.
According to the most recent announcement, Noyer has joined the board of directors of Setl, bringing a “wealth of experience in the financial, regulatory, economic management and central banking world.”
Noyer’s professional experience includes serving as Vice President of the European Central Bank, Governor of the Banque de France between November 2003 and October 2015, as well as service at the Treasury in the French Ministry of the Economy and Finance.
Previously, Setl’s board of directors was joined by such heavyweights as former non-executive member of the Court of the Bank of England Sir David Walker, former Senior Information Risk Owner of the United Kingdom Foreign and Commonwealth Office Martin Clements, and former Bank of England Deputy Governor Rachel Lomax.
Another prominent hire in the crypto industry took place Jan. 16, when cryptocurrency exchange ErisX revealed that it had appointed Joseph Lubin, the founder of blockchain tech company ConsenSys and co-founder of cryptocurrency Ethereum (ETH), to its board of directors.
In December, blockchain startup Civic appointed Apple veteran Phillip Shoemaker as executive director of Identity.com, its decentralized identity platform.
ICObench report: ICOs completed in the first half of January have raised $160 million, about 33 percent of the combined amount secured in December.
Initial coin offerings (ICOs) completed in the first half of January have raised around $160 million. The figure was provided in a report by ICO rating service ICObench shared with Cointelegraph on Jan. 18.
ICOs completed by Jan. 15 have managed to raise about 33 percent of the combined amount raised in the previous month of December. Half of that sum was secured by just one project, the report notes.
According to ICObench, the number of fundraisers that are set to take place in January is more than 150, a figure similar to the past seven months, excluding December.
In January, the combined hard cap — the maximum amount of money that a project can secure from investors during an ICO — amounts to more than $4 billion. As per the report, three fundraisers out of the five largest this month have reached or almost reached their hard caps.
ICObench also reported that the number of ICO listings has continued to decline in January, suggesting that the phenomenon is losing its popularity.
In terms of amount of funds raised, Canada has been leading during the first half of the month, with a combined figure of $80 million. However, when it comes to the actual number of projects, the Netherlands ranked first.
ICO statistics by country in the first half of January 2019. Source: ICObench
On Jan. 16, major crypto exchange BitMEX released a report claiming that ICO teams have lost 54 percent of value of the initial $24 billion worth of tokens allocated to themselves due to the decline in coin prices.
Ethereum core devs have reportedly postponed the activation of Constantinople hard fork until late February.
Core developers of Ethereum (ETH) have postponed the activation of the Constantinople hard fork until late February. The upgrade is now set to be implemented at ETH block 7,280,000, as announced by a team lead at Ethereum, Peter Szilagyi, in a tweet Jan. 18.
In his announcement, Szilagyi explains that the activation will take place at block number 7,280.000, which is expected to be mined on Feb. 27, 2019. The upgrade will reportedly be implemented as “a single fork on mainnet and a post-Constantinople-fixup fork on the testnets to get them back in line feature wise with the main network.”
The new deadline comes in the wake of an unexpected delay over a recently discovered security vulnerability allowing a reentrancy attack, which has been detected in Constantinople’s code by smart contract audit firm ChainSecurity.
The vulnerability purportedly allows a potential attacker to steal cryptocurrency from a smart contract on the network by repeatedly requesting funds from it while feeding it false data about the malicious actor’s actual ETH balance. In order to patch the loophole, the launch of the upgrade had been postponed until further notice.
The upcoming Constantinople hard fork is an upgrade to the ETH network, which encloses separate Ethereum Improvement Proposals (EIPs) in order to soften the transition from the current proof-of-work (PoW) to the more energy efficient proof-of-stake (PoS) consensus algorithm.
Once implemented, the improvements would purportedly fundamentally change the Ethereum blockchain, preventing any backwards compatibility — meaning that network nodes must either update synchronically with the entire system or carry on running as a separate blockchain entity.
Kelly also predicted that the world will soon see a financial crisis, which will open a window of opportunity for crypto and allow it to become a real alternative to fiat.
Crypto entrepreneur and regular contributor to CNBC, Brian Kelly, claimed that there is no chance for a Bitcoin (BTC) exchange-traded fund (ETF) approval in 2019. Kelly made his remarks in an interview with Cointelegraph at the Crypto Finance Conference, Switzerland, Jan. 18.
Discussing the overall state of the cryptocurrency market, Kelly predicted that 2019 will turn out better than 2018. The analyst argued that “we are somewhere close to the end of [the bear market], but we might have another dip lower, it wouldn’t surprise me at all.” Speaking specifically about what we should expect from 2019, Kelly continued:
“Probably in 2019 the focus will be on currencies — Bitcoin, Litecoin, some of those — because we have quite a bit of geopolitical tension in the world. We are starting to see some global macro players use Bitcoin as alternative to their gold position, or as a way to hedge against fiat currency fluctuations and volatility.”
According to Kelly, 2019 will see Bitcoin become a more accepted asset among mainstream investors.
However, when asked about the likelihood of a Bitcoin ETF receiving government approval this year, Kelly said that there is “no shot” for that.
The approval of a Bitcoin ETF — an investment fund that would track the value of its underlying asset and trade on stock exchanges — by the United States Securities and Exchange Commission (SEC) is a highly anticipated event that is seen by many as a prerequisite for major institutional investors entering the crypto market.
Over 2018, the SEC has received multiple Bitcoin ETF applications from various players, such as the Winklevoss twins, but is yet to approve any one of them. Expanding on his point of view, Kelly said that the agency is unlikely to change its opinion in the near future, as “there is too much that is unresolved.” According to the analyst, it will take more than a year to settle the existing issues.
Kelly further predicted that in the upcoming years the world will face a new recession, followed by a new financial crisis. However, the nature of the latter will be different from the previous crises, which will purportedly create a window of opportunity for cryptocurrencies and result in making them an actual alternative to fiat money.
As Cointelegraph reported last August, Kelly had previously predicted that the approval of a Bitcoin ETF would not happen earlier than in February 2019. He then affirmed the SEC’s argument that the existing BTC futures market is not mature enough, nevertheless highlighting that it is evolving quickly.
Winklevoss Capital’s Sterling Witzke claimed that institutional investors are not ready to take the big plunge into crypto. Do the charts support this?
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. 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.
In a recent interview with Cointelegraph, Sterling Witzke, partner at Winklevoss Capital, claimed that institutional investors are looking into the cryptocurrency industry, but are not quite ready to take the big plunge yet.
According to her, the unfavorable regulatory environment in the United States and the lack of adequate security measures in are two major factors that need to be sorted out if institutions are to make a decisive entry.
Companies are trying various approaches to opening up Bitcoin and other cryptocurrencies to the mainstream audience.
One such attempt is by Bitcoin ATM company Coinme that has partnered with coins-to-cash converter Coinstar. The two companies aim to facilitate buying Bitcoin through Coinstar kiosks that are going to be put up at grocery stores throughout various countries.
As if the number of existing cryptocurrencies was not enough, researchers from seven top U.S. Universities have come together to launch a “globally scalable decentralized payments network.” This shows that some of the top minds in the industry are positive on the prospects of cryptocurrencies in the future.
Bitcoin’s (BTC) volatility has declined sharply in the past three days. We anticipate a resolution of this tight range within the next few days. Both moving averages are either flat or marginally sloping down. The RSI is in the negative zone. This shows that the path of least resistance is to the downside.
