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Tom Lee has lowered his expectations for Bitcoin’s price at the end of the year to $15,000 from the previous $25,000.
According to Lee – the co-founder of market advisory firm Fundstrat Global Advisors – the key factor behind his new target is Bitcoin’s “break-even point,” or the level at which the cost to mine Bitcoin matches its trading price, as CNBC reports. According to Fundstrat’s data, this point is at around $7,000.
Bitcoin is currently trading well below this value – $5,550 at press time. According to CNBC, however, Lee told clients in a note Friday that BTC has “never sustained a move below breakeven [sic].”
While he is strongly betting on recovery, Lee acknowledges that breaking “below that psychologically important $6,000” leads “to a renewed wave of pessimism.” Moreover, he also added:
“But we believe the negative swing in sentiment is much worse than the fundamental implications.”
Lee cites “crypto-specific events” as the cause of the recent downturn in the cryptocurrency markets Nov. 14, according to CNBC. More specifically, the recent Bitcoin Cash hard fork has divided the community, other experts agreeing with Lee that the event has contributed to uncertainty in the markets resulting in the recent crash.
The recent price decline across crypto markets has been the first significant price movement among top coins, and for Bitcoin in particular. In early November, Lee said that he was “pleasantly surprised” by Bitcoin’s stability. At the time, he also believed that the asset had found “its floor at $6,000.”
Details of Russia’s national stablecoin have surfaced.
On November 7, the chairman of Russia’s State Duma Committee on Financial Markets announced details of the “CryptoRuble,” a long-discussed government cryptocurrency project.
Specifically, the official said that a state-backed stablecoin would be a complete equivalent to the Russian fiat ruble, but in a digital space. Russian authorities have now ended up with this concept after years of contradicting statements, and still, a ruble-pegged stablecoin might not turn out stable in the end.
Long and complex history of national cryptocurrency in Russia
Russian national cryptocurrency was originally referred to as “Bitruble,” but then the term “CryptoRuble” became more common in the media.
The history of CryptoRuble could be traced back to the fall of 2015, when a Moscow-based online payment settlement system, WebMoney, and Cyprus-headquartered payment service provider, Qiwi, separately approached the Central Bank of Russia (CBR) and offered to issue a state-controlled digital currency in the country.
Both proposals were vigorously denied by the government. Specifically, the Russian Ombudsman, Pavel Medvedev, called Qiwi’s suggestion “technical hooliganism” that is “illegal” and “absolutely inappropriate.”
“The Constitution says who has the right in Russia to issue money; it is the [Russian] central bank. The only currency in Russia is the ruble. The rest of the money is illegal, and this kind of disgrace [would be] a criminal offense.”
However, the Russian government’s views towards “CryptoRuble” have been considerably inconsistent to this date. Thus, in May 2016, Russian newspaper Kommersant reported that local officials were discussing the concept of a national cryptocurrency that would “minimize the amount of anonymous transactions,” citing the Assistant Director at Russia’s Federal Financial Monitoring Service (Rosfinmonitoring), Pavel Livadniy.
On June 2, 2017, the CBR announced it was developing a national cryptocurrency. “We will definitely get to a national digital cryptocurrency. We have already started working on it,” CBR’s deputy chairwoman, Olga Skorobogatova, told news agency Ria Novosti.
Several days later, on June 5, the head of the CBR, Elvira Nabiullina, elaborated on Skorobogatova’s statement, adding that a national cryptocurrency was not the agency’s top priority. Nabiullina called it “a medium-term, or, perhaps, a long-term” plan, however.
In October, 2017, President Vladimir Putin claimed that cryptocurrencies “cause serious risk” and are used for crime, as the CBR said it would block websites selling Bitcoin and altcoins. Just a month prior to that, Russia’s Finance Minister, Anton Siluanov, argued that the authorities had to accept the idea of the digital currencies market:
“There is no sense in banning them, there is a need to regulate them.”
Also in October 2017, local news media, Argumenti i Fakti (AiF), reported that Putin “gave a direct order” to develop the “cryptoruble.” The news article quoted Minister of Communications, Nikolay Nikiforov, as its source. Nikiforov also reportedly mentioned specifics of the national cryptocurrency for the first time. According to the official, the “CryptoRuble” could not be mined; and it could be exchanged for regular rubles at any time (though if the holder is unable to explain where the CryptoRubles came from, a 13 percent tax will be levied). The same tax would be applied to any profit made from trading the token. Nikiforov said:
“I confidently declare that we run CryptoRuble for one simple reason: if we do not, then after two months our neighbors in the EurAsEC [The Eurasian Economic Community] will.”
However, that report was not confirmed by mainstream media, and it is still unclear if Putin gave his approval for the above mentioned concept. As soon as next month, in November 2017, Nikiforov argued that the term “CryptoRuble” was “quite incorrect,” and suggested calling it “a digital token.”
In December 2017, the government news agency, TASS, reported on a recent meeting dedicated to the legislation for digital currencies in the country. The article argued that both the Ministry of Finance and the Central Bank of Russia were skeptical about issuing a national cryptocurrency.
On Jan. 1, 2018, the Financial Times reported on another government meeting, where Sergei Glazyev, economic adviser to President Putin, allegedly argued that the CryptoRuble could help relieve the pressure of Western sanctions. Later, the concept will be picked up by countries like Iran and Venezuela, who also aim to use their national cryptocurrency to bypass such penalties.
However, there was still no unified official stance from the Russian government on the matter of issuing a national digital currency. And the indecisiveness continued.
A few weeks later in the same month, the Russian Association of Cryptocurrency and Blockchain (RACIB) announced that the CryptoRuble will be launched in the middle of 2019. According to Arseniy Sheltsin, the head of RACIB, details of the project will be officially presented and discussed in July 2018, while the coin itself should be issued a year later.
In June 2018, Putin claimed that Russia cannot have its own cryptocurrency, as cryptocurrency “by definition” cannot be owned by a centralized state, since it “goes beyond borders.”
“Cryptoruble” finally turns into a stablecoin
After a long back and forth on the topic within the Russian government, the cryptoruble finally morphed into a more concrete concept.
On Nov. 2, 2018, the chairman of Russia’s State Duma Committee on Financial Markets, Anatoly Aksakov, said that his agency is considering the launch of state-backed cryptocurrency pegged to the Russian ruble.
The official expressed his confidence that the government will back such cryptocurrency, clarifying that “it will be a ruble-pegged cryptocurrency.” The deputy also added that the implied coin will represent a blockchain-powered stablecoin pegged 1:1 to the ruble.
Aksakov further described the model of creating the stablecoin, stating that the cryptocurrency will be backed by a banking deposit of a certain amount. After that, a banking institution is set to issue a corresponding amount of crypto assets by using blockchain and adhering to the 1:1 proportion.
The chairman also clarified that the cryptocurrency will be issued by the central bank since it is backed by fiat currency. In conclusion, Aksakov noted that the implementation of blockchain technology in terms of the issuance of “crypto-money” is “promising.”
Interestingly, Aksakov is the same official who erased all mention of Bitcoin and Ethereum from a draft bill on digital currency regulation ahead of its reading in the State Duma in October 2018. He explained the move by saying “we decided we don’t need them, those ambiguous Bitcoins.”
On November 7, Aksakov provided even more detail regarding the national-issued stablecoin. Specifically, he said that the “cryptoruble,” which may appear after the adoption of laws regulating the cryptocurrency industry in Russia (which are also consistently changed and delayed), would be “the same ruble, just in encrypted form.” The State Duma chairman explained that it would be possible to change the Russian stablecoin for the equivalent in fiat money:
"For example, you bring 100 thousand rubles to a bank and get 100 thousand crypto rubles, one to one for fiat money. You use these funds to buy goods fixed in the blockchain.”
Aksakov also underlined that the crypto ruble — “the ruble in blockchain” — would replace the fiat ruble “as soon as the blockchain begins to occupy a significant place in our economy.” He did not specify what type of blockchain that was, however. Previously, Minister of Communications Nikiforov argued that the “CryptoRuble” should be based on a locally-developed technology.
How stable might it be?
Issuing a stablecoin that is pegged to the Russian ruble might seem somewhat questionable from an economic perspective, as the currency has not shown consistent growth, or even stability over the past years. On the contrary, it has been on constant decline since the political tension between Russia and the West intensified in 2014.
More specifically, the price of the ruble plummeted on Dec. 16, 2014. The “Russia Trading System” (RTS) Index, denominated in U.S. dollars, fell 12%, the most on any given day since the midst of the global financial crisis in 2008. On December 15, Russian gold and foreign currencies reserves were reduced by "U.S. $15.7 billion, to below U.S. $400 billion, for the first time since August 2009," as the government began fighting its “worst financial crisis since 1998,” as per Reuters.
It happened mainly due to two factors: first, the price of oil — the commodity upon which the Russian economy is largely built — began to fall sharply, forcing the CBR to raise interest rates by a hefty 650 basis points. Secondly, strict Western sanctions imposed against Russian companies that have been rolled out in response to Russia’s annexation of Crimea earlier in 2014, have played their role in the ruble’s dramatic fall as well.
The ruble crash had a significant impact on the Russian economy — as a result of the fall, local people were financially challenged. Annual inflation climbed to more than 10 percent. Prices of goods, including beef and fish, rose 40 to 50 percent within a few months before the end of the year, due to Russia's ban on Western imports — the government’s countermeasure to the U.S. and European sanctions. Car sales fell by 12 percent, comparing to the previous year.
The situation somewhat stabilized over the next couple of years, but ruble to U.S. dollars rates have remained high since. The local ban on Western imports stayed as well, considerably limiting Russians’ consumer behavior.
In August this year, the situation was somewhat repeated once again, although to a smaller degree. Russia’s ruble fell to 69.40 against the dollar, its lowest level in two years. The CBR blamed the slide in the ruble’s value on new U.S. sanctions introduced by the Congress over a chemical-weapon attack in Salisbury and reports on Russia’s interference in the U.S. presidential elections in 2016.
If a ruble-pegged cryptocurrency is given a green light from Russian authorities after a years-long exchange of contradicting comments, the “cryptoruble” price could be doomed to go through unexpected, politics-driven price spikes.
Recently released crypto market research characterizes ICO performance in Q3 2018 with “overall disappointment,” citing increased regulatory scrutiny.
As the report states, Q3 2018 saw 597 ICOs raise over $1.8 billion, a notably lower value than the over $8.3 billion reportedly raised in the previous quarter. A similar decline in investment has been reported in traditional Venture Capital (VC) funding for blockchain projects.
In the report, the decline in funding is accompanied by a median return on investment (ROI) of -22 percent in Q3 2018. As the report states:
“The same indicator was +49.32% in the 1st quarter and −55.38% in the 2nd quarter.”
