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  • News - 19 March 2019, 7:17 pm

    Binance Lite will enable the exchange’s Australian customers to buy Bitcoin with fiat money from supported newsagent stores. Major cryptocurrency exchange Binance is expanding its “Binance Lite” service to allow Australian residents to purchase Bitcoin (BTC) at newsagents, technology news outlet The Next Web reported on March 19.The new service Binance Lite — which will initially be introduced in Australia — is purportedly set to enable customers to buy digital currency with fiat money from more than 1,300 supported newsagents within the country. The service currently supports only the purchase of Bitcoin, although it will offer more digital currency and fiat options at a later date.Before using the service, customers are requested to pass account verification, including Know Your Customer (KYC) and Anti-Money Laundering procedures. Following that, users will be able to place an order online, deposit cash at a newsagent, and receive their Bitcoin “within minutes.” Australian customers of Binance Lite will reportedly be required to pay a five percent fee for operations.Earlier this month, CEO of Binance Changpeng Zhao hinted at the creation of a new fiat-to-crypto exchange in Argentina in a tweet. Following the tweet, crypto news website CoinSpice reported about an agreement between the government of Argentina with Binance Labs — the exchange’s investment and social impact arm — to co-invest in blockchain projects that are backed by the exchange.In January, Binance added support for credit card cryptocurrency purchases through its partnership with payment processor Simplex. Zhao said then that the exchange’s clients can purchase digital assets with credit cards and “start trading in minutes.”Last November, Binance confirmed to Cointelegraph that it would use an automated KYC application provided by financial software firm Refinitiv. This will purportedly allow Binance to integrate the World-Check Risk Intelligence database into their internal workflow and streamline the screening process for onboarding, KYC, and third-party risk due diligence.Read More

  • News - 19 March 2019, 6:56 pm

    Binance’s exclusive token launch platform Binance Launchpad completed a $4 million sale of Celer Network (CELR) tokens. Binance Launchpad, the token launch platform of the major global crypto exchange Binance, has completed a $4 million sale of Celer Network (CELR) tokens, the company wrote on March 19.The tokens sale was completed in 17 minutes and 35 seconds, with all 597,014,925 CELR tokens sold in a single session.As the company announced two weeks ago, the CELR token sale only accepted Binance’s own cryptocurrency Binance Coin (BNB), with each CELR token worth 0.000434 BNB or $0.0067 dollar equivalent. One BNB could purchase 2,303.35821 CELR tokens. The minimum investment amount was set at $20, while the maximum contribution amount was capped at $1,500.Binance Launchpad is an exclusive token launch platform of Binance that is designed to help blockchain startups raise funding to develop products targeting cryptocurrency adoption. As such, Celer Network represents a layer-2 scaling platform that aims to enable off-chain transactions for both payment transactions and generalized off-chain smart contracts.Previously, Binance Launchpad hosted two major tokens sales such as the Fetch.AI (FET) and the BitTorrent token (BTT). The BTT sale concluded on Jan. 28, with investors purchasing all 50 billion BTT tokens, worth of $7.1 million, in less that 15 minutes. The FET token sale raised $6 million dollars on Feb. 25.At press time, Binance is the second largest crypto exchange by daily trading volume, having been slightly overtaken by Hong Kong-based OKEx. Yesterday, trading analytics platform The Tie published research claiming that 90 percent of trade volumes reported by crypto exchanges may be incorrect.Read More

  • News - 19 March 2019, 6:00 pm

    According to a cybersecurity company, Israeli fintech companies are being targeted by malware. Israeli fintech companies that work with forex and crypto trading are being targeted by malware, according to a blog post from threat research department Unit 42 of cybersecurity company Palo Alto Networks published on March 19.Per the report, Unit 42 first encountered an older version of the malware in question, Cardinal RAT, in 2017. Since April 2017, Cardinal RAT has been identified when examining attacks against two Israel-based fintech companies engaged in developing forex and crypto trading software. The software is a Remote Access Trojan (RAT), which allows the attacker to remotely take control of the system.The updates applied to the malware aim to evade detection and hinder its analysis. After explaining the obfuscation techniques employed by the malware, the researchers explain that the payload itself does not vary significantly compared to the original in terms of modus operandi or capabilities.The software collects victim data, updates its settings, acts as a reverse proxy, executes commands, and uninstalls itself. It then recovers passwords, downloads and executes files, logs keypresses, captures screenshots, updates itself and cleans cookies from browsers. Unit 42 notes that it witnessed attacks employing this malware targeting fintech firms that engaged in forex and crypto trading, primarily based in Israel.The report further claims that the threat research team discovered a possible correlation between Cardinal RAT and a JavaScript-based malware dubbed EVILNUM, which is used in attacks against similar organizations. When looking at files submitted by the same customer in a similar timeframe to the Cardinal RAT samples, Unit 42 reportedly also identified EVILNUM instances.The post further notes that also this malware seems to only be used in attacks against fintech organizations. When researching the data, the company claims to have found another case where an organization submitted both EVILNUM and Cardinal RAT on the same day, which is particularly noteworthy since both those malware families are rare.EVILNUM is reportedly capable of setting up to become persistent on the system, running arbitrary commands, downloading additional files and taking screenshots.As Cointelegraph recently reported, a Google Chrome browser extension tricking users into participating in a fake airdrop from cryptocurrency exchange Huobi claimed over 200 victims.Also, a report noted last week that cybercriminals are reportedly favoring unhurried approaches in attacks made for financial gains, with cryptojacking as a prime example of this shift.Read More