A breakdown of $3,473.47 can push the BTC/USD pair towards the year-to-date low of $3,236.09. On the contrary, if the bulls push the price above the moving averages, a rally to $4,000 is possible. We anticipate a strong resistance in the zone of $4,000–$4,255.
If the bulls scale this zone, the leading cryptocurrency might start a new uptrend. We shall wait for a reliable buy setup to form before recommending any trades in it. Until then, it is best to remain on the sidelines.
The failure of Ripple (XRP) to break out of the moving averages will attract sellers. A breakdown of $0.31121 can lead to a decline to $0.27795.
The trend is down as the XRP/USD pair continues to trade inside the descending channel. Both of the moving averages have turned down marginally and the RSI is in the negative zone, which suggests that the bears have the upper hand.
The first sign of a probable trend reversal will be a breakout and close above the downtrend line. Such a move can see the price move to $0.4, and above it to the resistance line of the channel. We couldn’t find a reliable trade setup at the current levels, so we are not suggesting any new long positions.
Though the bulls have successfully defended the 50-day SMA for the past four days, they haven’t been able to push Ethereum (ETH) above the 20-day EMA.
The 20-day EMA sloping down and the RSI in the negative zone suggest that the bears have the advantage in the short term. A breakdown of $116.3 will increase the probability of a fall to $100, and further to $83.
However, if the bulls push the price higher, a breakout above $140 can carry the ETH/USD pair towards the next overhead resistance of $167.32. We shall wait for a confirmed change in trend before proposing a trade in it.
The volatility in Bitcoin Cash (BCH) has shrunk dramatically in the past three days, which shows a lack of both buying and selling interest.
If the buyers return in large numbers and push the BCH/USD pair above the moving averages, a rally to $177.3 will be probable.
Nonetheless, if the bears sink the digital currency below $121.3, a decline to $100, and below that to $73.5, will be possible.
Though EOS continues to trade inside the range of $2.3093–$3.2081, the bulls are struggling to push the price above the 20-day EMA.
A breakdown of the range and $2.1733 can push the EOS/USD pair towards $1.7746, and below that to the recent low of $1.55.
Conversely, if the bulls push the price above the 20-day EMA, the cryptocurrency might reach the top of the range. With both of the moving averages flat and the RSI marginally in the negative zone, a consolidation is likely.
The intraday range has tightened further in Stellar (XLM). The bulls and the bears are in a state of balance.
A break below $0.010235190 will increase the probability of a retest of $0.09285498, below which the downtrend will resume.
If the bulls push the XLM/USD pair above the 20-day EMA and the 50-day SMA, a move to $0.13427050 will be possible. A break out of this level will be the first indication that the trend is about to reverse. Currently, we couldn’t find any bullish patterns, so we are not suggesting a trade.
Litecoin (LTC) has been trading between the moving averages for the past four days. Such a tight range is unlikely to sustain for a long time.
After this period of low volatility, we expect the range to expand in the next few days. However, it is difficult to predict which way the break will happen because the moving averages are flat and the RSI is also just below the 50 levels.
If the LTC/USD pair scales above the 20-day EMA, it might attempt to move up to $36.428, and further to $40.784. However, if the bears sink the virtual currency below the support zone of $27.701–$29.349, a fall to $23.090 will be probable. Therefore, long positions should be protected with a stop loss at $27.5.
For the past two days, Tron (TRX) has been trading inside the intraday high and low formed on Jan. 15 of this year.
A breakout and close above the overhead resistance zone of $0.02733572–$0.02815521 might start a new uptrend that could carry the TRX/USD pair to $0.04.
On the other hand, if the price breaks down of the 20-day EMA, it might correct to $0.0211344, and below it to $0.0183. We suggest traders either buy closer to $0.0183, or on a close above $0.02815521 (UTC time frame). We couldn’t find any reliable trades inside the range.
Not much is happening in Bitcoin SV (BSV) as it remains stuck inside a very tight range of $74.022–$88.722.
A breakdown of this tight range will lead to a retest of $65.031. A break of this level will trigger the liquidation of long positions that can plunge the BSV/USD pair further to $57, and below that to $38.528.
The first sign of recovery will be when the bulls push the price above the moving averages and sustain it there. Until then, we suggest the traders stay on the sidelines.
Though Cardano (ADA) has closed above the 20-day EMA, it is yet to make a decisive move higher. Currently, the bulls are struggling to sustain above the moving average.
Both moving averages are flat, and the RSI is close to 50 levels, which points to a consolidation in the near term.
The levels to watch on the downside are $0.4 and $0.036815, whereas an important threshold on the upside is $0.051468. If this level is crossed, the ADA/USD pair can move up to the resistance line of the ascending channel.
However, we couldn’t find any bullish setups at the current levels, so we remain neutral on the coin.
A new cryptojacking malware reportedly has the ability to disable cloud-based security measures to avoid detection on Linux-based servers.
The malware in question mines Monero (XMR) and is reportedly a modified version of one used by the so-called “Rocke” group, originally discovered by cybersecurity firm Talos in August last year. According to the research, one of the first things that the malware does is check for other cryptocurrency mining processes and add firewall rules to block any other cryptojacking malware.
The virus reportedly also searches for cloud security services by Chinese internet giants Tencent and Alibaba and neutralizes them in an attempt to remain concealed. Ryan Olson, vice president for threat intelligence at Palo Alto Networks explained:
“This evolution indicates that attackers who are compromising hosts operating in cloud platforms are now attempting to evade security products that are specific to those platforms.”
The virus also reportedly takes advantage of known vulnerabilities in older versions of Apache Struts 2, Oracle WebLogic and Adobe ColdFusion to infect the systems. Still, keeping the software updated to the latest version prevents the attack, according to the report.
As Cointelegraph reported in December last year, cryptojacking malware activity rose by over 4000 percent in 2018, according to a new quarterly report published by cybersecurity firm McAfee Labs.
According to another report published the same month, 415,000 MikroTik routers had been affected by cryptojacking malware at that time, double the number of infected devices since last summer.
The Organisation for Economic Cooperation and Development stated that regulators should facilitate the development of ICOs.
The Organisation for Economic Cooperation and Development (OECD) has stated that global regulators should work together to facilitate the development of initial coin offerings (ICOs), according to a report released Jan. 15.
The document calls for regulatory clarity and a supervisory framework for ICOs, defining such moves as “a stepping stone to their safer use for financing purposes.” The report also underlines the importance of standardized disclosure requirements, enhanced investor protection Anti-Money Laundering (AML) and Counter Terrorist Financing (CFT) measures.
A separate document dedicated to the highlights of the report states:
“A delicate balance will need to be achieved in the development or application of regulatory and supervisory requirements which do not deprive the ICO mechanism of its speed and cost benefits, particularly when it comes to smaller size offerings.”
The same document also states that given the global nature of ICOs, there is a need for international cooperation to prevent regulatory arbitrage. According to the text, such collaboration will “allow ICOs to deliver their potential for the financing of blockchain-based SMEs [small and medium enterprises], while adequately protecting investors.”
The OECD is an organization that describes itself as an “economic counterpart to NATO,” with a mission to “help governments achieve sustainable economic growth and employment and rising standards of living.”
As Cointelegraph reported in August last year, the OECD then announced the “first major international conference” dedicated to blockchain. Organizers planned to focus on the use of blockchain tech in government activities and public initiatives, as well as regulatory aspects.