Regulation is in part cited as a cause for the downtrend, with the increasing crackdown on this fundraising method by the U.S. Securities and Exchange Commission (SEC) putting “hundreds” of projects at risk.
During Q3 — from July to September 2018 — ICO funding overall has fallen by 48 percent. A more significant fall of over 78 percent was reported in September — the last month of the third quarter — when compared with May, the middle of the second quarter.
ICO funding and success. Source: ICORating
ICORating’s report also stated that 57 percent of ICO projects that raised funds in Q3 were not able to secure over $100,000.
Of all the tokens sold to investors during an ICO in Q3, just 4 percent ended up listed on exchanges, compared to 7 percent reportedly listed in Q2 of this year, ICORating notes.
The report also mentions that 19 percent of “projects with previously announced ICOs” in Q3 have deleted their websites and social media accounts, a reported 10 percent more than in the second quarter. Those projects that disappeared after collecting funds attracted 3 percent of the total ICO funding in Q3, which amounts to about $62.1 million, the report states.
The research also covers the stages at which projects tend to start their ICOs: of all the projects included in the study from Q3, 76.15 percent were at the “idea stage” when they ran their ICO – 18.72 percent more than in the previous quarter.
When it comes to the choice of the platform for token sales, Ethereum remains king with 83.75 percent of ICOs choosing to release their token on its blockchain.
Looking more broadly to the last year, the ICO market has been fluctuating, registering two peaks concerning both the number of projects and amount of capital raised in December 2017 and March 2018.
As Cointelegraph previously reported, funds raised by ICOs during October increased 26 percent when compared to September, from $403.1 million to $508.54 million, despite only 54 projects having raised $1 or more.
A Santa-themed trading bot is giving crypto enthusiasts the chance to capitalize on volatility and hopes automation will help them sleigh in the marketplace.
A cloud trading software platform argues the public has the chance to take advantage of volatility in the cryptocurrency marketplace through automated trading – “maximizing their opportunities” and enabling their assets to appreciate.
Trade Santa says its cloud software platform is designed to automate simple strategies relied upon by thousands of traders around the world. Its bot is free to use, and the company hopes to ensure capitalizing on fluctuations in cryptocurrencies doesn’t need to be a full-time job.
The team behind the Santa Bot says it takes about 10 minutes to set it up and configure the user’s desired trading parameters – such as pairings and profit targets. Detailed tutorials are provided to guide them through every step of the process.
A bot’s ability to trade is delivered through API keys from supported crypto exchanges, and the platform says this means it cannot access user funds or withdraw them without permission. At present, the Santa Bot supports six exchanges, including Poloniex, Binance, Bittrex, Bitfinex, KuCoin and HitBTC.
Unlimited numbers of bots and trading pairs are available to users, and they are also able to perform long and short strategies simultaneously if they so wish. Technical indicators enable the bot to open deals at optimal moments to maximize potential profitability.
The company says bots can place up to 100 times more orders when compared to users who trade manually, and this is because bots can track market movements for dozens of trading pairs simultaneously. All of this can happen 24 hours a day, all year round without permanent attention from the user.
HO, HO, HODL
Trade Santa says it has protections in place should automated trades not go to plan. Extra orders involve a bot buying a specified number of tokens to compensate for unexpected shifts in the market and move take profit orders accordingly.
Its founders argue that automated trading helps to remove emotion from the process – helping investors to avoid chasing losses or making bad decisions in the heat of the moment.
Given the 24-hour nature of the crypto trading world, where dramatic swings in price happen at any time of the day or night, it is hoped the bot will help investors to stay on top of market movements even if they’re away from their computer or asleep.
Getting used to the interface
Through the Trade Santa interface, users are able to review the most successful pairs on each exchange over the past 24 hours – or for more immediate analysis, over a three, six or 12-hour period.
A dashboard enables crypto enthusiasts to get a summary of how their bots are performing. In addition to showing estimated calculated profits, users can see the deals currently in progress, their balance in Bitcoin, and the USDT/BTC exchange rate.
Support is provided through the platform’s Telegram community, and a live chat service can be found on the website, which is unsurprisingly known as “Santa’s Helper.”
Although automation can have its advantages, many experts caution against relying on them altogether. This is because they often can’t react to developments in the news – where a tweet from a crypto company can have huge ramifications for a coin’s price, upwards or downwards. Getting the right results also hinges upon extensive backtesting, where strategies are applied to historical data to get a feel for what the outcome would have been in the past. Even then, past performance cannot always accurately indicate what lies ahead in the future.
As Trade Santa gains traction in the crypto community, the team says its platform will remain free. Subscription pricing is set to be introduced from January 2019.
Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.
The West Virginia Secretary of State has announced that 144 voters successfully cast their ballots in the 2016 midterm elections on a mobile, blockchain-based platform.
Warner stated that in the 2018 midterm elections, 144 military personnel stationed overseas from 24 counties were able to cast their ballots on a mobile, blockchain-based platform called Voatz, adding:
“This is a first-in-the-nation project that allowed uniformed services members and overseas citizens to use a mobile application to cast a ballot secured by blockchain technology.”
Voting for the general elections on the platform started in September, when absentee balloting opened in West Virginia.
The first trial of the new platform took place during the state’s primary elections in April. Blockchain-based ballots were then restricted to a select group of voters such as deployed military members and other citizens eligible to vote absentee under the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA) and their spouses and dependents.
The Voatz system was initially developed to address the issue of low voter participation among members of the military. According to Symantec — the firm behind the Voatz system — only 368,516, or 18 percent of the 2 million service members and their families serving overseas received ballots in 2016. After counting rejections and tardy ballots, only 11 percent of said votes were counted.
While Warner noted the project’s success, his deputy chief of staff Michael Queen told the Washington Post that they have no plans for expanding the program beyond military personnel serving overseas:
“Secretary Warner has never and will never advocate that this is a solution for mainstream voting.”
According to data from the United States Elections Project, West Virginia ranks 44th of 50 states in voter participation at 42.6 percent.
Some experts have expressed concern over the safety of mobile voting. Joseph Lorenzo Hall, the Chief Technologist at the Center for Democracy and Technology, claimed:
“Mobile voting is a horrific idea. It’s Internet voting on people’s horribly secured devices, over our horrible networks, to servers that are very difficult to secure without a physical paper record of the vote.”
Conversely, Bradley Tusk of Tusk Montgomery Philanthropies has encouraged mobile voting, stating that it can turn out more voters, and as a result, “democracy would work a lot better.” Tusk Montgomery Philanthropies helped fund the Voatz app’s development.
In order to help immigrants in ICE custody pay their immigration bonds, the Bail Bloc project mines XMR using volunteers’ computer power.
The Bail Bloc initiative has started using cryptocurrency raised through charity to help people get out of U.S Immigration and Customs Enforcement (ICE) pretrial incarceration, according to a tweet posted by a Bail Bloc co-founder Nov. 15.
ICE is a law enforcement agency of the federal government of the U.S, the mission of which is to monitor cross-border crime and illegal immigration. In 2017, the agency conducted 143,470 overall administrative arrests, 92 percent of which resulted in a criminal conviction or a pending criminal charge.
In ICE detention people are required to pay an immigration bond in exchange for their immediate-term release, although statistically only 47 percent of those in detention are given a bond hearing. Those who cannot afford to pay the bond, or who are not granted a bond at all, must wait for their court hearing while detained, which could last from months to years.
Bail Bloc has set a goal to help charged immigrants pay their bail with money raised through cryptocurrency mining. The initiative has released an app that consumes a small portion — from 10 percent by default to 50 percent optionally — of users’ computer power to mine Monero (XMR) once it is installed.
The organization states that at the end of every month it exchanges XMR for U.S. dollars and donates the earnings to the Immigrant Bail Fund in New Haven, Connecticut. Bail Bloc has reportedly mined 44.34 XMR, which equates to $7,356.36 U.S. dollars. This sum is enough to bail out 12 people, per the organization’s website.
Bail Bloc says it chose XMR as it is an ASIC-resistant cryptocurrency, meaning that consumer-level computers are able to mine the coin “in a financially viable way,” while computers designed with the sole purpose of crypto mining cannot.
ICE’s approach to immigration policy enforcement has sparked significant controversy in the U.S. In May, reports of federal authorities losing track of nearly 1,500 immigrant children in their custody made headlines. As the Washington Post reported, the children had been separated from their immigrant parents. Per the policy of prosecuting “100 percent” of those crossing the border illegally, children were separated from their parents as the adults were charged with a crime.
At press time, XMR is trading at around $87, down 0.82 percent over the past 24 hours, according to CoinMarketCap. The coin’s market capitalization is around $1.4 billion, while its daily trading volume is about $18.9 million.
Bitcoin scammers that recently hacked Google and Target verified accounts reportedly gained access via a third-party app authorized to post content.
A recent Bitcoin scam on Twitter that compromised several major companies verified accounts came from a third-party app, tech news outlet the Next Web (TNW) reports Friday, Nov. 16, citing social media officials.
Speaking to TNW, a Twitter spokesperson confirmed that the attack came from an outside software provider and not from Twitter’s own system. However, the official refrained from naming the app.
The spokesperson reportedly explained that the attackers exploited a third-party marketing solution to launch a Bitcoin (BTC) giveaway from several verified accounts, including Google’s G Suite and major U.S. department store retailer Target.
The information was implicitly confirmed by Target. Its representatives told TNW that the hackers used a third-party marketing app, authorized to post content on Target’s behalf.
As Cointelegraph previously reported, on Wednesday, Nov. 14, hackers took over G Suite and Target accounts (800,000 and 1.92 million followers, respectively) and posted malicious cryptocurrency giveaway links. The message in G Suite’s account also falsely claimed that users could make payments in G Suite using cryptocurrencies.
Moreover, in early November several verified Twitter accounts, including those of film production firm Pathe U.K. and U.S. politician Frank Pallone Jr., were breached to pose as Elon Musk. Once hackers gained control of accounts, they changed the profile picture and name in order to pose as Elon Musk and offer scammy Bitcoin giveaways.
Bitcoin scammers have already posed as Elon Musk for several times, prompting the Tesla founder to seek help from Jackson Palmer, the creator of Dogecoin (DOGE), who claimed to have invented an anti-scam script.
Cryptocurrency project TRON has announced an accelerator program to support developers building decentralized apps on the TRON protocol.
Decentralized Internet project TRON (TRX) is launching a $1 million accelerator program to support developers building DApps and products on the TRON protocol, according to a press release shared with Cointelegraph Nov. 16.
The initiative aims to facilitate consumer adoption of blockchain technology through TRON’s ecosystem following the recent acquisition of peer-to-peer file sharing service BitTorrent, Project Atlas, and payment service Poppy app. TRON’s protocol currently processes more than one million transactions and 600,000 wallets.