  • News - 19 March 2019, 5:12 pm

    sponsored A Japanese company has launched a ERC-20-compliant stablecoin that is pegged to the U.S. dollar and supported by major Ethereum crypto wallets. A Japanese company has launched an ERC-20-compliant stablecoin that it says offers “absolute decentralization, maximum security and a reliable source of stability in the face of volatility.”As its name suggests, USDDex is directly pegged to the United States dollar, helping traders to move their money into crypto without exposing themselves to the erratic price movements seen in other major digital assets such as Bitcoin and Ethereum.The company believes that its stablecoin could become a viable alternative to fiat and trigger the mainstream adoption of cryptocurrencies, giving employers a safe way of paying their workers’ salaries while enabling consumers to make purchases with confidence.USDDex firmly believes that 2019 is going to be the year of the stablecoin, citing research that suggests that the monthly trading volume of the first five such coins in the market has now exceeded $100 billion. Indeed, even major corporations are getting in on the action, with reports suggesting that Facebook is engaged in a top-secret project to launch its own.The fixed rate of USDDex means that one of its tokens equates to $1. Adaptable to both centralized and decentralized exchanges, the firm says that its cryptocurrency is supported by most major Ethereum wallets, including MyEtherWallet, MetaMask, Ledger and Parity.Presently, the company is also preparing to list on 20 exchanges, including HitBTC, Stellar, Bibox and Changelly.Reliable and stableThe company says that every USDDex stablecoin is collateralized in excess, meaning that those who own this cryptocurrency are inoculated against wild price swings, irrespective of how the market behaves.More than 800 trading pairs are also supported, enabling users to switch from Ethereum, Bitcoin, XRP, EOS, Litecoin and hundreds of others to USDDex with ease.USDDex is available hereIn a video explaining its vision, USDDex executives argue that stablecoins are essential if crypto is going to be used on a widespread basis, as right now, prominent coins and tokens only prove beneficial to speculative traders.Ayako Nakamura, the company’s chief marketing officer, explained: “USDDex introduces the breakthrough technology and the possibility to develop an independent, transparent and potentially more stable monetary policy than ever before. The priority in the corporation is interaction with leading decentralized exchanges.“The highest level of estimated reliability is provided by open-source code — proved by a repeated comprehensive security audit as well as open information of each USDDex token. Everyone can review this information.”An experienced teamUSDDex’s CEO and founder is Hitoshi Shibata. The entrepreneur — who is part of a working group on blockchain integration into Japan’s banking sector — started the business after leaving a 15-year career at Mizuho Financial Group. According to the company’s website, he “successfully developed and implemented complex economic projects for governmental and private organizations” while serving in this role. He believes that decentralized stablecoins are going to represent the next big breakthrough in the crypto industry — and in the past, he has invested in blockchain projects including 0x and Binance Coin.He is…Read More

  • News - 19 March 2019, 4:52 pm

    One of the global leaders of electronic components distributions is working with BitPay to facilitate a cryptocurrency payment option. Avnet, Inc, one of the world’s largest distributors of electronic components and technology solutions providers, has announced a collaboration with crypto payment processor BitPay to accept cryptocurrency for the company’s services and products. The development was disclosed in an official press release published on March 19.Avnet, Inc., which has been listed on Fortune 500 for 24 years, had an annual revenue in 2018 of more than $19 billion.The press release writes that Avnet will accept payment with Bitcoin (BTC) or Bitcoin Cash (BCH), while BitPay will verify the purchased funds and complete the transaction. The company has also announced that it had “closed several multi-million-dollar cryptocurrency transactions within the first month of accepting bitcoin,” specifying that this also includes their work with on a new hardware wallet.The ability for the company to accept crypto will give Avnet customers more options for completing their financial translations, according to the company. The press release states:“By accepting bitcoin as a payment option, Avnet is continuing to break down the barriers customers face when getting their ideas to market by enabling easier access to its unique end-to-end ecosystem of design, product, marketing and supply chain expertise at every stage of the product lifecycle.”As Cointelegraph reported on Jan. 30, BitPay has also partnered with the Wikimedia Foundation, the non-profit and charitable organization that operates Wikipedia, to provide the possibility to accept donations in cryptocurrency.And, earlier today, leading Swiss online retailer Digitec Galaxus announced that it would accept 10 different cryptocurrencies as payment for its products.Read More

  • News - 19 March 2019, 4:41 pm

    QuadrigaCX’s co-founder Michael Patryn is allegedly formerly known as Omar Dhanani, who operated a credit card fraud scheme in 2002. A co-founder of controversial QuadrigaCX exchange was reportedly involved in multiple criminal activities in the past, Bloomberg reports on March 19.Michael Patryn, who co-founded Canadian crypto exchange QuadrigaCX along with Gerald Cotten in 2013, was previously known as Omar Dhanani, a person that was involved in multiple crimes in the United States, Bloomberg states.$145 million in clients’ crypto assets was found to be missing from the QuadrigaCX exchange after its co-founder and CEO Cotten died at the age of 30 from complications of Crohn’s disease in December 2018. The exchange is now ongoing legal and financial proceedings amid the controversy over the missing funds, having appointed Ernst & Young as an independent monitor in its creditor protection case.Patryn reportedly left QuadrigaCX in 2016, citing a fundamental disagreement with Cotten over the listing processes for the firm. According to Canadian newspaper Globe and Mail, Patryn and his partner, Lovie Horner, remain two of QuadrigaCX’s largest shareholders, although he has not had any involvement in the company’s operations since 2016.While Patryn has recently denied the allegations that he and Dhanani are the same person, Bloomberg reportedly acquired official Canadian records saying that Patryn legally changed his name twice — first losing his last name, Dhanani and then replacing his first name, Omar — in 2003 and in 2008.Dhanani, one of the alleged past identities of Patryn, was reportedly sentenced to 18 months in the U.S. federal prison for being involved in identity theft related to both bank and credit card fraud back in 2005. According to Bloomberg, 22-year-old Dhanani pleaded guilty to operating in 2002, a now-defunct marketplace that trafficked over 1.5 million stolen credit card and bank card numbers.In 2007, Dhanani also admitted guilt in separate criminal cases for for burglary, grand larceny and computer fraud, Bloomberg reports, citing California state court records.Per Bloomberg’s allegations, Patryn reinvented himself as a Bitcoin (BTC) entrepreneur after he was deported to Canada. According to Patryn’s LinkedIn profile, he is now based in Vietnam, and has been serving as founder and chairman at fintech Ventures Group (FVG), a Canada-based blockchain incubator.Patryn provided few details about his 13-years working experience before QuadrigaCX on LinkedIn, only specifying that he worked in many digital currency-related firms from 1999 to 2013.Recently, Cotten’s widow Jennifer Robertson revealed that Cotten was funding the exchange with his own money while it was in litigation with a major Canadian bank.Read More