A Cointelegraph analysis from September of last year describes how OECD has been cautiously enthusiastic about blockchain technology. The organization has on the other hand been reportedly less supportive of blockchain-based currencies — such as Bitcoin (BTC) — that potentially bypass central banks’ authority.
Chinese exchange ZB.com saw an 80 percent surge in 24-hour traded volume to seal top exchange ranking on CoinMarketCap, surpassing Binance.
Friday, Jan. 18 — crypto markets continue to see calm, with all top ten coins seeing mixed 24-hour price changes capped within a 3 percent range, as Coin360 data shows.
Market visualization from Coin360
On CoinMarketCap (CMC)’s crypto exchange rankings by adjusted daily traded volumes, however, some major upheavals are underway. Today, Chinese exchange ZB.com saw an 80 percent surge in 24-hour trade volume to hit ~$606.7 million, and displacing Binance as top exchange on CMC.
ZB.com is currently ranked the largest exchange globally; however, during the time of writing, a separate China-based exchange, LBank, has flickered in and out of the top spot, at several points posting over 150 percent increase in trades on the day to hit volumes of ~$800-900 million. Up to press time, the exchanges volumes had fleetingly reduced to ~$380 million, thus dropping back to fourth place.
First three top crypto exchanges by adjusted daily trade volume. Source: CoinMarketCap
Around 47 percent of the trade volume on ZB.com is accounted for by Qtum-Tether (QTUM/USDT) trading, according to CoinMarketCap data.
Trade volumes of formerly top platform Binance have meanwhile dropped 14 percent on the day, seeing ~$550 million in trades.
“Looks like a ton of market manipulation by zb.com tanking most digital assets and trying to pump tron. The Chinese are dump and pumping last night[.]”
Meanwhile, according to a tweet from ZB.com Jan. 16, crypto ranking website CoinGecko has released its own exchange rankings for Q4 2018, which places ZB.com as the second largest by median reported volume:
CoinGecko’s crypto exchange rankings for Q1 2018. Source: ZB.com Twitter
Considerably less volatile, top cryptocurrency Bitcoin (BTC) has seen negligible price change over the past 24 hours, down 0.45 percent on the day to trade at $3,645. After an intraweek low of ~$3,550 Jan. 13, Bitcoin has recovered to trade just 1.6 percent down on its 7 day chart. On the month, the coin is up by 3 percent.
Bitcoin 7-day price chart. Source: CoinMarketCap
Ripple (XRP) — which has regained its spot as largest altcoin by market cap — has also seen mild price change on the day, losing 1.2 percent to trade ~$0.32 at press time. With a market cap of $13.3 billion to press time, Ripple is only just ahead of Ethereum (ETH), which has a market cap of around $12.6 billion to press time, according to CoinMarketCap data.
Ripple is now down around 3.5 percent on the week, and down 2.4 percent on the month.
Ripple’s 7-day price chart. Source: CoinMarketCap
Ethereum has seen a similarly mild 1.6 percent loss to trade at ~$121. The altcoin is down close to 6 percent on its 7-day chart; on the month, growth remains at a bullish 27 percent.
Ethereum 7-day price chart. Source: CoinMarketCap
Among the remaining top ten coins on CoinMarketCap, all are in the red, seeing losses capped below 3 percent. EOS (EOS) is seeing the heaviest losses on the day among the top ten coins, down 2.7 percent to press time.
Among the top twenty, losses are also capped near 3 percent — with Ethereum Classic (ETC) losing the most, down 3.2 percent on the day to trade at $4.33. Binance Coin (BNB) and IOTA (MIOTA) are the only coins in the green, with the former up a solid 3.9 percent and the latter up just a fraction of a percent to press time.
Total market capitalization of all cryptocurrencies is at around $121.2 billion as of press time — down around 1.6 percent on the week.
7-day chart of total market capitalization of all cryptocurrencies. Source: CoinMarketCap
Speaking against the tide in a tweet posted today, Morgan Creek investment analyst Chris King stated:
“I used to pound the table on tokenized securities. As new information on the market was presented I’ve completely changed my view. Not much value will be captured by “tokenizing” traditional securities. -no liquidity or liquidity premium -no demand -no value creation.”
Tokenized securities have been gaining significant traction with industry leaders, as exemplified by the words of Bitcoin bull and co-founder of Gemini exchange, Cameron Winklevoss, who recently remarked:
“I think the next wave will see the real innovation, and the really interesting assets that become tokenized — like real estate, like buildings that are currently not traded in a really liquid fashion. So that’s exciting.”
Thailand’s Stock Exchange exec reveals plans to set up a licensed digital asset exchange in the country.
Citing the vice chair of SET’s board of governors, Pattera Dilokrungthirapop, — аlso chair of the Association of Securities Companies — the report revealed that the national stock exchange plans to apply for a digital asset operating licence from the country’s Ministry of Finance within the year.
According to the plan, SET’s member securities firms will be able to apply to become brokers and dealers for trading on the new digital asset exchange.
As a representative of the securities industry, Dilokrungthirapop stressed that there are a number of securities firms that are interested in broker and dealer activity with digital assets as a class, but are not necessarily looking to enter cryptocurrency markets.
Dilokrungthirapop further stated:
"Securities firms are currently waiting for the SET to apply for a licence. For us, digital assets are expected to grow in the future as investors gain more understanding of this asset class."
Jirayut Srupsrisopa, chief executive of Thai crypto exchange Bitkub, noted that a digital asset exchange from SET would have the advantage of leveraging the stock exchange’s already existing trust and capital. The exchange also expressed interest in partnering with SET for its digital asset venture.
Recently, the much-anticipated digital assets platform Bakkt — created by the operator of the New York Stock Exchange (NYSE) — entered into an agreement to acquire certain assets in futures commision merchant Rosenthal Collins Group (RCG).
A representative from Binance has declined to confirm the locations of as many as six reported further fiat-supporting platforms.
Major crypto exchange Binance plans to expand to eight new countries in 2019, according to a report from crypto outlet The Block, Jan. 17. Following the report, a Binance spokesperson has declined to confirm six of the alleged locations in comments to Cointelegraph today, Jan. 18.
Just a day after the major cryptocurrency exchange launched its new European-focused platform for fiat-crypto trading in Jersey, The Block published a report that included a screenshot of a spreadsheet allegedly outlining all the locations for Binance’s fiat-crypto exchanges that are already-launched, intended and under consideration.
In addition to Uganda — which launched in October — and just-live Jersey, the Block listed Singapore, Malta, South Korea, Liechtenstein, Argentina, Russia, Turkey and Bermuda — a total of eight prospective fiat platforms across four continents.
A Binance representative told Cointelegraph the exchange could only confirm Singapore and Malta — both listed in the report as being slated for launch in 2019. Five further countries had been listed as “intended,” and the last, Bermuda, as being under consideration.
In response to the report, the Binance spokesperson suggested The Block may have “made the spreadsheet themselves,” as it was “definitely not from us.”
As reported, Binance announced it would be starting private beta testing for a crypto-fiat exchange in Singapore last September. In June, the exchange had opened a bank account in Malta, paving the way for the introduction of fiat-crypto pairs, and detailed plans in September to launch a security tokens trading platform on the island.
Notably, last August Binance itself announced it would be launching a fiat-to-crypto exchange in Liechtenstein — with support for Swiss francs (CHF) and Euros (EUR) — notwithstanding the company representative’s refusal to confirm The Block’s claims.