The startup will purportedly accept submissions to its accelerator through December, while the winners will be announced at TRON’s first international summit in January.
In October, TRON and China's largest Internet search provider Baidu announced they will cooperate on cloud computing resources. The partnership between the two firms remains focused on the purchase and use of Baidu's basic cloud computing resources, rather than being a connection “at the blockchain business level.”
Also in October, TRON’s CEO Justin Sun claimed its update dubbed Odyssey 3.1 would see it beat Ethereum on speed and EOS on cost. The changes include the launch of the TRON Virtual Machine, which would allow developers to test smart contracts before they transfer to the TRON mainnet.
As of press time, TRX is the 11th top cryptocurrency, trading at around $0.018, up by 0.27 percent on the day, according to CoinMarketCap.
BAML strategists have suggested that recent oil and crypto market dives are indicators of an approaching “flash crash.”
The strategists reportedly suggested that rising volatility across various asset classes and deleveraging, such as that which happened in oil markets over the past weeks, are signs of the evolution of a bear market.
On Nov.14, Bitcoin (BTC) price slumped below $5,400, while total market capitalization of all cryptocurrencies dropped as low as $174 billion. The price dive marked a new volatility record for markets this year, while the BTC volatility rate exceeded the index of seven on Bitcointicker for the first time since April 2018.
On Tuesday, Brent crude reportedly hit an eight-month low, making it the most extreme one-day fall in over three years. As a result of the current bear market, cash has outperformed stocks and bonds this year for the first time since 1992. The strategists reportedly said:
“Ingredients of flash crash rising ... bond, FX, equity volatility all trending up, vicious deleveraging events, dislocation risk via abnormal spreads ... triggers could be violent U.S. dollar move and/or shock macro data forcing abrupt GDP and earnings downgrades.”
The analysts told Reuters that, despite bearish signals, $122 billion has flowed into equities, $35 billion into money market funds, and $24 billion into bonds. At the same time, markets saw large outflows from corporate bonds, where investment grade corporate bond funds lost $2 billion and high-yield bond funds lost $2.3 billion.
The “last bulls standing” are high-yield corporate bonds and the U.S. dollar, according to the strategists. The U.S. dollar will purportedly rise by the end of the current year and continue climbing further in the first quarter of 2019 before falling.
Fundstrat analyst Rob Sluymer predicted that Bitcoin’s collapse on Nov. 14 pushed crypto markets into a “deeply oversold” area, while “longer-term technical indicators aren’t so favorable.” Sluymer concluded that Bitcoin will be able to support a “multi-month rally,” but only after the “significant” damage done this week has been overcome.
Yesterday, a trader at eWarrant Japan Securities K.K. in Tokyo, Soichiro Tsutsumi, told Bloomberg that the loss of $6,000 support looks like a “dangerous sign” for industry players, especially the ones with “business models reliant on a client pool.”
Bitcoin saw its third worst drop of 2018 on Nov. 14, as it broke down to new year-to-date lows. After the recent fall, how should traders approach the markets?
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.
Bitcoin saw its third worst drop of 2018 on Nov. 14, as it broke down to new year-to-date lows. In doing so, it broke through the critical support of $5,900, which had held throughout the year. Prior to the breakdown, Bitcoin had entered a period of low volatility not seen in years.
We were expecting the resolution of the tight range in cryptocurrencies to be to the upside, hence, our bias was on the long side. However, with the fall, the technical picture has weakened, and our assumption was proven wrong. We need to reassess our strategy in this new backdrop.
Interestingly, not all cryptocurrencies have followed Bitcoin to new year-to-date lows. There are a few that have held out quite well. Ripple has overtaken Ethereum as the second most valuable cryptocurrency in terms of market capitalization. So, there are some bright spots even in this mayhem.
Bitcoin Cash has completed its fork without any major incident. However, as it is still in its early days, we have skipped analyzing either coin today.
After the recent fall, how should traders approach the markets? Is it time to step aside and wait, or do some cryptocurrencies offer a buying opportunity? Let’s study the charts and find out.
Bitcoin plunged below the support of $5,900 on Nov. 14, to an intraday low of $5,737.02. The closing (UTC time frame) of the day was at $5,932.75, which shows buying near the lows. Nevertheless, the bears continued their selling the next day, plummeting prices further to $5,430.02, which was just below the support at $5,450. Some buying was seen again at the lower levels as the digital currency recovered lost ground and closed at $5,747.05.
The pullback from the intraday lows in the past two days shows that the lower levels are attracting buying. This points to a retest of the breakdown level of $5,900 in the next 4–5 days.
The performance of the BTC/USD pair at the $5,900 levels will give us a better idea on what to expect. If the bulls easily breakout and sustain above $5,900, then this current fall will be a fakeout, which took out all the weaker hands on the long side, before moving up.
On the other hand, if the bears defend the $5,900– $6,075 levels and the virtual currency turns down from there, it will indicate selling by the long positions stuck at higher levels and short initiation by traders who anticipate lower levels in the future.
So, what should traders do?
A new year-to-date low shows weakness, hence, long positions should not be initiated until a bottom is confirmed. As the RSI is deep in the oversold territory, a short position is also not advisable, because a sharp pullback can occur at any time. Due to the uncertainty, it is best to sit out and wait for a few days.
If price scales $5,900 and sustains above it, we might attempt to go long once again. Any break above $6,832 will be a confirmation that a new uptrend has started. Until then, the digital currency is at a risk of turning down again.
Analysts will mention various lower levels that can be scary. Let’s take it one step at a time and act accordingly, without being influenced by the noise.
Ripple is showing considerable strength and is well above its year-to-date lows. In fact it did not even fall to its first major support at $0.37185 in the recent carnage, which shows strength.
Currently, the XRP/USD pair is facing resistance at the moving averages. If this is crossed, the downtrend line is the next resistance. We believe there will be a strong defense of this zone from the bears.
After the downtrend line is crossed, the digital currency might move up to $0.565 and above that to $0.625. The flat moving averages and the RSI close to the midpoint suggests a range formation in the near-term.
On the downside, a break of the uptrend line and $0.37185 will invite selling that can result in a drop to $0.24508.
The bulls are trying to keep Ethereum above the year-to-date lows of $167.32 from Sept. 12. On Nov. 15, the price dipped to a low of $171.36, where buying emerged.
Any break of $167.32 will resume the downtrend, plunging the ETH/USD pair to the lower levels of $136 and $110. The 20-day EMA has started to turn down while the RSI is close to oversold levels, which shows that the bears have a firm grip in the near-term.
However, if the bulls rebound from the support and sustain above $188.35, it will increase the probability of a consolidation. First indication of a new uptrend will appear when the digital currency sustains above $249.93.
Stellar continues to trade inside the ascending channel. However, its intraday low of $0.21494424 on Nov.15 triggered our suggested stop loss of $0.22. For the past two days, the bulls have bought aggressively on sharp dips, which is a positive sign. This shows that the buyers are using lower prices to add to their position.
The moving averages are currently flat and the RSI is close to 50 levels, which points to a consolidation in the short-term. If this support line of the channel holds, the XLM/USD pair is likely to move up to the top of the channel. We shall wait for a new buy setup to form before proposing long positions.
EOS broke below the support of $4.493 on Nov. 15, but buying at lower levels pushed prices back above it. Currently, the bears are again attempting to break below the support and sink prices to the next support zone of $4.1778–$3.8723.
The down sloping 20-day EMA and the RSI in the negative zone show that the sellers have an upper hand. The downtrend will resume on a decline below $3.8723.
If the bulls succeed in defending the support zone between $4.1778–$3.8723, the EOS/USD pair will extend its stay inside the range. We shall wait for it to stabilize and show signs of a turnaround before turning positive on it.
Litecoin made successive new year-to-date lows on Nov. 14 and 15, which shows that it is one of the weaker cryptocurrencies.
After breaking below the support at $47.246 on Nov. 14, it followed up with a new low the next day, which was close to our first lower target of $40. Though prices have bounced from the lows, the pullback lacks strength. Even small intraday rallies are met with strong selling pressure.
If the LTC/USD pair breaks down of $40, it can slide to the next support at $32. The down trending moving averages and the RSI in the oversold zone show that the sellers are in command.
The first signs of recovery will be when the digital currency climbs back above $50 and sustains it. Until then, every pullback will be sold into.
Cardano broke below the critical support of $0.060105 on Nov.15 but the bears could not sustain below the lows.
The bulls are currently trying to keep prices above $0.060105, while the bears are attempting to break below it.
If the bears succeed, the ADA/USD pair can slide to $0.043722. However, if the bulls succeed, the digital currency will extend its consolidation in the $0.060105–$0.094256 range.
Monero bounced off the critical support at $81 on Nov. 15, but higher levels are attracting selling by the bears. A break of $81 will resume the downtrend and sink prices towards the lower support at $61.50.
If the bulls succeed in holding $81, a pullback to $100.453 is probable. If the price rises above $100.453, the XMR/USD pair might extend its stay in the range. We shall wait for a confirmation that the short-term bottom is in place before suggesting a trade.
The bulls have been attempting to keep TRON above the critical support at $0.0183. Any break of this level can result in a fall to $0.01587681, which is the intraday low of Aug. 14. If this level also breaks, the next support to watch on the downside is $0.01095383.
If the $0.0183 level holds, the TRX/USD pair can extend its stay inside the large range of $0.0183–$0.02815521. We shall wait for the rebound to show strength before forming a bullish opinion. A rally above $0.02815521 will indicate the start of a new uptrend. Until then, we recommend traders stay on the sidelines.
Dash is currently attempting to hold the support at $129.58. If the bears break below this level, the next stop is $113. If this level also gives way, the slide can extend to $87.
The down-sloping moving averages and the RSI close to the oversold level shows that the bears have an upper hand and the path of least resistance is to the downside.
However, if the bulls succeed in defending the $129.58 level, a rebound to the 20-day EMA, followed by a move to the downtrend line is possible. We shall wait for the DASH/USD pair to sustain above the downtrend line before turning positive.
Xunlei, a Chinese desktop software producer that has recently turned to blockchain, reports $45.3 million revenue in Q3 2018.
Chinese desktop software and blockchain-related company Xunlei has published its Q3 report Wednesday, Nov. 14. According to the report, the firm’s revenue increased in 2018 after the introduction of blockchain services.
The report notes that the company’s Q3 revenue reached $45.3 million, representing an increase of 1.1% year-over-year. The firm attributed $19.8 million of that revenue to its cloud and Internet value-added services sectors, which is an increase of 8.3 percent over the same period last year.