  • Bitcoin Magazine - 19 March 2019, 4:08 pm

    Avnet has become the latest major enterprise to begin accepting payment in bitcoin and other cryptocurrency. On March 19, 2019, the company announced that it will allow customers to pay for goods and services using bitcoin and bitcoin cash. Crypto payment processor BitPay will facilitate the transactions.Founded in 1921, Avnet is one of the oldest major American electronics companies. With more than 15,000 employees and net income north of $250 million, it’s also one of the country’s larger technology firms. Today, its business centers around helping to design and manufacturer electronics for other companies.On Tuesday, Avnet announced that the companies it works with can now pay for their goods and services using bitcoin and bitcoin cash.The new payment options are available immediately, Sunny Trinh, the company’s vice president of demand creation, told Bitcoin Magazine in an email. He added that the company has already “closed several multi-million-dollar transactions” using cryptocurrency.“Our customers have been asking to pay in cryptocurrency, and we listened,” Trinh said. “Bitcoin gives our customers added flexibility, and we are excited to offer our customers the option to pay with bitcoin or bitcoin cash.”Avnet’s decision to begin accepting bitcoin and bitcoin cash reflects an effort to make it easier for businesses to purchase goods and services from the company by giving clients one less challenge to worry about during the difficult work of bringing new products to market.“We recognized that cryptocurrency would help our customers overcome the competition and challenges they face every day in taking their ideas from design to production,” Trinh said. “And we listened to our customers who said they would like the option to pay for our products and services with cryptocurrency.”“Cryptocurrency is one more way we help our customers bring their products to market faster,” he added.Sonny Singh, chief commercial officer at BitPay, expressed a similar sentiment. He wrote in a statement, “I predict Avnet will attract many new blockchain-focused customers from around the world that want to take advantage of paying with bitcoin.”The idea that accepting bitcoin is important for generating new business is notable, especially coming from a century-old, blue-chip enterprise. So far, most of the companies that have taken the step of accepting payment in bitcoin have been younger and smaller.This trend has found its way to Switzerland, as well. Digitec and Galaxus, an online retailer akin to Amazon, has also started accepting cryptocurrency as payments. Coinify will act as a payment processor for the website, accepting bitcoin, bitcoin cash, ether, litecoin and other notable altcoins and immediately converting these funds into Swiss francs for the retailer. This article originally appeared on Bitcoin Magazine.Read More

  • Bitcoin Magazine - 19 March 2019, 3:53 pm

    An Israeli court ruled on March 17, 2019, that banks can't enforce a blanket ban against all accounts linked to cryptocurrency. Instead, the court said, banks need to consider the specific type and scope of crypto-related activity before determining whether or not to open an account.The case involved a lawsuit begun in May 2018 by Israminers, a bitcoin mining company based in Ukraine, against the Union Bank of Israel. The bank refused to accept deposits into the company's account, and ultimately shut the account down because much of the money in the account was related to bitcoin.The bank's position was that allowing crypto-related activity within accounts that it managed put it at risk of facilitating money laundering. As a result, it decided as early as 2014 to refuse to provide services related to virtual currencies.The bank argued in court that it had notified the Supervisor of Banks, the Israeli government agency that oversees the banking industry, of its policy and was not told that it would pose a problem.However, in a March 17, 2019, ruling, judge Limor Bibi wrote that the bank's policy was too broad, according to the Israeli newspaper Calcalist. It is "unreasonable," he wrote, for banks to adopt a "sweeping policy" under which they ban all activity related to bitcoin or other cryptocurrency.That said, Bibi also wrote that banks are within their rights to refuse to provide services for customers operating in the crypto economy if a bank has a legitimate reason to believe that the customers might be seeking to launder money.In short, then, the court upheld the right of banks to refuse to provide services for crypto-related activities if they might violate the law. But banks can't ban deposits or accounts simply because they involve crypto.Broadly speaking, the ruling aligns with the recommendations released earlier this month by Israel's financial regulator regarding the crypto economy. The report encourages the government to support crypto companies while emphasizing the importance of disclosures and oversight of crypto activity. This article originally appeared on Bitcoin Magazine.Read More

  • News - 19 March 2019, 3:44 pm

    Cryptocurrency fund manager Stefanos Papanastasiou is about to be brought to court by his clients over alleged losses. The founder of what reportedly claims to be Australia’s first online mattress retailer OzMattress and cryptocurrency fund manager Stefanos Papanastasiou is about to be brought to court by his clients over the loss of over AUD$20 million ($14.2 million). Daily Australian newspaper The Age reported about the controversy on March 19.Per the report, Papanastasiou told his clients in 2017 that he had spent half a million Australian dollars ($355,000) to develop an algorithm that delivers substantial returns through the trading of Bitcoin (BTC) and Ethereum (ETH)-based tokens. According to the claim filed by property developer Savvas Alexiadis, one of his clients, Papanastasiou owes him more than AUD$2.7 million (nearly $2 million).The documents filed with the Supreme Court of Victoria state that Alexiadis transferred over AUD$2.1 million (nearly $1.5 million) into a Papanastasiou’s trading account. Furthermore, he reportedly also transferred an unspecified quantity of BTC into wallets managed by Papanastasiou.The claim also cites messages allegedly sent by Papanastasiou:“Sam, don’t get caught up in the details. Leave it to me. Let me know password login for ACX [trading account]. I’ll deal with whatever funds are in there … Eyes on the prize Sam. Understood? Got your back.”Furthermore, the documents also claim that Papanastasiou asked Alexiadis to transfer AUD$40,000 (over $28,000) to his wife, AUD$35,000 (nearly $25,000) to his sister and $450,000 (almost $320,000) to a mattress supplier in Thomastown, promising to send an equivalent in crypto assets.The Age notes that Papanastasiou and his wife, Shalini Ganapathy, defaulted on the purchase of a AUD$5.44 million house after December 2017, when Bitcoin had reached its $20,000 peak.The website of Papanastasiou’s mattress retail business, OzMattress, is seemingly offline at press time. The claim also notes that Papanastasiou has repeatedly refused to provide an account of trading activity and did not comply with requests to repay the amounts asked by his clients.In response to Alexadais’s claim to return the around $2 million, Papanastasiou reportedly said:“The Supreme Court action is new to me and I intend to defend myself against his claim as he has been compensated in excess of $2.7m […] Sam [Alexadais] and his associates have a lot to answer for as the truth of events is vastly different and far more sinister.”Also, Mark Thompson, a former Australian Football League coach accused of MDMA and methamphetamine trafficking in May last year, contributed over one million Australian dollars (about $709,000) to Papanastasiou’s fund as one of his clients.As Cointelegraph reported, the Australian anti-money laundering watchdog has recently suspended the registrations of two cryptocurrency exchanges in connection with an unrelated drug trafficking case.In other law enforcement and crypto news, a United States District Attorney also recently charged the founders of an international cryptocurrency pyramid scheme that involved the marketing of an allegedly fraudulent digital currency called “OneCoin.”Read More