As Cointelegraph reported in September, the CEO and founder of Binance, Changpeng Zhao (CZ), revealed that the company intends to launch five to ten fiat-to-crypto exchanges — two per continent — within one year, without specifying the exact locations.
Binance is the currently the world’s second largest crypto exchange by 24-hour adjusted trading volume, seeing almost ~$570 million in trades on the day to press time.
Blockchain firm Spring Labs is fostering data security knowledge prior to releasing a public version of its Spring Protocol.
At the same time, it has convened the Spring Founding Industry Partners (SFIP) Program, a research effort comprised of partners aiming to further reduce data fraud and boost security prior to the Protocol’s public release.
Now, a further sixteen small businesses and consumer fintech lenders have signed up to the program.
“As an ever-increasing amount of financial transactions move online, new types of mission-critical fraud and ID verification solutions based on information sharing must be developed,” Noah Breslow, CEO of one of the new participants, OnDeck Capital, commented in the press release:
“We believe the team at Spring Labs has the right background to galvanize industry leaders around the creation of a new and innovative network.”
Spring courted press attention in October when it revealed it had hired Gary Cohn, the former chief economic advisor to U.S. President Donald Trump, to work on its board of advisors.
The role P2P blockchain technology could play in data security has become a preoccupation of various players recently, with projects such as CoinBene’s ‘Internet of People’ also underway.
Blockchain is featured as a disrupting technology in the Tech Trends 2019 report published by Big Four audit and consulting firm Deloitte.
According to one article in the report, “[a]dvanced networking is the unsung hero of our digital future,” and blockchain is cited as a part of it. The report — which mentions blockchain 25 times — notes that blockchain is among the technologies the importance of which is growing rapidly and still on its path towards mass adoption.
The report also cites a International Data Corporation’s (IDC) projection from last year that states worldwide spending on blockchain solutions will reach $9.7 billion in 2021. Another IDC’s prediction sees the spending hitting $11.7 billion in 2022.
The annual report also notes that the fact that blockchain is “capturing both mindshare and investment is remarkable considering that a few years ago the word blockchain was known only through its relationship to cryptocurrencies.” The authors explain their take on the nature and implications of blockchain:
“Today, blockchain is to trust what the web was to communication: a profoundly disruptive technology that transforms not only business but the way humans transact and engage.”
Deloitte’s report forecasts ares in which blockchain is likely to develop this coming year, saying “we will likely see breakthroughs in gateways, integration layers and common standards in the next few years.” For cryptocurrency applications, the researchers expect proof-of-stake (PoS) algorithms — a less computing intensive way to verify transaction that does not rely on mining — to address scalability and transaction cost problems.
As Cointelegraph reported in October last year, Deloitte has outlined five basic areas in which blockchain technology needs to develop in order to achieve widespread adoption.
The five obstacles cited to the adoption of the technology are the possibility of time-consuming operations, lack of standardization, high costs and complexity blockchain applications, regulatory uncertainty, as well as the absence of collaboration between blockchain-related firms.
Deloitte’s point of view is apparently in contrast with the ideas of major financial consulting company McKinsey & Company which — as Cointelegraph recently reported — believes that there is little evidence of practical use cases for blockchain.
Malaysia has given cryptocurrencies the regulatory green light — but they have to adhere to securities laws and will be governed as such.
Cryptocurrency exchanges and blockchain-based companies in Malaysia face some testing times following regulatory changes in the country. As of Tuesday, Jan. 15, new regulations governing cryptocurrencies have come into effect in Malaysia.
According to reports, the new regulation has classified cryptocurrencies, tokens and crypto assets as securities, which means they are now under the jurisdiction of the Malaysian Securities Commission.
In accordance with the change, any unauthorized cryptocurrency exchanges or initial coin offering (ICO) could face a 10-year jail sentence and fines to the tune of $2.4 million.
While the change may seem harsh at face value, the punishments for those not adhering to regulations are just the worst-case scenario.
According to various sources, the Malaysian government has expressed positive sentiments toward cryptocurrencies and blockchain technology, even though they’ve taken a hard line in classifying all cryptocurrencies as securities.
Malaysia’s positive outlook, despite blanket treatment
Malaysian news outlet The Star noted the positive attitude toward the sector, as Finance Minister Lim Guan Eng delivered the enforcement of the new regulations. According to Eng, the Malaysian government sees the potential of cryptocurrencies and blockchain technology to improve a number of sectors of its economy:
“The Ministry of Finance views digital assets, as well as its underlying blockchain technologies, as having the potential to bring about innovation in both old and new industries. In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses, and an alternate asset class for investors.”
This change in sentiment has come swiftly, considering that a Malaysian government minister had said the government was still undecided in its stance on cryptocurrencies last week.
Federal Territories Minister Khalid Abdul Samad made this statement on Jan. 12, according to New Strait Times:
“People have asked me if these (cryptocurrency and digital currency) currencies are legal or illegal. At the moment, the answer is neither legal nor illegal as the situation is still unclear.”
Nevertheless, the final outcome has met the timeline set out by the Malaysian government back in 2018. In December, the finance regulator and central bank had earmarked a final decision on regulation for the first quarter of 2019.
Effendy Zulkifly, who founded Crypto Valley Malaysia, told Cointelegraph that there was already a high level of awareness at a governmental level in the country, with the Central Bank of Malaysia creating a fintech sandbox and setting up a cryptocurrency unit.
Zulkifly believes the move is a positive one for businesses operating in the cryptocurrency space within Malaysia, as it removes any uncertainty around the legality of their operations:
“It is a good thing for the cryptocurrency market because we can [sic] a clear direction and are now recognised by government. There’s no need to be scared and no need to hide anymore. We can just follow the requirements by the government and do an ICO without fear anymore. For example, the Switzerland government is a model that recognised ICOs in their country. Their economy got stronger because the value of ICOs as Foreign Direct Investment.”
While the Malaysian government has been contemplating the direction to take with cryptocurrencies, there’s been plenty of controversy around a local cryptocurrency project linked to a political party.
As previously reported by Cointelegraph, the Harapan Coin came into existence in 2017 and has since been touted as a cryptocurrency used for funding a coalition of opposition political parties leading up to the country’s 2018 elections.
The Barisan Nasional had been in control of the country since its independence in 1957, but finally conceded power in 2018, when the Pakatan Harapan coalition took a majority of seats in the lower parliament.
Overcoming the lengthy stay of power was used as a major fighting point by opposing parties, and the Harapan Coin was directly linked to funding these opposition parties.
There has been some controversy surrounding this particular aspect of the project. The identities of people working on the project are obscure, and more than half of the funds raised has been allocated to system administrators and one of the political parties within the Pakatan coalition.
The Harapan Coin has been promoted by Khalid Samad, the Malaysian Minister of Federal Territories mentioned above. Overall, the project seemed to have been held at arm's length by the Malaysian financial authorities and civil society groups.
A blanket approach
The Malaysian government and financial regulator have made a clear-cut decision to define cryptocurrencies as securities. The decision may have some interesting ramifications, but it's a decision that gives clarity to businesses operating in the country.
It is, however, a very different approach compared to a country like the United States, which has taken an extended amount of time to consider how it should regulate cryptocurrencies and virtual assets.
Regulations governing securities have been applied to cryptocurrencies around the world in order to provide some sort of guideline to a technology and medium of exchange that is still in its infancy.