Lei Chen, CEO of Xunlei group, stated that blockchain remains one of the key investment areas for the company, noting:
“We believe that blockchain is a technology that can change our lives, and we will strive to make it available in different areas in a simpler and more cost-effective way.”
The company specifically mentioned its blockchain platform ThunderСhain, which has been launched this year, and lists recent blockchain-related partnerships, including a deal with the largest media group in China, People’s Daily, which is also the official newspaper of the Communist Party of China.
Back then, following a sustained downturn over two years, the company announced its first blockchain-driven initiative: the Link Token, which could be used to pay for some of Xunlei’s services. Shortly after, Xunlei became the best performing stock on Nasdaq, seeing up to 75 percent increase in shares, according to Bloomberg.
Later, in November, Xunlei came under scrutiny from China’s financial regulator following a state ban on Initial Coin Offerings (ICO). Consequently, its shares fell 40 percent. Despite the loss, Xunlei launched two new blockchain products in the spring, StellarCloud and ThunderChain Open Platform. Several months after the launch, the company’s CEO Lei Chen claimed that in Q2 Xunlei saw a $65.8 million in revenue, meaning a growth of over 70 percent on a year-over-year basis.
As Cointelegraph previously reported, in 2018 Xunlei also partnered with People’s Daily to construct a laboratory for “technology innovation” at the People Capital’s Blockchain Research Institute. Moreover, the two will develop a blockchain-driven platform to organize competitions, seminars, workshops, and promote and identify startups in the blockchain industry.
Several crypto-related companies have recently published their Q3 2018 reports: Japanese IT giant GMO Internet revealed a “historical performance” of its crypto-related sector, and Canadian Bitcoin (BTC) mining company Hut 8 declared a record revenue of $13.5 million, an increase by 126 percent compared to the previous quarter’s revenue of $5.9 million.
Both opposing camps in the so-called Bitcoin Cash "hash war" are mining at a hefty loss, according to estimates from BitMEX.
In the aftermath from yesterday's Bitcoin Cash (BCH) hard fork, both opposing camps in the so-called "hash war" are mining at a hefty loss, according to a tweet from the research arm of Hong Kong-based crypto derivatives platform BitMEX today, Nov. 16.
On Nov. 5, BitMEX Research announced it would be launching a network monitoring tool for both Bitcoin (BTC) and Bitcoin Cash (BCH), specifically in preparation for the widely-anticipated BCH hard fork Nov. 15.
As previously reported, disagreements over a proposed network upgrade have split the BTH community into opposing factions, resulting in an intense "hash war" between miners.
The two most vehemently opposed camps are Bitcoin ABC — favored by “Bitcoin Jesus” Roger Ver — and Bitcoin SV (“Satoshi’s Vision”), led by self-proclaimed Bitcoin (BTC) inventor Satoshi Nakamoto, Craig Wright. A third, more “neutral camp,” Bitcoin Unlimited, is being led by programmer Andrew Clifford and has been pitched as a “compromise solution” between ABC and SV.
Citing their fork monitoring tool, BitMEX researchers have tweeted that “although the ABC SV split is entertaining, we estimate that SV miners are burning $280,000 per day mining the SV chain.”
BitMEX Research says these assumptions are based on SV miners using Bitmain’s Antminer S9 machines, their ability to sell SV coins at the current spot market price ($100 at the time of the tweet), and energy consumption costs of 5 cents per/kWh.
Not only are the SV miners losing major capital to win the battle, but in fact, according to an earlier tweet today from BitMEX Research, BCH ABC miners are estimated to be making even larger losses than the SV camp.
BitMEX Research estimations of mining costs in the BCH "hash war", tweeted Nov. 16.
At press time, Bitcoin ABC is currently 28 blocks ahead, according to data from Coin.Dance.
Earlier this month, reports from China revealed that Bitmain was rushing to deploy around 90,000 of its Antminer S9 machines to the western Chinese region of Xinjiang ahead of the anticipated "hash war.”
The startup says there are no annual or monthly fees or any commission for ATM withdrawals, up to US $1,000.
On November 16, the Hong Kong-based blockchain startup Crypto.com announced that it is planning to issue its prepaid card, MCO Visa Card, in the United States. The company says the card has been approved for launch in partnership with its local bank partner Metropolitan Commercial Bank. Its metal cards promise up to two percent token rewards with its native MCO token, airport lounge access (select cards), tap-and-pay functionality, as well as competitive interbank rates.
Convert crypto to fiat with a few taps
According to Crypto.com, users of the MCO Visa Card can easily convert their crypto to fiat using the mobile wallet to be spent at over 40 million locations worldwide, online and offline. However, the company highlights that users need to exchange crypto to fiat currency first via Crypto.com’s Wallet before transacting.
The company began shipping cards to Singapore users in October, and says it currently has reservations for over 100,000 cards.
The blockchain startup says that the cards come with no annual or monthly fees, and no-fee ATM withdrawals.
The company’s official announcement quotes Mark DeFazio, President and CEO of Metropolitan Commercial Bank, who said that they are pleased to work closely with Crypto.com, as “the MCO Visa card is quite unique and provides a bridge between the traditional banking and cryptocurrencies in a safe and compliant way.”
Card reservations are made through a Crypto.com’s Card & Wallet App available for iOS and Android users.
More than a card
Crypto.com believes their product range will be useful for both crypto newcomers and experienced users. In addition to the MCO Visa Card, the company has created products that are geared towards making cryptocurrency more accessible to a broader group of customers.
Crypto.com’s Wallet is designed to securely buy, sell, send, store, and track a range of cryptocurrencies including Bitcoin, Ether, XRP, Litecoin, Binance Coin, and its own MCO Token. Crypto Invest is a tool to help democratize quant trading. Crypto Credit, which is not yet released, will allow customers to “spend crypto without selling.”
Crypto.com assures, that their App is easier to use than some other platforms. For example, buying cryptocurrency requires only a few taps compared to the complex process of other wallets, the company says. With Crypto.com’s Track Coin feature, users can track coins, compare exchange rates and prices, and sort coins by capitalization, performance, and volume.
Crypto.com Co-Founder and CEO Kris Marszalek said, “Our vision is to put cryptocurrency into every wallet, and the upcoming card roll out in the United States is a huge step in that direction. Our products are beautifully designed to connect the fiat and crypto worlds and drive mass market adoption.
About the project
The company was founded in July 2016. Crypto.com was formerly known as Monaco until its rebrand to Crypto.com in July 2018. The founders had raised $26.7 million during their token sale in June 2017. Crypto.com is headquartered in Hong Kong.
Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.
In a self-described “first,” the U.S. SEC has imposed civil penalties against two ICOs solely over their failure to register their token sales.
In a self-described “first,” the U.S. Securities and Exchange Commission (SEC) has imposed civil penalties against two Initial Coin Offerings (ICOs) solely over their failure to register their token sales, according to an official Nov. 16 press release.
The SEC states it has reached settlements with two ICO companies, CarrierEQ Inc. (Airfox) and Paragon Coin Inc., both of whom reportedly conducted their token sales last year after the SEC had already “warned” that ICOs could be deemed securities offerings in its July 2017 DAO Report of Investigation.
The nature of the settlements require both companies to “return funds to harmed investors, register the[ir] tokens as securities, file periodic reports with the Commission, and pay penalties” of $250,000 each.
The enforcement action implies that both Airfox and Paragon’s tokens were judged to have been securities, i.e. investments whose return was dependent on a third-party’s efforts or success. Both were thus required to have been registered with the SEC under U.S. federal law.
Airfox is a Boston-based startup that raised around $15 million worth of tokens to fund the development of its emerging markets-focused tokenized data system; ParagonCoin, for its part, raised around $12 million to develop blockchain-based solutions for the cannabis industry.
Stephanie Avakian, co-director of the SEC’s Enforcement Division is quoted as saying that “[t]hese cases tell those who are considering taking similar actions that we continue to be on the lookout for violations of the federal securities laws with respect to digital assets.”
The Wall Street Journal today reports that Paragon and Airfox have neither admitted nor denied the SEC claims. The orders in their settlements will require both companies to file third-party audited financial statements and other disclosures aimed at providing investor protection, similar to what is required of Initial Public Offerings (IPOs).
The SEC has further stated that the Airfox and Paragon cases follow upon the Commission’s “first non-fraud ICO registration case,” involving a company called “Munchee, Inc.” Munchee has reportedly returned all proceeds to investors and ceased its offering before any token issuance, thereby avoiding any penalties from the regulator.
The project claims to be able to process the entire daily volume of the U.S. equities market, however, critics remain doubtful.
On Nov. 6, the post-trade market infrastructure behemoth, the Depository Trust & Clearing Corporation (DTCC), announced that it is entering the test phase of its attempt to replatform its Trade Information Warehouse (TIW) via the use of distributed ledger technology (DLT).
DTCC enters active trial phase for TIW replatforming
The move to a blockchain platform comes at a time when many financial institutions are trialling the technology. In early November, Morgan Stanley released a report updating its clients about Bitcoin and blockchain, documenting several industry giants who have either already implemented blockchain or are in the process of trialling it. The report named ING Bank, Morgan Stanley, JPMorgan, and several other as being in the various stages of trials.
The DTCC’s attempt to shift its TIW to the blockchain is an ambitious project due to the fact that it accounts for 98 percent of derivatives transactions worldwide. In the statement, the DTCC sheds light on the scale of their current operations, stating that the DTCC’s subsidiaries “processed securities transactions valued at more than U.S. $1.61 quadrillion.” The DTCC valued its current current custodian and asset servicing solutions used in 131 countries and territories at U.S. for $57.4 trillion. Furthermore, the release stated that the DTCC’s Global Trade Repository service processes around 40 million open over-the-counter (OTC) positions weekly, along with 1 billion communications monthly, through its licensed trade repositories group.
According to the press release published on Nov. 6, the DTCC is working alongside 15 of the world’s leading banks to test the DLT based replatforming of the warehouse.The press release only names the U.K.-based Barclays bank as participating in the 2018 test, leaving the remaining 14 anonymous. JPMorgan, Credit Suisse, Citi, and Bank of America were participant banks in the DTCC’s 2016 proof-of-concept (PoC), however, it is not at this point known if any are still involved in the ongoing project.
Lee Braine, of the Chief Technology Office at Barclays, explained the aims of the project in the DTCC’s press release:
“We are pleased to be working with DTCC, our partners and colleagues on this exciting project to bring distributed ledger technology to life in a demonstrable way that will enhance efficiencies and lower costs and risks for the industry.”
The press release also reveals details about the nature of the trials underway. The replatforming will involve simulated cases of interactions between systems and platforms from other infrastructure providers. It also states that the platform will be tested against MarkitServ’s new credit platform “TradeServ.”