  • Bitcoin Magazine - 19 March 2019, 3:42 pm

    As anxiety grows around every new twist and turn in the ongoing QuadrigaCX drama, along with extensive QuadrigaCX media coverage, Canada’s mainstream media has been calling on the government to bring in better oversight and regulation of cryptocurrency businesses, especially cryptocurrency exchanges.In response to these calls for more regulation and calls from some crypto businesses for more regulatory clarity, the Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) released a discussion paper on March 14, 2019, with a “New Proposed Platform Framework” that would aim to specifically tailor regulations to the special risks posed by cryptocurrency exchanges.The CSA consultation paper, which can be viewed here, asks 22 questions and requests comments from crypto/fintech companies, market participants/investors and other crypto stakeholders about what regulations would best fit in the unique new cryptocurrency marketplace.When Is a Crypto Exchange a Securities or Derivatives Dealer?As a number of observers have commented, this round of consultations is mainly about how to define the new business of cryptocurrency exchanges and how far to go in imposing old regulatory models on a new economic system.Calgary-based securities and cryptocurrency lawyer Matt Burgoyne commented on Twitter:“There is a lot to unpack in the new CSA consultation paper on cryptocurrency exchanges. Exchanges must consider whether their interactions with users create a derivative contract or futures contract.”He added, “Non-security tokens trading on Canadian exchanges may be derivatives and still subject to regulation … this is a really detailed set of consultation questions, comments from industry due May 15.”Lawyer Evan Thomas, who headed up a legal team at Osler, Hoskin & Harcourt LLP to produce a summary of the CSA consultation paper, told Bitcoin Magazine:“A big issue with this proposal is that it is not clear as a legal matter that Canadian securities regulators have jurisdiction to regulate platforms for trading bitcoin and other crypto-assets that are not securities.”One of the goals stated in the Osler paper is:“To ensure that the CSA does not exceed its jurisdiction over the cryptoasset industry, we are hopeful that Platform regulation will provide further clarity regarding types of cryptoassets and related services that are not subject to securities regulation, such as tokens that are not investment contracts or derivatives and non-custodial cryptocurrency wallets.”Third Time Lucky?The Canadian government has conducted two previous consultation rounds with the cryptocurrency industry (in 2014 and 2018) but Thomas, who is cautiously optimistic, notes that this new initiative is a more direct response to cases like that of QuadrigaCX.“Earlier regulation was directed at combating money laundering and terrorist financing. This proposed framework is motivated by investor protection concerns; that is, trying to protect crypto users who use custodial exchanges from risks like hacking, embezzlement and market manipulation,” Thomas explained.The ghost of QuadrigaCX can be seen in the current discussion paper which asks: What operational requirements should be put in place to prevent a collapse like that of QuadrigaCX? What measures can affect market integrity, fair pricing, disclosure of conflict of interest and business continuity planning?Would the Proposed…Read More

  • News - 19 March 2019, 2:35 pm

    BitGo clients will be able to hold their BCAP assets using qualified and regulated custody service BitGo Trust Company. Blockchain security firm and wallet service BitGo has announced support for Blockchain Capital’s ERC-20 token, according to a press release shared with Cointelegraph on March 19.Blockchain Capital’s BCAP token is a security token based on the Ethereum (ETH) blockchain that was launched in a $10 million initial coin offering (ICO) back in April 2017. BCAP represents an indirect economic interest to the limited partnership interest in the tokenized investment fund, and is the world’s first security token that was sold in an ICO.According to the recent BitGo announcement, BitGo users will now be able to hold their BCAP assets using BitGo Trust Company, a qualified and regulated custodian that provides compliant custody for security tokens. As a part of the announcement, BitGo has also introduced its multi-signature wallet security.Ben Chan, BitGo’s chief technology officer, said that qualified custodial services that are compliant with securities regulations are critical for users of the platform.Recently, Estonian Nasdaq-powered digital trading platform DX.Exchange announced the launch of its own security token trading and security token offering (STOs) listings. The platform reportedly allows investors to buy security tokens using both fiat and crypto such as Bitcoin (BTC), Ethereum, Tether (USDT) and Ripple (XRP).Previously, insurance giant AXA XL launched an insurance product that covers equity crowdfunding and STOs, and purportedly protects new online capital formation techniques, aiming to increase trust, confidence and security to potential investors guaranteeing that the issuer is insured.Read More