With that being said, the U.S. is looking to move in a different direction from the one taken by Malaysia. In December 2018, two U.S. congressman introduced a draft bill that hopes to exclude digital assets from being defined as securities.
The bill wants the Securities and Exchange Commission (SEC) to adjust taxes related to virtual currencies, create a tax exemption for the exchange of different cryptocurrency tokens, as well as a change to the taxation of capital gains made on the sale and exchange of cryptocurrencies. The proposal essentially wants cryptocurrencies to be considered for what they are, and regulated in a manner that is fair to their use cases.
A prime example was the consideration of Ethereum as security, due to the nature of its token sale in 2014. American regulators looked long and hard at the situation before a final decision was taken to not consider Ethereum as a security in June 2018.
However, the simple truth is that Malaysia’s take effectively throws a blanket over all cryptocurrencies, ICO’s and their tokens. For now, exchanges and blockchain companies will have to play by the rules or suffer the consequences laid out by Malaysian regulators this week.
The ideal situation
While a blanket approach seems to be the route Malaysian regulators have taken, it may not be the best way to approach the situation.
Cointelegraph reached out to Dr. Mattia Rattaggi, the chair of policy and regulation at the Crypto Valley Association, who provided a holistic view of global regulatory trends toward cryptocurrencies:
“As we know, the definition of securities differs from country / region to country / region. I am not familiar with the securities law in Malaysia, but the same principle should apply.”
As Rattaggi suggests, there seems to be no clarity on whether clear distinctions will be made between different types of securities and how cryptocurrencies and crypto assets will be individually classified.
“They seem to take the view that all cryptotokens are securities. But I do not know if they draw distinctions between payment, utility and securities tokens. Thus, in my view only cryptotokens that correspond to securities according the financial law prevailing in the country should be considered and regulated as securities.”
Nevertheless, regulation continues to be a major talking point around cryptocurrencies. Some feel this is a hindrance, but Rattaggi believes it is pertinent to ensure growth and development of the industry:
“I hold the view that the crypto economy is still in a phase where it needs more regulation rather than less. More regulation is needed to increase trust, to standardize more, and more importantly to get to the maturity level of interest to institutional money and investors.”
Chip manufacturing giant Taiwan Semiconductor Manufacturing reported a sizeable drop in its crypto mining-related revenue in 2018.
Chip manufacturing giant Taiwan Semiconductor Manufacturing (TSMC) reported a sizeable drop in its crypto mining-related revenue in 2018. The news was revealed in the company’s Q4 2018 financial results, published Jan. 17, together with an earnings call transcript.
TSMC has not disclosed specific data for its crypto mining business — including it instead within its high-performance computing (HPC) segment. In the earnings call transcript, TSMC CEO & Vice Chairman C.C. Wei revealed that whereas HPC, excluding crypto, had grown slightly:
“[C]ryptocurrency is a big drop from 2018 to 2019. So if we put the cryptocurrency together in the HPC, it's a big drop. It's almost a double-digit.”
Pressed to give more exact data, Wei only noted that cryptocurrency had contributed a lot to the manufacturer’s chip sales last year, yet emphasized the firm “cannot specify too much of the segment, particularly it belongs to one of the big customers.”
As reported, TSMC is known as a major supplier of Application-Specific Integrated Circuit (ASIC) chips to Chinese crypto mining behemoth Bitmain, which has been under increasing pressure during the persistent cryptocurrency bear market slump.
While a Bernstein analysis had attributed 2 to 3 percent of TSMC’s total revenue to cryptocurrency-related sales in February last year, Wei looked ahead to 2019 with considerably more circumspection:
“Okay. This year, we don't forecast — we become conservative in forecasting this volatile business. So the cryptocurrency mining this year is much, much less than last year. And to what percentage, I don't think it's — I can release it right now.”
For Q4 2018 on a consolidated basis across its business, TSMC posted a revenue of $9.4 billion in Q4 2018 — a 10.7 percent increase from the previous quarter and a 2 percent rise year-over-year, according to the report. Lora Ho, chief financial officer and senior vice president of finance, stated that Q1 2019 revenue is forecast to be $7.3-$7.4 billion — representing a 22 percent sequential decline.
As reported just this week, the bearish market continues to impact mining industry participants. Major United States-based crypto mining and blockchain firm Giga Watt has just announced it is closing access and power to its facilities and stopping day-to-day operations, after having filed for bankruptcy in November last year.
Bitmain continues to wind back its multinational operations, this month reportedly suspending its mining in the U.S. state of Texas, after having closed its development center in Israel and laying off local employees at the end of last year.
Switzerland-based crypto exchange ShapeShift reports seeing a 175 percent increase in law enforcement agency requests in the second half of 2018.
Law enforcement requests sent to Switzerland-based cryptocurrency exchange ShapeShift rose 175 percent in the second half of 2018, according to a new Compliance Transparency report published by the exchange Jan. 18.
In a blog post accompanying the report, Shapeshift outlines that it typically receives requests from law enforcement agencies for data including crypto addresses (in or out of the Shapeshift system), transaction IDs, identity information (names, emails, IP addresses), cryptocurrency or crypto asset information and more. ShapeShift emphasizes that in most cases it is not informed of the details of the investigation or probe for which the data is being gathered.
The report reveals that Shapeshift received a total of 44 subpoena requests in Q3 and Q4 2018 — a 175 percent increase as compared with a combined total of 16 in the preceding two quarters. These break down as 6 subpoenas in Q1, 10 in Q2, 19 in Q3 and 25 in Q4.
2018 law enforcement requests sent to ShapeShift. Source for data: ShapeShift
In terms of geographic jurisdictions, the highest number of requests over the year came from United States-based agencies — accounting for 18 out of a total of 60 global inquiries. Among these, 6 came from the FBI, 5 from the Securities and Exchange Commission (SEC), 3 from state level authorities, 2 from the Department of Homeland Security (DHS) and 1 from the Commodities and Futures Trading Commission (CFTC).
ShapeShift claims it is usually able to provide the requested information within a 1-2 week time frame, and that it complied with every verified request it received in 2018. As the exchange notes, the uptick in its law enforcement inquiries over the year correlates with that seen by other exchanges. As previously reported, subpoenas to crypto exchange Kraken increased three-fold in 2018, as compared with the preceding year.
ShapeShift’s blog post takes pains to emphasize that its experience with law enforcement is typical, citing TechCrunch founder Michael Arrington’s statement when his $100 million crypto hedge fund was probed by the SEC in March 2018: “We received a subpoena. Every [crypto] fund I’ve talked to has received one…”
As reported last fall, ShapeShift was prompted to refute allegations of facilitating money laundering, after being implicated in a Wall Street Journal report that claimed $9 million in ill-gotten funds had been funnelled through its platform.
As a non-custodial platform, Shapeshift historically did not impose user identification requirements on traders — although this is now changing since the platform began to evolve a mandatory membership model in September.
Stellar’s XLM token becomes the ninth digital asset to launch with Grayscale, executives citing investor demand as motivating the move.
The company serves “single-asset investment products that provide exposure to” Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Ethereum Classic (ETC), Horizen (ZEN), Litecoin (LTC), Ripple (XRP) and Zcash (ZEC), along with Stellar.
Speaking to Fortune, managing director Michael Sonnenshein said the latest addition had arisen from investor demand to gain exposure to XLM’s price movements.