Who is involved?
The DTCC’s press release also sheds some light on the parties involved and indicates that the project is comprised of a consortium of IBM, Axoni, and R3. The consortium has reportedly “recorded the functionality” of the warehouse through DLT and cloud-based platforms over the last 18 months.
Having been involved in the implementation of the technology in food supply chains and agriculture, and working to unify several blockchains via the hyperledger, IBM is already an established blockchain player. The tech giant is reportedly playing an important role in the project, providing “program management, DLT expertise, and integration services.”
Axoni is also involved in a blockchain start-up. In August, it raised $32 million in a series B funding round led by Goldman Sachs and Nyca Partners, with high-profile investors such as Wells Fargo, JPMorgan, Citigroup, and Andreessen Horowitz. This latest round of investment brings Axoni’s total financing to $55 million at press time and is illustrative of the new institutional investment in both blockchain and the cryptocurrency sectors.
Greg Schvey, one of Axoni’s co-founders, elaborated on how the funding is more than just an important financial shot in the arm, but also indicative of a “deep strategic” alliance with many of the world’s major financial institutions who are actively implementing and innovating DLT themselves. As per the press release, Axoni is providing the digital ledger infrastructure and smart contract applications constructed on the Axway protocol.
R3 is an enterprise software firm comprising of over 200 members. The firm focuses on distributed database technology. The prime focus of the consortium is to develop Corda, an open-source platform designed to operate complex transactions and restrict access to transaction data in finance. The firm is acting as the solution advisor for the project.
The project began in 2016
The DTCC has been working on how to implement DLT for several years and, consequently, the origins of this particular DLT project are found in early 2016. As previously reported by Cointelegraph, the DTCC launched a proof-of-concept along with several high-profile financial institutions such as JPMorgan and Bank of America to demonstrate that complex post-trade events could effectively be managed via DLT in a peer-to-peer network.
The DTCC published a press release documenting the timeline of the project in 2018.
Most recently, a 19-week study led by the DTCC in collaboration with both Accenture and R3, reportedly found that DLT is scalable enough to support the high daily trade volumes of the U.S. equity market. The report claims that DLT is able to process an entire trading day’s volume at peak rates which can amount to 115,000,000 daily trades, equating to roughly 6,300 trades per second for five hours on end.
During the study, Accenture worked on the construction of a network of more than 170 nodes in order to create a realistic model of the chaotic environment of exchanges, broker-dealers, and market participants. The model then captured matched equities trades from exchange DLT nodes. Throughout the project, the DTCC acted as the central counterparty (CCP) to ensure that anonymity was upheld on the ledger.
Managing director and chief technology architect at the DTCC, Rob Palatnick, provided an update regarding the progression of the DLT replatforming:
“We finished coding the TIW. We’re just working through the typical defect list and trying to start user acceptance testing this fall.”
Palatnick also commented on other aspects of the trial that the DTCC is tackling, such as the transferral of completed contracts:
“I think there is roughly 15 to 20 million of them. A lot of them are old contracts, so they do not necessarily abide by smart contract validation rules. Figuring out the right way to get them into the ledger and have them there on day one has been one of our more interesting works in progress.”
Palatnick also noted how the TIW required more than populating distributed ledgers:
“Generally, distributed ledger technology is not a reporting technology. Reporting and analytics are not easy on most DLT core platforms, so you need some kind of accommodation to support that.”
The DTCC also published information about the ongoing work to transform its TIW via DLT technology, such as blockchain:
“Currently, public blockchains supporting crypto-currencies operate at single or double digit per second performance, which until now was the only indication of the potential volume that a private DLT might be able to support.
“To make sure that we really demonstrated robustness and completeness, we wanted a target high enough to measure the performance and allow it to maintain that for a continuous period of time.”
With regard to the issue of scalability, Jennifer Peve, managing director of business development and fintech strategy at the DTCC outlined to Forbes that the project required venturing into uncharted territory:
“The reality is that for the private distributed ledger, there wasn’t a known performance or scalability figure, all we had to go on was public blockchains for Bitcoin performance, and that is not an apple to apple comparison. Private blockchains are fit for purpose for our industry. They have very different architecture, different privacy and sharing models, data storage, smart contract functionality, and governance model. There are a number of factors that go into performance and scalability of a distributed ledger."
Peve went on to state that the increased scalability rate was beyond initial expectations and helped build confidence in DLT.
Murray Pozmanter, head of clearing agency services at the DTCC was also bullish on DLT and the potential benefits for the infrastructure that it could bring:
“We are excited to lead this important work to advance the performance capabilities of DLT and help create new possibilities for leveraging the technology more broadly across financial markets. As an early adopter of DLT, we are encouraged by the results of the study because they prove that the technology’s performance can scale to meet the needs of markets of different sizes and maturity.”
In spite of an outpouring of positivity from all parties involved in the platform upgrade and the DLT tests, it’s important to note that the DTCC said the study only tested basic functionality. The infrastructure giant also added that future testing must be carried out in order to establish whether DLT is able to meet all security and operational requirements as well as comply with necessary regulatory requirements.
DLT technology faces stumbling blocks and industry hesitancy
On Oct. 16, a report compiled by consulting and technology services provider Capgemini, along with the French bank BNP Paribas, purportedly revealed findings showing that DLT is not yet able to meet financial market demands. The report was compiled using multiple criteria such as industry governance, infrastructure and demographics and made use of interview material with company executives.
The report shows that 85.9 percent of participants felt that a lack of interoperability was a significant barrier to progress, whereas 83.1 percent voiced concern over the muddled regulatory environment, one of the most consistent stumbling blocks for both blockchain and crypto projects irrespective of size or financial backing. A further 77.8 percent cited scalability as an issue. More than 60 percent of participants said that security, cost, and time-efficiency constituted problems.
A problem highlighted in the report is the uncertain and inconsistent state of regulation in most countries. There is no existing uniform legal framework for regulating DLT and, consequently, the report highlights this as a major impediment to any future development.
Is there enough blockchain?
The October report is not the first time that DLT projects have faced opposition. In March, Reuters reported on how, in spite of bullish advocacy, the DTCC had not done much with blockchain technology.
The article reveals that a previous DLT-based project initiated by the DTCC was not carried out in its entirety. An attempt to transfer a system for clearing and settlement of repurchase agreement transactions was shelved after its initially successful testing due to the fact that the trial showed current technology could achieve the same results more affordably. The trial was subsequently described as “a solution in search of a problem” by the DTCC’s head of clearing agency service, Murray Pozmanter.
Tim Swanson, founder of technology advisory Post Oak Labs, commented on how the DTCC’s ill-fated project was part of a series of hotly-touted proofs-of-concepts that failed to deliver the goods:
“A large part of the problem has been expectation management, or rather lack thereof by many vendors and large consultancies that made claims that could not be fulfilled in the time spans they had said on stage at fintech events.”
In spite of this setback, the next phase of DTCC’s TIW replatforming is expected to be rolled out in Q1 2019. Currently, the Australia Securities Exchange is the sole stock exchange to have shifted its market infrastructure to blockchain. Alongside the recent institutional investment trend for Bitcoin and trials being carried out by major financial financial institutions to implement blockchain, the results of the transformation of “Wall Street’s bookkeeper” will be closely watched. If all obstacles are overcome and the project is indeed capable of processing the enormous daily volume of the U.S. equities market, then it could well become the litmus test for other ambitious projects seeking to push for further adoption by the financial mainstream.
Bilbao, the largest city in northern Spain, launches a $171,000 tender to create an inter-institutional public blockchain based on Ethereum.
Officials of the largest city in Basque country want to create a decentralized platform, designed to allow one to act with “power of attorney” online. The deadline to apply for the tender is set on Nov. 23.
A company that will be awarded the contract has to develop the blockchain network within six months. According to the technical description of the tender, the winning company should build a network similar to EJIE — a digital platform owned by the Basque country’s government. EJIE, in its turn, operates on JPMorgan’s Quorum, a distributed ledger and smart contract platform designed for financial needs and based on the Ethereum (ETH) blockchain.
By using blockchain and smart contracts, Bilbao’s authorities want to facilitate the data exchange between different public institutions, implying interoperability with EJIE. The officials believe that blockchain technology will help store citizens’ data safely and prevent hacks and alterations.
As Cointelegraph previously reported, Spain remains one of the “primary examples of blockchain optimism” on many levels. Recently, the Spanish autonomous community of Aragon announced it would provide blockchain services to citizens on a state level. Later in October, one of Spain's busiest ports based in Valencia stated it was creating a “smart port” to improve logistics and cut costs.
In April, the U.S’s JPMorgan Chase started testing its blockchain platform Quorum with partners including Goldman Sachs, Pfizer Inc., and the National Bank of Canada. In September, the platform was joined by over 75 multinational banks, including Societe Generale and Santander.
Crimea could possibly create blockchain-based investment platforms for foreign investors under sanctions.
Crimean authorities are considering creating a blockchain-cluster that would support investment platforms allowing foreign investors to work in sanctioned countries anonymously, major state-operated Russian news agency TASS reported Nov. 16.
Previously this week, the Permanent Representative of the Republic of Crimea under the President of the Russian Federation, Georgy Muradov, had already revealed the Crimean government’s potential plans to create a separate blockchain-cluster in the region for venture capitalists funds.
Today, Roman Kulachenko, the President of the Crimean Republican Association of Blockchain Technologies Investment, said that a new international education center for working with blockchain technologies as a way of avoiding sanctions might be opened on the Crimean peninsula.
According to Kulachenko, this educational center would allow for the training of specialists from different countries under sanctions in blockchain technology. He added:
"There are a number of states that, like the Crimea, that are under sanctions — for example, South Ossetia and Abkhazia. We have the same problems. And the center will allow us to combine efforts and solve the problem."
The loss of private keys has seen crypto worth millions vanish – but new technology is helping enthusiasts recover wallets without compromising security.
Before the internet brought us dog videos and your grandmother’s Facebook updates, losing money was a traumatic experience. Dropping $20 meant you’d probably never see it again – all you’d have left is that unmistakable sensation of feeling stupid.
At least in the fiat world, it’s become a little bit harder to lose money. Centralized institutions mean you can recover usernames and passwords in a jiffy – answering a few security questions or showing your ID to regain access. Help is even available if you burn thousands of dollars in a fire, thanks to a specialist department that pieces them back together and exchanges them for shiny new notes.
Unfortunately, this is one hurdle that the crypto industry has been struggling to overcome – and in some cases, the consequences have been eye-wateringly costly.