  • News - 19 March 2019, 2:17 pm

    Tencent and the Shenzhen Municipal Taxation Bureau have issued electronic invoices based on blockchain via a mobile payment platform. China’s first blockchain-based electronic invoice for a subway ride was issued at the Futian Station of the Shenzhen Metro, local finance publication Securities Daily reports on March 18.Shenzhen is the first economic special zone in China. The e-invoice function is the jointly developed project of the Shenzhen Municipal Taxation Bureau and Chinese tech giant Tencent, which provided the blockchain technology back-up through its 1 billion user social media platform WeChat.   As the publication states, after the end of each trip, the Shenzhen Metro passenger code can be seen on the WeChat Payment voucher page. It also underlines that as of March 15, 2019, the Shenzhen City Blockchain electronic invoicing system has issued more than one million electronic invoices backed with blockchain tech, with the total invoices amounting up to 1.33 billion yuan (around $200 million).The article states that the blockchain electronic invoice system for subway passengers, once launched, is expected to record 170,000 online self-service invoices a day.The application of the Shenzhen Metro is the first step in the implementation of blockchain-backed e-invoicing that will affect all public transport system including “taxis, airport buses and other traffic scenes simultaneously with on-line blockchain electronic invoicing functions.”As Cointelegraph reported on Dec. 12, the Shenzhen Municipal Taxation Bureau and Tencent announced that they had successfully linked a blockchain invoice system with the WeChat payment platform.Last month, SUBE (Sistema Único de Boleto Electrónico), the Argentinian state public transport card, partnered with Bitex, which provides blockchain-driven financial services to businesses to provide the payments’ ability by Bitcoin (BTC), as Cointelegraph reported on Feb. 9.Read More

  • Bitcoin Magazine - 19 March 2019, 1:49 pm

    Crime isn’t supposed to pay, but sometimes the wages of sin are paid in bitcoin. Last week, Japanese police reported that 2018 saw a tenfold increase of cryptocurrency money laundering. In 2017, Japan’s National Police Agency discovered fewer than 700 instances of crypto money laundering. Last year, they found more than 7,000 cases. What is it about this new asset class, which is enabled by blockchain distributed ledger technology, that makes it so appealing to criminals? And what can be done to keep cryptocurrency clean?Cryptocurrencies present the world with a radically new way of thinking about value. As a rule, there’s no central issuer like a mint, no printed bills or stamped coins, and no government affiliation. Given these radical differences from traditional money and cryptocurrency advocates’ concerns about institutions and centralization, some uncontroversial and long-established aspects of traditional finance have proven unpopular in the crypto world. One of the most important disputes, and the most central to stopping crime, is over anti-money laundering (AML) and know-your-customer (KYC) regulations.In addition to stymying money laundering, KYC/AML rules help combat illegal drug trade, halt terrorist financing, and prevent trafficking. Outside observers are sometimes surprised that such measures inspire resistance from the cryptocurrency world, but many of the technology’s earliest adopters believed in full anonymity as a principle. Though absolute anonymity may have a theoretical appeal for some, it may cause more problems than it solves. When cryptocurrency exchanges are hacked, anonymity protects the perpetrators. When the Mt. Gox exchange was hacked in 2014, the hundreds of millions of dollars of “lost” money could be traced to accounts, but those accounts could not be linked to individuals. Similarly, while anonymity can permit bad actors to execute money laundering, it makes price manipulation via pump-and-dump schemes far simpler. By making these activities possible, anonymity contributes to cryptocurrency’s notorious volatility and makes it that much less likely that digital currencies will become stable stores of value.Contrary to some arguments, KYC and AML are not “centralizing” forces that corrupt the blockchain. Rather, they will lead to greater decentralization by inspiring greater faith in the network and encouraging new participants in blockchain technology. The blockchain community can be fractious, but if there’s one thing almost universally agreed upon, it’s that major financial institutions will shortly enter the market. The largest banks and financial firms, many of them centuries old, might be persuaded to invest in volatile assets, but they’re far more reluctant to stake claims in sectors considered legally suspect. KYC and AML eliminate a substantial barrier to entry; their implementation could bring greater and safer investment to blockchain technology.Roughly half the world’s population currently uses banking services; as developing economies emerge onto the world stage, the number of bank users will only grow. As globalization progresses, this newly banked population will cross oceans and borders, further increasing the already high demand for remittance payments and international money transfers. AML and KYC protocols enable banks to confidently invest in cryptocurrency and encourage their customers to do the…Read More

  • News - 19 March 2019, 1:37 pm

    A reports from trading analytics platform The Tie shows that the majority of exchanges may be faking their exchange volume. Almost 90 percent of cryptocurrency exchanges’ reported trade volumes may be incorrect, new research from trading analytics platform The Tie warned in a digest released on March 18.Reporting on figures gathered from 97 exchanges, researchers found that the vast majority of the volume claimed to come from users may not in fact exist.The revelations came as a result of calculations of lesser-known exchanges versus well-known businesses such as Binance and Kraken.“In total we estimated that 87% of exchanges reported trading volume was potentially suspicious and that 75% of exchanges had some form of suspicious activity occurring on them,” The Tie wrote in social media comments on the findings. The organization added:“If each exchange averaged the volume per visit of CoinbasePro, Gemini, Poloniex, Binance, and Kraken, we would expect the real trading volume among the largest 100 exchanges to equal $2.1 (billion) per day. Currently that number is being reported as $15.9 (billion).”Exchanges have often fielded accusations of volume misreporting: a similar reported issued in March 2018 warned of similar problems with data from exchanges.Then, as now, Binance CEO Changpeng Zhao (CZ) took industry participants to task, arguing listing resources such as CoinMarketCap added to the confusion.“Why do exchanges fake volumes?” he queried on Twitter following The Tie’s report. CZ also wrote:“(CoinMarketCap) is [the] highest traffic website in our space, and [the] biggest referrer for all exchanges. Ranked high on CMC has benefits for getting new users. BUT at the expense of DESTROYING CREDIBILITY with pro users.”Zhang repeated similar claims about CoinMarketCap which appeared in December, focusing on the the top 25 Bitcoin (BTC) trading pairs.Last month, meanwhile, Cointelegraph reported on how overall exchange volumes had dropped to their lowest levels since May 2017.Read More