“I think the theory is a sound one,” he said about Stellar’s business proposition for bridging crypto to fiat currency conversions, continuing:
“An American bank may be keeping large amounts of currencies in foreign banks, and to be able to bring those balances of foreign currencies onto a balance sheet as working capital is valuable. Financial institutions won’t be required to hold balances all over the place. This will improve efficiency and shore up balance sheets for other uses.”
Grayscale meanwhile faced a mixed year in 2018. By December, after Bitcoin had fallen to 15-month lows of $3,130, the company’s Bitcoin Trust became worth less than $1 billion for the first time during the year.
Research by cryptocurrency industry newsletter Diar at the time added that Grayscale’s holdings amounted to just over 1 percent of the total number of bitcoins in circulation.
Stellar is currently up 1.22 percent on the day, trading at $0.10.
Bitcoin ATM operator Coinme has already begun offering Bitcoin purchases with coin counting firm Coinstar in the U.S., but the extent of the deployment remains unknown.
Coinme, which was the first BTM operator to receive a license in the U.S. in 2014, will reportedly add thousands of locations via the move, which has already seen integrations go live.
CEO and cofounder Neil Bergquist commented in the press release:
“Bitcoin is now accessible at your local grocery store via Coinstar kiosks, and this offering will make it even easier for consumers to participate in this dynamic new economy.”
Coinstar offers coin-to-cash conversion kiosks in various countries throughout the world. It remains unknown whether the Bitcoin feature will expand beyond the U.S., while the company did not provide figures on how many machines will offer it.
“Coinstar is always looking for new ways to offer value to our consumers when they visit our kiosks,” Coinstar CEO Jim Gaherity added.
According to industry monitoring resource CoinATMRadar, there were 4187 known BTMs worldwide as of Friday, of which 2516 (about 60 percent) were in the U.S.
A report published in September last year indicated that BTMs would grow to constitute a $144.5 million industry by 2023.
SEAT, the largest car manufacturer in Spain, has joined Alastria consortium focused on the development of blockchain technology.
Spanish automobile manufacturer SEAT has joined Alastria consortium to work on the development of blockchain-based products. Cointelegraph in Spanish reported the news Jan. 16.
Founded in 1950, SEAT is a state-owned industrial company and Spain’s largest car manufacturer. SEAT’s turnover reportedly reached a record figure of 9.552 billion euro ($10.878 billion) in 2017, which is 11.1% more than the year prior.
Per the recent announcement, SEAT joined Alastria, a multi-industry, semi-public consortium backed by a national network of more than 70 companies and establishments. These include such major players as banks BBVA and Banco Santander, telecommunications provider Telefónica, energy firm Repsol and professional services company Accenture. The goal of the alliance is to promote the advancement and development of blockchain technology.
As part of the collaboration, SEAT plans to test the benefits of blockchain in the field of finance, aiming to improve and optimize the existing processes and facilitate supply chain management.
SEAT president Luca de Meo reportedly said that the company is “convinced of the relevance that blockchain technology will have in the future.”
In the meantime, SEAT and Telefónica have already begun jointly working on a proof-of-concept of a blockchain product that will track vehicle parts throughout the supply chain of SEAT’s factory located in Martorell, Spain.
Last month, American car manufacturing giant General Motors (GM) filed a blockchain patent for a solution to manage data from autonomous vehicles.
In September, German automobile manufacturer Porsche AG announced that it will increase its investments in startups — with a focus on blockchain and artificial intelligence (AI) — by around $176 million over the next five years. The investments target “early and growth” stage businesses that relate to “customer experience, mobility and digital lifestyle,” as well as future technologies including blockchain, AI, and virtual and augmented reality.
Co-founder of Ethereum and ConsenSys Joe Lubin has joined the board of directors of cryptocurrency exchange ErisX.
Founder of blockchain tech company ConsenSys Joseph Lubin has been appointed to the board of directors of cryptocurrency startup ErisX. The news was revealed in an official press release published Jan. 17.
Cryptocurrency exchange ErisX is a reboot of a futures market Eris Exchange, originally established in 2010. In December 2018, ErisX raised $27.5 million from Fidelity Investments and Nasdaq Ventures. In 2019, ErisX is expected to being offering both spot trading in Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC), and futures markets.
According to today’s announcement, Lubin has joined ErisX’s board of directors along with fintech entrepreneur Cris Conde.
The company highlighted Lubin’s expertise and “extensive background working in the digital asset space.” ConsenSys’ CEO further projected that “2019 is likely to be a breakthrough year for digital assets.”
Cris Conde, prior to joining ErisX, was a co-founder of software company Devon Systems, which in 1987 was acquired by SunGard, a provider of software for the financial industry. Under the leadership of Conde, SunGard reportedly became one of the few software and services firms to make the Fortune 500 list.
Last month, ErisX announced the appointment of veteran exchange founder Matt Trudeau as its chief strategy officer (CSO). In his new role, Trudeau will reportedly be tasked with exploring new avenues for revenue growth and driving the firm’s market structure efforts.
In October, retail brokerage firm TD Ameritrade, along with investing company DRW Holdings and high-speed trader Virtu Financial announced their backing of ErisX. The parties reportedly agreed to become market makers for ErisX, which is expected to ensure a deep order book for the exchange.
Crypto exchange Coinbase has acquired tech startup Blockspring, originally backed by venture capital firm Andreessen Horowitz.
San Francisco-based Blockspring produces tools that enable developers to automatically gather and process information from application programming interfaces (APIs).
In 2015, the company raised $3.4 million in a round led by venture capital firm Andreessen Horowitz and seed-stage investment firm SV Angel, while also having support from venture fund Y Combinator.
Following the acquisition, Blockspring will reportedly continue operating as an independent entity, while any changes to its business will not be binding on the company’s current and new customers.
Last month, Cointelegraph reported that a new application filed by Coinbase with the United States Patent and Trademark Office (USPTO) revealed that the exchange is seeking to trademark the crypto-industry term “BUIDL.”
The application revealed that Coinbase’s “BUIDL” software as a service (SaaS) solutions would include “software for managing, buying, selling, storing, transacting, exchanging, sending and receiving virtual currency.” Later in December, it was reported that Coinbase decided to drop its application.
In August, Coinbase acquired San Francisco-based startup Distributed Systems Inc., which works on decentralized identity solutions. With the new acquisition, Coinbase will purportedly work toward a decentralized identity system that will “let you prove that you own an identity, or that you have a relationship with the Social Security Administration, without making a copy of that identity.”
According to CoinMarketCap data, Coinbase is ranked 39th largest exchange in the world, with nearly $68 million in daily trade volume as of press time.
South African central bank has issued a jointly developed consultation paper, revealing that it does not intend to ban crypto.
The South African Reserve Bank (SARB) has issued a consultation paper assessing the benefits and risks of cryptocurrencies. The paper, developed jointly with a number of the country’s government agencies, was announced in an official statement published Jan. 16.
In the document, titled “Consultation Paper on Policy Proposals for Crypto Assets,” South Africa’s government clarifies that it does not intend to ban either cryptocurrency trading, or crypto payments at the moment.
The consultation paper further proposes that all crypto asset trading platforms, as well as custodial services, payment service providers, and crypto ATMs, should be required to register with the the Intergovernmental FinTech Working Group (IFWG). IFWG was recently established by the South African government with the goal of fostering fintech innovation while maintaining uninterrupted functioning of the financial markets.