Ownership of cryptocurrency is determined by who holds the private keys to these assets. Because of this, they are far more important than a password could ever be. Storing these codes on the cloud can be calamitous in case you get hacked, while holding them on your phone can be devastating if the device is lost, stolen or damaged. Crypto enthusiasts have heeded advice from experts by getting clever and recording them offline – using a USB stick or even an old-fashioned piece of paper – only to forget where they put it or throw it away without realizing its significance.
Horror stories like this are well documented – including on Cointelegraph. Here’s looking at you, Welshman who threw away a hard drive which held 7,500 Bitcoin (worth about $47 million at today’s rates.) And let’s not forget you, anonymous Australian who fears his wife will go ballistic after a cheaply made USB stick storing thousands of Bitcoins corrupted, along with his dreams of infinite riches.
Most of the time, nothing can be done when private keys are lost. It’s perhaps no surprise then that, last year, a digital forensics firm estimated that four million Bitcoins are gone forever. But although it might be a little bit too late for those who have already lost a fortune, new technology designed to help people recover their private keys is starting to emerge (and hopefully it’ll be a little bit more effective than relying on hypnosis).
Saving private keys
Some blockchain platforms believe “zero-knowledge proofs” – a relatively new concept in the cryptographic world which emerged in the 1980s – could transform attitudes to private keys, enabling them to be recovered without compromising security.
The concept can be explained like this: being able to prove to somebody that you know something without actually revealing what you know.
One well-known example is known as “Two Balls And The Colorblind Friend.” Let’s imagine you have a green and a red ball – identical in every way apart from color – and a friend who can’t tell the difference between them. Nonetheless, you want to prove they are different colors.
Your colorblind companion would put the balls behind their back – and would reveal one of them. He would then put the balls behind his back again, bring one out and ask: “Did I switch the ball?”
Given the difference in colors, it would be easy for you to say whether or not a switch has happened, but impossible for him to tell. Repeating this process over and over would help your friend realize they are different colors, because you’d always get the answer right. Crucially, you’ll never have revealed which ball is green and which is red.
SovereignWallet uses zero-knowledge encryption to enable its users to recover their private keys by downloading the app on another smartphone should the device they normally use end up lost or broken. This is achievable because the key is encrypted with their password and PIN – and stored securely on the network’s server. As an alternative, they also have the option to retrieve private keys by relaying the mnemonic words which are generated at the time these codes are created.
The platform, which enables crypto to be transferred in a messenger-style format and aims to create a happy medium between banking-grade security and usability, believes blockchain technology could help drive down the cost of remittances, where foreign workers send money across borders back home to their loved ones.
Of course, the concern for cryptocurrency holders is that any mechanism which enables them to recover their private keys – however desirable – could put their funds at risk of being stolen by bad actors. This is why the zero-knowledge element of such measures is crucial.
Returning to the example of the colorblind friend, imagine the red and the green ball represent passwords, and you’re the only person in the world who can see their color. This would mean a fraudster who tried to conduct the same experiment to convince your colorblind friend would end up making too many mistakes during the switching experiment – and fail to convince them – because they don’t know either.
SovereignWallet also uses machine learning security in its infrastructure, technology that’s also relied upon by the likes of Palantir, the Silicon Valley tech giant founded by Peter Thiel.
Instead of solely relying on a usernames and password, the crypto wallet monitors a user’s usage patterns and kicks into action whenever there is an anomaly. Additional authentication is needed whenever a user logs in on a new device, and successfully passing these extra measures result in them being automatically logged out of the smartphones they have used in the past. SovereignWallet says it strives to be a “smart application that can think and not be deceived easily” through a range of other features, too, such as technology which stops the app being used on PC-based emulator programs instead of a real smartphone.
Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.
The impact of this week’s market volatility is beginning to fade for major cryptocurrency assets, markets confirm.
Market visualization. Source: Coin360
The fallout from turbulence over BCH’s controversial hard fork, which occurred Thursday, Nov. 15, appeared not to last, with Bitcoin (BTC) recovering a modest 1.35 percent Friday to trade around $5,590 by press time.
The largest cryptocurrency had fallen hard in the hours leading up to the hard fork, at one point trading as low as $5,146 according to data from Cointelegraph’s price tracker, Coin360, CoinMarketCap, and Bitcointicker.
A full correction, one analyst has warned, could nonetheless take “weeks or months” to solidify.
Bitcoin 7-day price chart. Source: Cointelegraph Bitcoin Price Index
By contrast, BCH itself has failed to capitalize on the market frenzy, falling almost 8 percent on the day Friday.
The altcoin is the only one out of the top twenty cryptocurrencies by market cap not to make gains in the past 24 hours. Binance Coin (BNB) and Neo (NEO) also saw relatively flat growth over the same period.
For previous altcoin market leader Ethereum (ETH), the outlook still appeared tenuous at press time, a last-minute price surge by Ripple (XRP) causing it to lose its status as the largest altcoin by market cap this week.
Despite a 1.5 percent price improvement to $178 Friday, XRP still gained more, increasing the gap between the market cap of the two assets from $100,000 Thursday to $550,000.
Ethereum 7-day price chart. Source: Cointelegraph Ethereum Price Index
The best performer of the top 20 coins was Stellar (XMR), which gained around 7.2 percent — as much as BCH lost.
As of press time, total market cap is around $184 billion, up from its intraweekly low of around $176 billion.
Total market cap 7-day chart. Source: CoinMarketCap
South Korea’s Jeju Province is set to create a new blockchain ecosystem in the region to interlink industry-academia specialists.
The Korea Radio Promotion Association (RAPA) and Jeju University have signed a Memorandum of Understanding (MoU) for blockchain-related industry and education in the Jeju area, Korean economic media outlet Seoul Economic Daily reports today, Nov. 16.
RAPA, the company in charge of the communication between government and radio broadcasting businesses, and Jeju University, located in one of the major research center in South Korea, the Jeju Science Park, agreed to cooperate for developing blockchain technology within industry-academia relationships.
The agreement aims to establish a blockchain ecosystem in the Jeju Special Self-governing Province to exchange ideas among academia and industry specialists, as well as to increase the competitiveness of domestic blockchain-based companies.
Previously this week, the government of South Korea’s Gyeongbuk province had launched a “Blockchain Special Committee,” with the goal of creating a blockchain hub and attracting investment for blockchain-related businesses, Cointelegraph reported Nov. 15.
One of South Korea’s largest hospitals also partnered with a local tech company in November in order to develop a medical services platform based on blockchain tech.
Also this month, the South Korean government agreed to triple the budget for blockchain projects in 2019, and to invest $35 million in the industry related to distributed ledger technology (DLT), Cointelegraph wrote Nov. 8.
Japan’s financial watchdog reports a lower number of crypto enquiries in comparison to quarter two.
The number of enquiries about cryptocurrencies from Japanese investors has declined in the third quarter of 2018, according to a report published by Japan’s Financial Services Agency (FSA) Friday, Nov. 16.
The FSA, which oversees the country’s crypto market, published data on quarter enquiries to late September 2018. The watchdog received 1,231 requests, which is a slight decrease in comparison to 1,602 in Q2.
As per the regulator, 34 percent of those enquiries (418 cases) were related to general questions, and 32 percent (398 cases) were about the results of individual transactions and contracts. The other 34 percent of cases were not mentioned specifically in the published data.
According to the recent data from FSA, the interest in cryptocurrencies has been slowly declining throughout the year. Fintech news outlet Finance Feeds noted that in early 2018, Japan saw a boost in crypto enquiries, with FSA registering about 3,559 requests.
Japan faced two major crypto hacks in 2018. In January, local cryptocurrency exchange Coincheck had a loss of 523 million in NEM, worth approximately $534 million at the time. And in September, hackers stole $59 million worth of cryptocurrencies from Japanese crypto exchange Zaif.
Following the latest hack, the Japanese Virtual Currency Exchange Association (JVCEA), which is a self-regulatory body comprised of Japan’s 16 licensed crypto exchanges, announced it was going to tighten its rules by establishing a limit on the amount of digital currencies that can be managed online by any exchange.
Later in October, the FSA gave self-regulatory status to the JVCEA, allowing it to set rules to protect customers' assets, elaborate on anti-money-laundering (AML) policy, and give working guidelines to crypto exchanges.
CBDCs can improve counterparty credit risk for cross-border interbank payments and settlements, according to the central banks of Canada, U.K. and Singapore.
Central bank digital currencies (CDBCs) can help improve counterparty credit risk for cross-border interbank payments and settlements, according to a new in-depth report jointly published by the central banks of Canada, the U.K. and Singapore, Nov. 15.
A CBDC is a digital currency issued by a central bank whose legal tender status depends on government regulation or law. The “wholesale” variant of CBDC (W-CBDC) limits its use to financial institutions and markets, as opposed to a “retail CBDC” for the general public.
The jointly compiled report looks into how to tackle the challenges and frictions in existing cross-border payment and interbank settlement systems, which currently rely on central banks operating the real-time gross settlement (RTGS) infrastructure within which commercial interbank obligations must settle.
According to the report, there are five main drawbacks to the incumbent, cross-border payments “correspondent banking” model. First, there are time lags for cross-jurisdictional payments, during which counterparties are exposed to credit and settlement risk from their correspondents.
Lags also limit the effective deployment of commercial banks’ liquidity, as funds are tied up longer; other major challenges include a lack of transparency regarding payment status for end-users and banks, high operational costs, and the increasing vulnerability of RTGS systems to cyber-attacks and other threat factors.
The report thus proposes and analyzes two remediary “legacy” approaches, and one approach that would involve the issuance of wholesale CBDCs, in three configurations.
The first would be the issuance of jurisdiction specific W-CBDCs, which cannot be exchanged across borders; second, jurisdiction-specific W-CBDCs that can be exchanged across borders; and third, the issuance of a single, universally accepted W-CBDC.
Of all the variants, jurisdiction-specific W-CBDCs were found to provide the fewest benefits, essentially representing a tokenized version of the existing, correspondent banking model.
However, the other two W-CBDC versions would, according to the report, be poised to significantly improve counterparty credit and payment and settlement risks, as well as to widen access to RTGS infrastructure (i.e. to non-bank payment service providers).
On the other hand, all forms of W-CDBCs were judged to “degrade” (i.e. perform worse than currently) existing governance frameworks, and to provide a mix of benefits and drawbacks for central banks’ future role and oversight.
Earlier this week, head of the International Monetary Fund (IMF) Christine Lagarde urged the international community to “consider” endorsing CBDCs, arguing they “could satisfy public policy goals,” specifically “financial inclusion.”
Crypto market experienced a $27 billion drop in valuation overnight, experts explain factors and trends.
On November 15, within a 24-hour span, the valuation of the crypto market fell from $210 billion to $183 billion, by more than $27 billion on a single day.
Fueled by the 18 percent drop in the price of Bitcoin Cash (BCH), every major cryptocurrency in the global market started to record intense sell-offs.