  • News - 19 March 2019, 1:23 pm

    Following a series seed round backed by Mike Novogratz’s Galaxy Digital, Bison Trail will soon launch its blockchain infrastructure. New blockchain startup Bison Trails has received an investment of $5.25 million in a seed round backed by Mike Novogratz’s crypto merchant bank Galaxy Digital. The firm announced the fundraising in a Medium post on March 15.Led by two early stage venture capital firms Initialized Capital and Accomplice, the series seed round was also backed by both Galaxy Digital and blockchain-focused asset management firm Distributed Global. Other investors included Notation Capital, Homebrew and Charge Ventures.Bison Trails’ blockchain infrastructure is designed to offer a way to launch secure, available and geographically distributed nodes on a participatory blockchain network, the press release notes. The Bison Trails platform enables a number of blockchain tools including staking, validating, voting, transacting and securing blockchain protocols.Accomplice has confirmed the news of their leading the co-lead investment in New York-based Bison Trails. Founded by Joe Lallouz and Aaron Henshaw, Bison Trails is designed to optimize block production and validation, and is actively securing a number of protocols including Livepeer, Tezos, and Decred, Accomplice wrote on its Medium.Previously, Mike Novogratz’s Galaxy Digital invested in blockchain security company CipherTrace, which reportedly raised $15 million in venture capital. CipherTrace aims to improve tools for crypto intelligence, anti-money laundering solutions, blockchain analytics and forensics and compliance.Read More

  • News - 19 March 2019, 1:06 pm

    As the Fourth Industrial Revolution approaches, blockchain and AI are starting to be used by companies together, rather than separately. Human imagination and the strive to turn science fiction into science fact goes back to ancient times, but has only truly begun to manifest itself in the last 50 years. Though mostly unseen by average users, artificial intelligence (AI) is already deeply embedded in the basic processes people have become accustomed to.Blockchain technology has come to the forefront in much the same way AI had, through a long development process full of trials, tribulations, ignorance and triumphs over skeptics and critics alike.The application potential for blockchain is no less extensive than it is for AI — and today, these technologies are more complementary than competitive in their natures. Both AI and blockchain work on the principle of analyzing vast amounts of data and solving the issues of specific industries. Just as AI found its applications in the fintech sector as a data aggregator and automated solution determiner, so began blockchain in its permeation into areas of application where its properties can be of most use.Into the unknownSociety is now entering what is known as the Fourth Industrial Revolution. But unlike the first three, which were based on the application of machinery for streamlining of the means of mass production through digital information accessibility, the new wave of technological progress promises to be a revolution of automation, rather than an involvement of masses of people needed for maintaining industrial processes.AI and blockchain may become the leaders of the Fourth Industrial Revolution, as they can allow artificial constructs and programs to perform a vast number of tasks that had previously required human labor and entailed high risks of error. According to a study carried out by researchers from PwC in 2018, 30 percent of jobs may become automated by the 2030s, with 44 percent of workers with a low level of education being at particular risk. At the same time, as the report showed that automation could help the United States’ gross domestic product (GDP) reach $15 trillion by 2030.The background underpinning the modern world is big data, the factor uniting blockchain and AI in their applications.The modern world produces a staggering amount of information that needs to be processed. Since the information being produced is of an endless variety of topics, there is physically no human workforce capable of analyzing such vast amounts of data. The AI can analyze large amounts of data and blockchain can serve as the immutable foundation for securely storing the records for use by various industries, since the Fourth Industrial Revolution is more of a breakthrough in data analysis.Complementing each otherBy being able to continuously analyze data under a strict protocol required for achieving desired results, AI leads the way by allowing data to be properly stratified and shared. This essential attribute automates a mundane process and brings to the forefront one of the main qualities of AI in the form of efficiency.Blockchain, on the other…Read More

  • News - 19 March 2019, 11:35 am

    A South Korean hospital plans to improve the accuracy of its healthcare data by using a blockchain-based platform. A major hospital in South Korea’s capital city has announced plans to launch a blockchain-based platform aimed to improve its medical services. The news was reported by the Daily Medi, a healthcare sector-focused Korean news outlet, on March 17.According to the publication, the “Smart Hospital” project was jointly developed by the Korean Ministry of Science and ICT and the Seoul Medical Center, and aims to improve data accuracy and reduce processing timing for the aforementioned hospital. The article also states:“Seoul Medical Center will build an automated, personalized, integrated medical information platform by providing electronic prescription delivery, certificate issuance, and insurance claims through the blockchain-based system.”The Smart Hospital project is one of the 2019 blockchain-based public project development plans issued by the Korea Internet and Security Agency, a sub-organization of the South Korean Ministry of Science and ICT, last December, with the aim of promoting the implementation of blockchain tech within the domestic industry.According to the publication, the Smart Hospital project is scheduled to be launched this April.As Cointelegraph reported on Feb. 19, in order to promote the country’s blockchain projects, the South Korean capital’s government announced the establishment of the “Seoul Innovation Growth Fund,” with the goal to invest more than $1 billion in blockchain and fintech startups by 2022.Back in last November, Myongji Hospital, another major South Korean hospital located in the city of Goyang, signed a Memorandum of Understanding with a domestic IT firm to develop a medical services platform backed with blockchain tech, as Cointelegraph wrote on Nov. 13.Read More

  • News - 19 March 2019, 11:11 am

    Leading Swiss online retailer Digitec Galaxus has announced that it now accepts cryptocurrencies. Leading Swiss online retailer Digitec Galaxus has announced that it will now accept cryptocurrencies, according to a press release published on March 19.Per the announcement, the shop is now accepting Bitcoin (BTC), Bitcoin Cash (BCH), Bitcoin SV (BSV), Ethereum (ETH), Ripple (XRP), Binance Coin (BNB), Litecoin (LTC), Tron (TRX), NEO (NEO) and OmiseGO (OMG) for purchases worth over CHF 200 (about $200). The release further claims that the shop hosts around 2.7 million products, ranging from wheat beer to gaming PCs.The new payment method was reportedly jointly developed as part of a pilot project with Swiss payment processor Datatrans and in collaboration with Danish crypto payments startup Coinify. The system opens 15-minute-time windows for customers, during which the crypto exchange rate doesn’t change in order to make the payment with a fee of 1.5 percent.As part of its move towards crypto, the company also added a crypto wallet category to ecommerce platform, accompanied by a dedicated guide, and released a blog post under the title “Diamonds or Gold Are Better Suited to Get Rid of Illicit Money.” In the latter post, the company’s chief innovation officer Oliver Herren admitted that he is not fully convinced of the advantages of blockchain over traditional database systems. Still, he concludes:“But maybe I just haven’t invested enough time in fully understanding how the blockchain ecosystem works.”Lastly, the company also released a blog post dedicated to its internal engineering team behind crypto integration. In the post, which is mostly an interview, the company explains on a high-level what blockchain is.According to ecommerce data platform ecommerceDB, Digitec Galaxus’ net sales amounted to over $261 million in 2018 and the store, first launched in 2010, is the world’s 341st biggest online retailer.Other large retailers internationally have also looked into the idea of adding crypto payments options on their platforms, with’s acceptance of Bitcoin payments as early as 2014 as a major example.As Cointelegraph reported in April last year, Canadian online trading and barter platform Bunz Trading Zone is launching its own cryptocurrency.Also, in February last year, Japan’s largest e-commerce company Rakuten, with a market capitalization of over $12.5 bln, announced its own plans to launch a cryptocurrency called Rakuten Coin.Read More