The consultation paper has been jointly developed by several major state agencies, such as the Financial Intelligence Centre (FIC), Financial Sector Conduct Authority (FSCA), National Treasury (NT), South African Revenue Service (SARS), and the SARB, the central bank of South Africa.
According to the agencies’ joint statement announcing the paper, the document will be open to public feedback until Feb. 15, 2019.
In early January, Cointelegraph reported that South African government has launched a regulatory working group dedicated to cryptocurrencies and blockchain. The group is set to release a final research paper on the industry over the course of 2019, according to the country’s Minister of Finance Tito Mboweni.
In June 2018, the SARB revealed that it has successfully tested its Proof-of-Concept (PoC) for an interbank payment system that tokenizes fiat using Quorum, an Ethereum-based (ETH) private blockchain.
Sterling Witzke, partner at Winklevoss Capital, says she doesn’t think 2019 will be the watershed year for institutional investors to get into crypto.
Sterling Witzke, partner at the Winklevoss twins’ family office Winklevoss Capital, says she doesn’t think 2019 will be the watershed year for institutional investors to get into crypto. Witzke backed her claim by arguing that expectations are running ahead of facts on the ground.
Witzke made her remarks during an interview with Cointelegraph at the Crypto Finance Conference in St. Moritz, Switzerland, Jan. 17. She argued that the upshot of the 2017 crypto market bull run — when Bitcoin soared to all-time highs of $20,000 a coin — has been a skewed perception of what it takes for traditional capital to embrace innovation:
“Because the end of 2017 was so crazy, people tend to think the space moves at lightning speed [..] At the level of underlying [tech] development it [often] does [...] but I think it takes a while for institutions to get comfortable. There needs to be better custody, healthy debt and credit markets to get [them] really excited. So I don’t think 2019 will necessarily be the year.”
Witzke added that while she’s seen many investors thoughtfully dip their toes into crypto, she hasn’t really seen any take the plunge. Two factors she isolated as important were a lack of regulatory clarity — especially in the United States — and concerns over security.
As reported, the twins’ Gemini crypto exchange has recently launched an ad campaign which places a strong accent on solid regulation and compliance — encapsulated in slogans such as “crypto needs rules” and “crypto without chaos.” In light of some community opinions that this agenda runs counter to the original peer-to-peer ethos of crypto innovation, Witzke argued consumers in crypto deserve the same protections as traditional investors.
“The distinction comes,” she said, “between the protocol layer and the companies and applications that are built on top of it. At the protocol level, it’s absolutely correct you don’t need more regulations or rules, because those are already built in.”
A report issued last fall from “Big Four” auditor KPMG proposed that institutional investors are what is needed for the crypto industry to realize its potential as a full-fledged asset class — an opinion that is shared by many prominent voices within the crypto industry itself. Others have voiced concerns over the potentially adverse or — for some — unwanted impact of the increasing financialization of the sector.
In interviews tied to their recent ad campaign, Tyler and Cameron Winklevoss steered the conversation beyond regulatory matters, saying they believe that stablecoins and tokenized securities are today among the most exciting developments in crypto. Their view was echoed at Crypto Conference this week by Bitcoin Association Switzerland board member Luzius Meisser, who said “stablecoins are a precondition for average companies to bring their equity onto the blockchain.”
BitTorrent Speed system, which will integrate the Tron-based BTT token into the popular µTorrent Windows client, will launch by summer.
BitTorrent’s system dubbed BitTorrent Speed, which will integrate the Tron-based BTT token into the popular µTorrent Windows client, will launch by summer. The company has confirmed this in a press release shared with Cointelegraph on Jan. 19.
BitTorrent Speed will issue cryptocurrency token rewards to users that serve content to others via the µTorrent network. The client’s users — which number more than 100 million, according to BitTorrent — will also be able to pay for faster downloads with the same tokens.
The company also announced that to all accounts that are not based in the United States, the token will only be available for purchase on the Binance Launchpad platform.
BitTorrent is a peer-to-peer (P2P) communication protocol for online file sharing, and the eponymous company that maintains it. The BitTorrent network is similar to Bitcoin in structure, as they both support decentralized sharing of information and lack a single point of authority.
Earlier this month, Cointelegraph reported on the launch of the BTT token. The project is reportedly part of BitTorrent’s broader ambition to create a decentralized content distribution platform using cryptocurrency.
Former chief strategy officer at BitTorrent, Simon Morris, claimed in a recent interview that Tron will not be able to manage the transaction volume needed to tokenize BitTorrent.
In response to Morris’ claims, a Tron spokesperson told Cointelegraph in private comments:
"Morris appears to have little insight into BitTorrent operational plans since his departure. Actions and execution will prove louder than the words of a disgruntled former employee."
New Zealand-based digital assets exchange Cryptopia was allegedly hacked on Jan. 15.
In what seems to be one of the first major security breaches of 2019, New Zealand-based digital assets exchange Cryptopia was allegedly hacked this week. The platform reported the incident via Twitter on Jan. 15, mentioning “significant losses.” While the incident has been confirmed by the local police, many crucial details — including the amount and titles of stolen tokens — remain undisclosed.
Brief introduction to Cryptopia, an essential exchange for altcoins
Cryptopia Limited, the company behind the self-titled exchange, was registered in July 2014, and the platform itself was launched later the same year. It is run by founders Rob Dawson and Adam Clark, who initially started it as a hobby born out of negative experiences with other crypto exchanges. Around January 2017, they allegedly quit their full-time jobs to focus solely on Cryptopia. The firm’s office is located in Christchurch, Canterbury, and there are around 50-100 people employed there.
According to the New Zealand Government Companies Register, Cryptopia has a total of 90 shareholders. The majority of shares are controlled by Dawson and Clark, who hold 30.57 percent and 27.46 percent respectively. A substantial portion of the stock — 25.52 percent — is also held by a local software development and consultancy services called Intranel, while the rest of shares seem to be controlled by the co-founders’ relatives and private investors.
As per Cryptopia’s LinkedIn profile, the company has “the world’s largest range of cryptocurrencies.” Indeed, the exchange has more than 830 cryptocurrencies listed, according to CoinMarketCap, which makes it one of the chief platforms for altcoin trading.
The data obtained from Coingecko suggests that Cryptopia’s peak trading volume this year occurred on Jan. 11, when it reached around $1,875,000. The crypto exchange reportedly has around 1.4 million registered users and is the largest crypto exchange in the country. In May 2017, Cryptopia launched NZed (NZDT), allegedly the first stablecoin tethered to the New Zealand dollar.
The incident was originally reported as “unscheduled maintenance”; the police are on the case
The episode can be traced back to Jan. 14, when Cryptopia published a series of short tweets regarding “unscheduled maintenance.” Interestingly, the platform issued somewhat similar updates in June 2018, causing concern among users, who later reported withdrawal difficulties.
Nevertheless, next day, on Jan. 15, Cryptopia officially announced that it was hacked the day before. According to the note shared by the platform, after finding out about the security breach, the exchange’s staff freezed all operations to assess damages.
The exchange has also reportedly notified government agencies and authorities, including the New Zealand Police and High Tech Crimes Unit, who have opened an investigation into the matter and are reportedly treating the incident as a major crime. On Jan. 16, the police confirmed that they are investigating the case.
“The inquiry is still in its very early stages and police are continuing to work with Cryptopia to establish what has happened and how.”