Bitcoin, which maintained a record low level of volatility from August to November, fell by more than 11 percent on the day, accelerating the downtrend of other leading digital assets and small market cap cryptocurrencies.
Prominent investors including BKCM CEO Brian Kelly and Coinshares executive Meltem Demirors stated that the hash power war between Bitcoin Cash and Bitcoin SV acted as a major catalyst of the steep sell-off of the cryptocurrency market.
Bitcoin Cash triggered the drop
On CNBC’s Fast Money, Brian Kelly stated the confidence of investors in the cryptocurrency market declined ahead of the Bitcoin Cash hard fork and its civil war with Bitcoin SV:
“After some real quiet period, lowest volatility, almost in Bitcoin history, all of the sudden today things exploded, so what happened? Bitcoin Cash, which forked off of Bitcoin last year, is doing a hard fork. Now, when you do a hard fork, everybody usually agrees. But in this particular case, everybody is not agreeing. So we’ve got ourselves a crypto civil war, and that has people in the market concerned.”
On November 15, Bitcoin Cash successfully updated its protocol in a hard fork with support from the community. At the same time, a contentious hard fork proposal called Bitcoin SV was set forth by a camp led by billionaire Calvin Ayre, Craig Steven Wright, and Coingeek.
SVPool, a mining pool operated by the SV camp, mined its first invalid block on November 16, officially creating a new chain called Bitcoin SV.
Prior to the conflict between Bitcoin Cash and Bitcoin SV, Craig Wright threatened to conduct a 51 percent attack against Bitcoin Cash and gain enough power to mine invalid blocks on the Bitcoin Cash network to sabotage the protocol.
As of November 16, Bitcoin ABC, the original Bitcoin Cash chain, remain ahead of Bitcoin SV in terms of hash rate and number of blocks mined. If the next several days show ABC ahead of SV, then SV is not able to conduct a 51 percent attack on BCH.
As such, Kelly explained that the downtrend of Bitcoin and the cryptocurrency market is likely to be short-lived.
“People are concerned that both Bitcoin and Bitcoin Cash markets, their networks might slow down, they might not work as well, the software upgrade may not go through or if it does go through, we will end up with some chaos. People started selling, that triggered stops, everybody got concerned. The entire market settled down. In my view, a very short-term event.”
Possible Bitcoin Cash didn’t cause the drop, market was already weak
Crypto Rand, cryptocurrency trader and technical analyst, told Cointelegraph that even before the Bitcoin Cash hard fork, Bitcoin hovered above an uptrend support. Its continuous retest of the level led its momentum and strength in the low $6,000 region to decline significantly.
“I don't think there is a huge conspiracy against Bitcoin behind the drop. BTC has been hovering over a slight uptrend support. But we can see how every time that BTC touched that support it bounced with less and less strength while continuing a downtrend on volume. That points out a weak setup, what was seeing as stability can be considered also as lack of strength to push new higher lows and define a stronger uptrend.”
Currently, the majority of investors and traders in the market remain hesitant towards engaging in large positions or taking high-risk, high-return trades, mostly due to poor market conditions. Volumes are weak, trading activity is low, and the sheer intensity of the recent drop of the crypto market has reduced the probability of a corrective rally.
Following a $27 billion drop in valuation in a 24-hour period, the crypto market could require weeks to months of consolidation period before initiating a proper short-term rally. The uncertainty in the market has allowed the crypto market to weaken, Crypto Rand explained, adding that many alternative cryptocurrencies performed relatively well against Bitcoin.
“The crypto market still looking weak at this point. Uncertainty I would say is the main feeling right now. As seen by the low volumes everywhere, big traders and investors are still hesitant towards taking big positions given this scenario. One thing I would like to highlight is the response of large market cap cryptocurrencies against this BTC drop. In previous scenarios, all major digital assets were dragged down with BTC or dropping even further. But this time most of them are holding their levels nicely. This is a great precedent for the whole crypto sphere, alternative cryptocurrencies need to set their own path and cycles besides BTC moves.”
Throughout the past several months, both large market cap cryptocurrencies and tokens have followed the price trend of BTC. Consequently, tokens have recorded 30 to 60 percent losses against BTC, which recorded a 70 percent drop of its own since January.
Further drop is inevitable
Given the weakness in the market and the intensity of the daily drops in the price of major cryptocurrencies, Crypto Rand stated that a further drop to the low $5,000 region is inevitable, speaking to Cointelegraph.
He added that while the volume of BTC has increased in the past 12 to 24 hours, it is not sufficient to demonstrate a bottomed setup or trigger a corrective rally for a short-term recovery.
“In my opinion a further drop is inevitable, with the next strong support and potential bottom in the $4,800 - $5,000 range. Yesterday's volume spike was acceptable but not the characteristic of a bottomed setup (it should be bigger and print a hammer/dragonfly/hanging man doji candle).”
DonAlt, a cryptocurrency trader and technical analyst, also stated that if BTC fails to recover swiftly to the $6,000 region, a further drop is likely.
“The drop happened, what now? We're pretty much in no man's land, with a lot of open space below us. If we don't manage to rally up to the green line this week I'd expect to go lower.”
However, according to Crypto Rand, one positive takeaway from the correction is that cryptocurrencies have started to show independent price movements with less dependence on BTC. In the weeks to come, it is possible that the market sees a decline in the dominance index of BTC, especially if large market cap digital assets begin to perform better.
“We will have to wait some more months until BTC settle down its path through a potential reversal, but the alternative cryptocurrency market could take its own direction getting rid of the BTC influence. The big caps altcoin response has been amazing so far. Printing the mentioned dragonfly doji and a notorious spike on volume.”
Image Source: CoinMarketCap.com
In the past several hours, Ripple (XRP), Ethereum (ETH), EOS, and Litecoin (LTC) have recorded a 2 to 4 percent increase in price against the US dollar, while BTC remained at around $5,600.
Weeks to months of stability expected
In the months to come, possibly throughout the first two quarters of 2019, Bitcoin and the rest of the crypto market could remain in their low price range.
Rob Sluymer, a Fundstrat Global Advisors partner, said that the consolidation period of BTC following its 11 percent drop from $6,300 to $5,500 could take weeks to months. Prior to building a platform to initiate a strong mid-term rally, BTC will have to demonstrate stability in the short-term.
“This week’s breakdown produced significant technical damage. That will likely take weeks, if not months, to repair to create a durable enough price ‘structure’ to support a multi-month rally.”
The analysis of Sluymer echoed that of Willy Woo, the creator of cryptocurrency market data provider Woobull.com, who previously stated that BTC will likely remain in a low price range until the second quarter of 2019.
On November 13, before the market demonstrated signs of a major sell-off, Woo stated that technical indicators show a weak short-term trend for BTC.
“This last reading of our blockchain and macro market indicators is still in play. What has changed is that NVTS has now broken its support, typically a sell signal.”
Based on fundamental indicators like NVT Ratio, an indicator that uses the network activity of the Bitcoin network to obtain an accurate assessment of BTC’s short-term trend, Woo stated that the second quarter of 2019 will likely see BTC bottoming out.
“Putting together the blockchain view, I suspect the timing for a bottom may be around Q2 2019. After that we start the true accumulation band, only after that, do we start a long grind upwards.”
Currently, many prominent cryptocurrency investors and analysts state that market conditions are poor and the sell pressure on major digital assets remains high. A speedy recovery by BTC and other major cryptocurrencies could be challenging in the short-term, mostly due to the sheer sell-off of the market over the past two days.
Institutional investors don’t care if Bitcoin ends 2018 at $3,000 or $10,000
In an interview with Cointelegraph, Gabor Gurbacs, a digital asset strategist and director at VanEck, said that institutional investors are not concerned whether Bitcoin ends 2018 at $3,000 or $10,000.
While the recent market crash has led retail investors and individual traders in the public cryptocurrency exchange market to panic sell and drive the market down further, Gurbacs said that institutional investors are focusing on products that provide investor protection and strengthen the infrastructure of the crypto market.
“Large financial institutions are more focused on proper market structure than short term price fluctuations. How do we properly value digital assets? How do we custody digital assets? Are their ETFs available with proper market and investor protections? Most large institutions do not really care if Bitcoin ends 2019 at 3,000 or 10,000. I think market structure is getting better every day and crypto start to look more and more like the commodities and equities markets.”
Gurbacs shared the sentiment of BKCM CEO Brian Kelly and Coinshares executive Meltem Dem, stating that the Bitcoin Cash hard fork on November 15 and the hash power war between Bitcoin Cash and Bitcoin Cash SV contributed to the $27 billion drop of the crypto market.
End of the year selling by businesses finalizing their books also played as a catalyst in the market crash Gurbacs added, stating that traditional finance markets like equity and bonds also went through a large correction over the past several months.
“Recent market conditions: In the past 3 months (as of 11/15/2018) Bitcoin is down 17.1%, blue chips (MVDA10) – down 17.3% and small caps (MVDASC) – down 25.0%. XRP for the same period is up +47.0%. During the past month, however, Bitcoin and digital assets were fairly stable while the equity and bond markets have gone through a significant correction. The recent turbulence is due to the combination of some systematic end of the year selling (that is businesses are closing their books) and some mess around the Bitcoin Cash fork.”
As the Bitcoin Cash hard fork and the hash power conflict amongst Bitcoin, Bitcoin Cash, and Bitcoin Cash SV stabilizes, the market is expected to calm down and find its stability and momentum.
Central bank issued digital currencies are too “risky and dangerous,” according to the first Chairman of the Central Bank of Azerbaijan.
Alim Guliyev, the first Chairman at CBA, underlined that since digital currencies “come with great risks,” the CBA is not intending to launch a central bank issued digital currency (CBDC) any time soon. Guliyev, who sees such financial instruments as “risky and dangerous,” added that he believes money laundering is the prime goal of cryptocurrencies.
An Israeli independent study group set up by the governor of the Bank of Israel came to a similar conclusion while exploring possibilities of issuing CBDCs, overall not recommending that the country’s central bank to issue its own token, Cointelegraph reported Nov. 7.
Back this summer, the Bank of Finland released a study, entitled “The Great Illusion of Cryptocurrencies,” calling cryptocurrencies not real currencies but instead “accounting systems for non-existent assets,” Cointelegraph wrote Jul. 2.
Earlier this fall in Azerbaijan, the chairman of the Azerbaijani Internet Forum revealed the government’s plans to implement blockchain technology and smart contracts in the country’s legal system and “in the field of public utilities (water, gas and electricity supply),” Cointelegraph wrote Nov. 2.
Crypto loans company Salt, once associated with Erik Voorhees, is facing an SEC probe over its 2017 $50 million token sale and whether Voorhees’ involvement broke the law.