  • News - 19 March 2019, 10:11 am

    Québec’s financial markets regulator has asked investors in Blockchain Lab to come forward. Québec’s financial markets regulator has asked investors in the firm Laboratoire Blockchain to come forward, now that the firm and associated individuals face a sweep of injunctive orders over their alleged violations of securities laws. The appeal was made in an official statement published on March 18.The AMF (l’Autorité des marchés financiers) states that the Québécois Financial Markets Administrative Tribunal (TMF) issued a series of injunctive orders against Laboratoire Blockchain (also known as Blockchain Lab) and three associated individuals — Jonathan Forte, Benjamin Forte and Nicolas Barbasch-Bouchard — on March 12.The orders, issued due to alleged breaches of national securities laws, prohibit the defendants from all activities related to the promotion and transaction of securities. They also stipulate that the defendants must not dispose of any funds or cryptocurrencies, as well as any mining equipment or other relevant hardware, in their possession.Moreover, the TMF has reportedly demanded that Blockchain Lab remove any promotional material or publication in connection with its activities, in particular from Facebook.Anyone who invested in Blockchain Lab or used the defendants’ services is requested to contact a direct line for an AMF official no later than April 1, 2019.This January, crypto derivatives trading platform BitMEX refuted media reports that had alleged that a regulatory crackdown from the AMF had prompted it to close Québécois accounts, stating that the regulator had been satisfied with the platform’s swift cooperation on all requests.  Québec has also made crypto headlines in recent weeks over a controversy in regard to electricity provisions for crypto miners. Earlier this month, the government stated it does not see the added value provided by the mining industry, and is not interested in providing low-cost power rates for miners via state utility Hydro-Québec. The latter, with its low cost power, had become increasingly popular with mining operators facing less advantageous conditions worldwide.Read More

  • News - 19 March 2019, 9:56 am

    Coinbase announced that support for Stellar Lumens (XLM) has been added to its services, including iOS and Android apps. United States-based cryptocurrency exchange and wallet service provider Coinbase has added support for Stellar Lumens, according to an announcement published on March 18.The update states that users can now store, buy, and send Stellar’s cryptocurrency, the Stellar Lumen (XLM), on the Coinbase website, as well as on the Coinbase iOS and Android apps.The publication underlines that the newly added cryptocurrency will be available for the majority of the customers, with the exception of Coinbase users in the United Kingdom or in the U.S. state of New York.Last week, the company’s professional trading platform, Coinbase Pro, announced the start of accepting XLM deposits.As Cointelegraph reported on March 17 in a market analysis, the price of the Stellar’s cryptocurrency XLM has risen sharply, making XLM the best performing major cryptocurrency of the past week.Yesterday, IBM and Stellar jointly announced that six international banks have signed letter of intent to issue their own fiat-backed stablecoins on IBM’s cross-border payment network, which is based on Stellar.At press time, XLM has gained around 5.66 percent on the day and is trading around $0.115, according to data from CoinMarketCap.Read More

  • News - 19 March 2019, 9:27 am

    The US SEC is soliciting industry input as it potentially reconsiders existing custody rules for investment advisers regarding crypto. The United States Securities and Exchange Commission (SEC) is soliciting industry input as it potentially reconsiders existing custody rules in specific cases of digital asset trading and settlement.The SEC launched its information gathering initiative in an open letter to Karen Barr, president and CEO of the Investment Adviser Association, on March 12.Currently, the Custody Rule (Rule 206(4)-2) of the Investment Advisers Act of 1940 determines rules that aim to protect investors who delegate custody of their funds or securities to professional investment advisors.As the letter outlines, such custodial authority carries an ”increased risk of misappropriation or misuse of [investors’] assets,” and investment advisors are thus legally bound to register with the SEC and to comply with a series of rules for sound custodial practices.The SEC states that its appeal for input regards the application of the Custody Rule to digital assets, and more specifically as to whether any revisions to the rule might be necessary “regarding the regulatory status of investment adviser and custodial trading practices that are not processed or settled on a delivery versus payment (“Non-DVP”) basis.”A DVP settlement procedure is where a buyer’s payment for a given security is due at the same time as that security’s delivery.As Katherine Wu — director of business development at New York City-based crypto research firm Messari — has noted in her coverage of the SEC initiative, an example of DVP at work is the US DTC (Depository Trust Corporation) system. Here, the DTC clearing house acts as an SEC-registered custodian and intermediary that ensures the secure payment and transfer of securities between parties.In cases of non-DVP settlement procedures — i.e. where payment is made after the delivery of a security —  the settlement risk is deemed to be higher.The SEC is thus soliciting input on non-DVP settlement in the digital asset space, regarding both the settlement process of peer-to-peer digital asset transactions, as well as intermediated settlement that involve exchanges or over-the-counter trading platforms.Among the questions in its letter, the SEC solicits information on what types of digital asset instruments trade on a non-DVP basis, what role custodians play in non-DVP digital asset trading and how they currently mitigate risks.Wu, who worked as a legal intern at the SEC prior to her crypto industry involvement, has given her perspective on the agency’s first move:“What’s interesting to me is that the SEC does not seem to be jumping the gun in subjecting all non-DVP trades as under the custody rule, but rather is posing this as an opportunity for them to assess the underlying custody risks.”  As reported, the SEC’s chairman Jay Clayton has recently emphasized that custodial practices are a particular area of scrutiny as the agency mulls the regulation of new, prospective crypto investment instruments such as exchange-traded funds.Read More