According to local media outlet Stuff, on Jan. 16, the police locked down Cryptopia’s office in Christchurch while some of the staff remained inside. The authorities later reported that the exchange’s staff are fully cooperating with the investigation team, but noted that media reports claiming that police “stormed” the building are “entirely incorrect.”
Further, the authorities are reportedly establishing a dedicated investigation team, including “specialist police staff with expertise in this area." The Financial Markets Authority (FMA) has also been called in, according to Stuff.
The FMA spokesman cited in the article said the watchdog did not regulate Cryptopia or the cryptocurrencies listed there, “but those providing a financial service related to cryptocurrencies needed to register on the Financial Services Providers Register — which enabled customers to access an independent dispute resolution service.” According to the regulator’s website, New Zealand firms who provide a financial service related to cryptocurrencies need to comply with the “fair dealing” requirements in the Financial Markets Conduct Act 2013.
The stolen amount remains undisclosed; social media estimates $3 million to $13 million being taken
While Cryptopia’s website is still under maintenance as of press time, the exchange has not revealed which tokens have been stolen and to what extent, limiting its comment to state that the losses are “significant.” The company has since stated that they will not be providing a comment due to the ongoing police investigation.
However, the police are also yet to confirm the exact amount of stolen money. As per their press release issued on Jan.16:
“Police are not yet in a position to say how much cryptocurrency is involved, other than it is a significant amount. A large team, including Canterbury CIB and specialist staff from the police High Tech Crime Unit, have been assigned to the case.”
With both Cryptopia and the authorities being unable to reveal concrete details of the alleged hack, the community has taken the matter into its own hands. Social media users have pinpointed one of the hacker’s alleged wallet addresses, highlighting large transaction numbers, as well as the timing of transfers, which reportedly occurred after the site went into maintenance mode.
If true, the criminals have stolen an abundance of ERC-20 tokens, including Dentacoin, Metal, Ormeus Coin, PowerLedger, Revain, Zap Token, TrueUSD, Centrality, InvestFeed, PILLAR, Golem, Jetcoin, Fabric Token, DALECOIN, Soniq, VOISE, SpankChain, Mothership and Oyster Pearl, among others.
“At this stage I'd probably believe reports of $11 [million] + USD equivalent hack,” Reddit user u/spronky writes, “I wouldn't be surprised if all the ERC-20 tokens in Cryptopia's hot wallets were thieved [sic].”
According to another Reddit investigation, a total of $13,000 worth of cryptocurrencies could have been stolen from Cryptopia. User u/toldjahP has collected numerous wallet addresses affiliated with the alleged hackers and combined the transfers, which equalled the above mentioned figure. Similar addresses have been marked by Twitter community members as well. While some of those wallets appear to be empty as of press time, one of them holds as much as $3.6 million.
Community is not rushing to call it a “hack”
News of the incident has been met with concern and some scepticism in the crypto community, whose members have suggested that the incident could have been an “inside job” or “exit scam.” For instance, industry Twitter personality WhalePanda notably placed the word “hack” in quotation marks, while commenting on the matter:
“Interesting that this happens in a bear season where small exchanges are struggling to make ends meet and are aggressively messaging anyone involved with crypto projects to get them to pay listing fees to get listed on their platforms.”
In response to WhalePanda’s tweet, a couple of commentators have gone so far as to investigate Cryptopia’s recent transactions, claiming the exchange had moved Ethereum (ETH) worth several millions of dollars out of its wallet on Jan. 13, citing data from crypto exchange blockchain monitor Whale Alert. That correlates with Cryptopia’s previous announcement regarding the Ethereum’s (ETH) Constantinople hard fork, when the exchange warned its users that it was placing ETH and all ERC-20 tokens into maintenance between Jan. 14 and Jan. 18. The exchange then advised its users to move their ETH to “a wallet where they have a control of the private keys.”
Some of funds have been frozen, Cryptopia users are preparing a lawsuit
It seems that at least some of the stolen tokens have been frozen. On Jan. 16, after being tagged by a Twitter community member, Binance exchange CEO Changpeng Zhao said that he suspended “some” of the funds affiliated with Cryptopia after they ended up on his platform’s wallets and claimed that he will freeze more if social media users report them.
Similarly, other Twitter users have published screenshots suggesting that coinexchange.io has also been warned about some of the stolen funds from Cryptopia being traded on their platform.
As for the legal aftermath, the situation is also unclear at this point. According to local media and radio outlet Radio NZ, up to 40 Cryptopia users have come forward to legally demand an explanation as to why their funds are inaccessible.
“We were contacted initially by about three people [last year], including a South African lawyer, who were complaining that they were having trouble transacting using their wallets and couldn't withdraw funds,” the lawyer handling the case told the publication.
Major U.S. universities including MIT, Stanford and UC Berkeley have teamed up to fund a new digital currency.
The development of the cryptocurrency, dubbed “Unit-e,” is being funded by Distributed Technologies Research (DTR) — a non-profit organization based in Switzerland, whose official launch was also announced today in the press release.
DTR includes researchers from seven major U.S. universities, including the Massachusetts Institute of Technology (MIT), Stanford University and the University of California, Berkeley, as Bloomberg reports.
The organization reportedly received backing from blockchain investment fund Pantera Capital.
According to the press release, the core team developing Unit-e is based in Berlin and consists of “open-source and distributed systems engineers.”
Joey Krug, a member of the DTR Foundation Council and Co-Chief Investment Officer at Pantera Capital, claimed that “a lack of scalability is holding back cryptocurrency adoption.”
As Bloomberg reports, DTR is planning to launch Unit-e in the second half of this year. The organization told reporters their goal for the cryptocurrency’s processing time is 10,000 transactions per second.
On Dec. 23, the capacity of the Bitcoin (BTC) Lightning Network (LN) surpassed $2 million in transactions, with node channels that support LN able to facilitate 496.8 BTC. With that, the number of channels connecting nodes has also significantly grown for the first time for the past two months, totaling 14,352 unique channels by late 2018.
In October 2018, post-trade financial services firm Depository Trust & Clearing Corporation published a study that found that blockchain technology is scalable enough to support day to day volumes of U.S. equity markets.
BitPay reports seeing over $1 billion in transactions this past year, along with record high transaction fee revenue.
According to the report, the company also set a new record for itself in terms of transaction fee revenue. Among major new customers this past year, BitPay named Dish Networks, HackerOne, and the State of Ohio.
BitPay also reported that its B2B business has grown by almost 255 percent from 2017.
Despite a massive crypto decline in 2018, BitPay’s CEO and co-founder Stephen Pair argued that the firm saw growth over the year because its product is “cheaper and quicker than a bank wire from most regions of the world.”
While BitPay is reportedly still focuses on Bitcoin (BTC), the service reports that it has also added settlement support for other cryptocurrencies, namely as Bitcoin Cash (BCH), and stablecoins USD Coin (USDC), the Gemini dollar (GUSD) and Paxos Standard (PAX).
In April, BitPay secured $40 million in a Series B funding round that included major crypto and IT industry players such as Tencent co-founder Alvin Liu and Christopher Klauss Family Office, Founder of Internet Security Systems (ISS), a firm acquired by IBM in 2006.
In late 2018, BitPay’s CEO claimed that he expects mass Bitcoin adoption to come in three to five years. In November, BitPay’s chief commercial officer, Sonny Singh, predicted that Bitcoin’s price will soar to between $15,000 to $20,000 by the end of 2019.