Crypto loans company Salt Lending Holdings Inc., once associated with high-profile crypto industry stalwart Erik Voorhees, is facing a U.S. Securities and Exchange Commission (SEC) probe over its 2017 $50 million token sale, the Wall Street Journal (WSJ) reported Nov. 15.
Founded in 2016, Salt — which uses clients’ crypto holdings as collateral against fiat currency loans — is reported to have received a subpoena from the securities regulator this February, according to “sources familiar with the matter.”
Among other issues, the SEC is said to be investigating whether Salt’s 2017 token sale was a noncompliant securities offering (i.e. whether it should have been registered with the SEC), how token proceeds were used, and the manner in which Salt employees received tokens.
Voorhees, who is well known as CEO of crypto exchange ShapeShift, is reported to have played a “leadership” role at Salt, and was notably listed as a “director” in an SEC filing five days ahead of the first SALT token sale in August 2017.
This latter point is now of particular contention, as Voorhees has previously been investigated by the SEC and has effectively been prohibited from raising money in private markets. In 2014, he reached a settlement of $50,000 in fines and disgorgement with the SEC over allegedly unregistered public offerings of securities in connection with two of his early Bitcoin (BTC)-related ventures.
Keith Higgins, chairman of the securities and governance practice at Ropes & Gray LLP and a former SEC division director, told the WSJ that:
“A provision in the  settlement makes him a so-called ‘bad actor’ unable to rely on an SEC safe harbor for private, unregulated stock sales.”
Aside from being listed on Salt’s summer 2017 SEC filing, Voorhees was also named as a Salt director on the company’s site and promotional materials, according to the WSJ’s review. In November 2017, Salt reportedly amended its SEC disclosure, declaring the $1.5 million it had raised, and refraining from any mention of Voorhees.
Jennifer Nealson, a Salt executive, has confirmed to the WSJ that the firm received a February subpoena, and clarified that Voorhees was an “early contributor” to Salt, but stated he “no longer serves in any formal capacity.”
Securities lawyers have said the SEC could seek civil penalties against the company if it deems that Voorhees’ involvement broke the law.
Aside from the probe, Salt is facing a private lawsuit in the U.S. state of Colorado from a former Salt financial officer, who has accused the firm of giving loans on advantageous terms to insiders, and of having lost $4 million worth of crypto in a February 2018 hack. Voorhees has reportedly not been named as a defendant in the case.
“I am proud to represent @ErikVoorhees, a real visionary, who has abided by his SEC settlement terms. This @WSJ story is an unfair attack on him relying on unsubstantiated allegations, anonymous sources, and he is not even a party to the lawsuit discussed.”
Earlier this fall, Voorhees refuted a WSJ report that alleged that $9 million in ill-gotten funds were laundered through ShapeShift, claiming that the WSJ had misrepresented or omitted the information provided by the exchange.
Oxfam wants to use smart contracts and blockchain to ensure better conditions for Cambodian rice producers.
BlocRice, which aims to use smart contracts to provide transparency and security between rice growers and purchasers in the Netherlands, has been under development and should expand to 5,000 farms by 2022, the outlet notes.
“The project aims to test blockchain technology and its smart contracts, a digital 3-way contract farming arrangement between primary producer, Cambodian rice exporter and retailer in Europe, to improve farmers’ livelihood and their supply conditions,” an information brochure from Oxfam explains.
The increased automation and visibility of individual farmers should in turn allow them to set higher prices and avoid economic disadvantages.
“BlocRice promotes the use of such digital contracts as tools for social and economic empowerment,” the Khmer Times quotes Solinn Lim, country director of Oxfam in Cambodia as saying. Lim added:
“The application of blockchain technology is expected to enhance the negotiation power of small-scale farmers in their rice value chains, who are usually poor primary producers.”
It is not the first time blockchain has been applied to rice supply chains as a means of making their processes more robust.
Maksim Zaslavskiy’s guilty plea could net him up to 37 months in prison for ICO token fraud.
The suspect at the center of the U.S.’ first Initial Coin Offering (ICO) fraud case has pleaded guilty in court, in part settling a case seen as a bellwether for the country’s securities laws, Bloomberg reported Nov. 15.
Maksim Zaslavskiy, who faces a sentence of up to 37 months after lying to investors who put funds into two ICOs last year, confirmed he had lied about aspects of his operations.
The court case involves REcoin and Diamond Reserve Coin, which had claimed to be backed by real estate and diamonds respectively. Investors lost money when both coins imploded, Zaslavskiy and his accomplices having never in fact secured any of the alleged backing.
“I, along with others, made these false statements to obtain money from investors,” Bloomberg quotes him as telling the court in New York:
“We had not yet purchased any real estate [...] we had not purchased any diamonds.”
The U.S. Securities and Exchange Commission (SEC) originally filed charges against Zaslavskiy in September 2017, the case since then becoming a topic of interest among commentators eager to see if the regulator would — or could — class the ICO offerings at hand has securities under its jurisdiction.
As Cointelegraph reported, a U.S. district judge ruled securities laws could apply to cryptocurrencies in September. It would be up to a jury to determine whether those in this case should receive the same treatment.
Zaslavskiy will return to court for sentencing in April 2019.
Nvidia released its Q3 2018 results today, revealing a “crypto hangover” as GPU prices failed to adjust quickly enough to disappearing demand from crypto miners.
In the financial results report, founder and CEO of Nvidia Jensen Huang said that the company’s “near-term results reflect excess channel inventory post the cryptocurrency boom, which will be corrected.”
Put differently, the cryptocurrency frenzy drove up prices for Nvidia’s gaming cards, but once that demand disappeared, prices did not decrease quickly enough to attract customers who were waiting for more affordable cards. Huang told Reuters:
“The crypto hangover lasted longer than we expected. We thought we had done a better job managing the cryptocurrency dynamics.”
The company’s provision for inventories purportedly expanded to $70 million in Q3, having more than tripled for the first nine months of the current year to $124 million. This also resulted in the decrease of Nvidia’s gross margins by 1.8 percentage points in Q3 to 60.4 percent. The margins drop is also attributed to $57 million in charges related to the company’s previous generations of chips following the plunge in cryptocurrency mining demand.
After Nvidia’s post of sales missed expectations for Q3, the company’s shares dropped over 16 percent in late trading:
Nvidia stock following Q3 announcement. Source: Quartz
Per the financial report, Nvidia’s overall revenue in Q3 was $3.18 billion, a 21 percent increase compared to $2.64 billion a year earlier, and up two percent from $3.12 billion in the previous quarter.
In August, Nvidia forecasted its Q3 revenue to be between $3.19 billion and $3.32 billion, stressing that it does not expect to make significant blockchain-related sales for the rest of the year.
At the same time, Nvidia’s revenue for the third quarter is higher than that recently projected by experts from analytical firm Trefis. The experts expected consolidated revenues to be a bit under $3.10 billion in Q3, of which 84 percent could be attributed to GPUs.
Ethereum-based payment platform OmiseGo partnered with a Singapore firm behind a popular ride hailing app to develop a Proof-of-Concept and promote blockchain tech.
Ethereum-based payment platform OmiseGo and blockchain protocol Mass Vehicle Ledger (MVL) have partnered to research blockchain technology, according to a press release shared with Cointelegraph Nov. 14. MVL is the protocol behind popular Singapore ride hailing app TADA.
MVL and OmiseGo will develop a Proof-of-Concept (PoC) to ascertain whether the decentralized OMG Network is suitable for MVL’s data record-keeping system. During the PoC, MVL will record data collected from TADA on the OmiseGo platform.
Moreover, the two companies have announced further technical and research cooperation on possible blockchain applications in TADA’s services.
On Nov. 7, MVL received a taxi provider license from the Land Transport Authority of Singapore, allowing it to launch its new taxi booking service, TADA Taxi. According to Business Insider, over 2,000 taxi drivers have joined the app through partnerships with local taxi companies.
Other taxi companies and ride-hailing services have explored applying blockchain technology to their business models. In May, Chen Weixing, the founder of Chinese ride hailing company Kuaidi Dache, revealed his plans to create a blockchain-powered ride hailing app, adding that the service might also include deliveries.
The automotive industry has also shown a marked interest in applying new technologies like artificial intelligence and blockchain. IOTA and Volkswagen demonstrated a PoC that used IOTA’s Tangle system for autonomous cars at Cebit ‘18 Expo in Germany last June.
Daimler AG — which produces Mercedes Benz and Smart cars — presented its own Blockchain-based digital currency MobiCoin to reward drivers for environmentally-friendly driving habits, such as driving at low speeds.
Chinese crypto mining manufacturer Canaan has let the application for its $400 million IPO on the Hong Kong stock exchange lapse.
Cryptocurrency mining equipment producer Canaan’s Initial Public Offering (IPO) application has lapsed, Reuters reported Nov. 15. The offering was set to take place on the Hong Kong Stock Exchange (HKEX).
Founded in 2013 in China, Canaan manufactures application-specific integrated circuits (ASICs) for digital currency mining. Canaan is the world’s second largest cryptocurrency hardware maker, collecting a revenue of 1.3 billion yuan ($187 million) in 2017. The company’s profit in the same year was 361 million yuan ($52 million), which is a 230 times increase from 2015, per business news outlet Quartz.
Canaan revealed its IPO plans in May, claiming to create the largest Bitcoin (BTC)-oriented offering yet seen when it would debut on the HKEX in July. While not mentioning a specific fundraising target, Cannan said the figure “could” reportedly circle $1 billion. However, the company subsequently lowered its target to $400 million.
Today, Reuters reported that Canaan has let its application for the IPO of at least $400 million lapse, purportedly due to questions about the company’s business model and prospects from the HKEX and regulators.
Sources close to the deal reportedly told Reuters that the IPO would not be conducted this year since a listing hearing was not updated by the HKEX. Canaan purportedly can rebid its IPO with updated financial information.
The news follows a recent statement issued by Hong Kong’s securities regulator, the autonomous Chinese territory’s Securities and Futures Commission (SFC), which sets out new guidelines for funds dealing with cryptocurrency, including exchanges. The statement read:
“In order to afford better protection to investors, the SFC considers that all licensed portfolio managers intending to invest in virtual assets should observe essentially the same regulatory requirements even if the portfolios (or portions of portfolios) under their management invest solely or partially in virtual assets, irrespective of whether these virtual assets amount to ‘securities’ or ‘futures contracts.’”
In October, Cointelegraph reported that major mining hardware producers, including Canaan, could be affected by recently imposed U.S. sanctions on Chinese goods. Analysts raised alarm as the technology had been reclassified by the office of the United States Trade Representative (USTR) to fall under a stricter tariff regime.