  • News - 19 March 2019, 8:38 am

    The move follows several fee hikes aiming to improve the dollar peg of Maker’s Dai stablecoin. Decentralized Autonomous Organization (DAO) MakerDAO (Maker) has upped its demands to increase one of its network fees, this time to 7.5 percent, the company confirmed in a blog post on March 18.Maker, which issues USD-pegged stablecoin Dai (DAI), is seeking to improve the cryptocurrency’s stability.The organization aims to do so by raising its so-called Stability Fee, a charge levied by Maker participants when Dai is used for loans on its network.As Cointelegraph reported, March had already seen a governance poll ask users to approve a fee hike of up to 5.5 percent, which users subsequently approved. A new poll, which began March 18 and will run through March 21, wants to boost this figure yet again.“Based on last week’s governance call, the MakerDAO community is moving forward with a Governance Poll to gauge sentiment for an additional Stability Fee increase,” Maker explained in the blog post.Developers had previously stated that earlier increases had not impacted negatively on the Maker ecosystem.Speaking to tech news publication BreakerMag, CEO Rune Christensen continued the calm tone over Dai, admitting its inexact dollar peg would likely continue.“It’s never exactly at $1. You can always buy it for slightly above $1 and sell it for slightly below. But it’s much closer to $1 now,” he said.At press time, Dai was trading at $0.9938 per coin, while Maker’s MKR averaged around $706.30 on major exchanges.Read More

  • News - 19 March 2019, 8:23 am

    Major South Korean cryptocurrency exchange Bithumb is reportedly slashing up to 50 percent of its workforce. Major South Korean cryptocurrency exchange Bithumb is reportedly cutting up to 50 percent of its workforce, a report from CoinDesk Korea stated on March 18.According to the report, an unnamed official has confirmed that the exchange will reduce its staff from 310 (at the start of March) to around 150, and is offering a voluntary redundancy plan and training support to employees:“Voluntary retirement is part of our support program for former employees and is intended to provide assistance and training for job placement. Apart from that, [Bithumb’s] trading volume has decreased compared to the previous year, [so] we are trying to provide internal measures. We will continue to add necessary personnel for various new businesses.”To press time, Bithumb has not responded to Cointelegraph’s request for comment.Amid the crypto winter, Bithumb’s reported move to reduce its head count has been preceded by a host of other firms in the sector; mining giant Bitmain, blockchain software firm ConsenSys, decentralized social network Steemit and crypto exchanges Coinsquare and Huobi are among those to have made significant cuts in recent months.According to CoinMarketCap (CMC), Bithumb has seen roughly $1.3 billion in trades over the 24 hours before press time. The exchange was removed from CMC’s global exchange rankings in January 2018, due to the site’s concerns over reportedly “extreme divergence in prices from the rest of the world” on the platform and its fellow South Korean exchanges.Read More

  • News - 19 March 2019, 8:18 am

    The new product comes as Bitmain continues to fight a market slowdown which has resulted in cost-cutting moves. Cryptocurrency mining giant Bitmain has released a new version of its Antminer Z series machines for Equihash algorithm coins, the company confirmed in a blog post on March 19.The Antminer Z11, which comes around ten months after the release of its predecessor the Z9, claims to treble the hashing power available for its target cryptocurrencies.Equihash is the algorithm used in altcoins such as Zcash (ZEC) and ZenCash (ZEN).The move sees Bitmain continue to forge ahead with new products despite challenging market conditions within the mining industry, the company previously closing down some aspects of its operations.“The new Antminer is now pre-selling on Bitmain’s official website and will start shipping shortly,” the blog post confirmed.In February, Bitmain rolled out its latest offering for SHA256 algorithm cryptocurrencies, such as Bitcoin (BTC) and Bitcoin Cash (BCH).Similar to that hardware, the Z11 is an ASIC miner, with the Zcash community previously debating over whether to make the coin’s network resistant to ASICs.Concerns focused on ASICs making the mining landscape less diverse and increasing the possibility of a hostile entity gaining control.In light of the debate, Bitmain appears to want to offer more transparency to its target market.“To preserve the Zcash community’s values around security, reliability and accessibility, Bitmain had previously Tweeted real-time updates to ensure more transparency and will continue to provide shipping updates of the first batch of the Antminer Z11,” the blog post said. It continued:“These commitments to transparency will continue to provide the Zcash foundation and community with the security, reliability and accessibility they desire of manufacturers.”Read More

  • News - 19 March 2019, 7:49 am

    Jeremy Allaire has said that stablecoins using open standards will prevail as the sector continues to see new market entrants. Jeremy Allaire, co-founder and CEO of payments company Circle, has said that as the sector continues to see new market entrants, stablecoins using an open standards approach will prevail. Allaire made his remarks during an interview with Fortune’s crypto-focused segment The Ledger on March 19.As reported, Circle launched its US dollar-backed, ERC-20 stablecoin USD Coin (USDC) last fall, via the consortium Centre, which counts crypto exchange Coinbase and mining firm Bitmain as members. Centre is also the name for the token’s open network and open source protocol, which provides interoperability in a bid to secure wide ecosystem support for the asset.In his interview with The Ledger, Allaire welcomed recent, unconfirmed reports of Facebook’s still-secretive plans to launch its own stablecoin asset, which would reportedly be integrated for payments within a canopy messaging service for WhatsApp, Facebook Messenger and Instagram:“[Facebook’s reported plans are] very, very positive in our view overall. The approach that we’ve taken is to create a consortium model. When we think about a standard for how fiat money works on the internet, it’s really critical that it’s an open standard that many companies can implement, that has an self-governance mechanism — [that provides] a technical standard as well as a membership framework.”Using the metaphor of creating “an HTTP for money on the internet” that could support global, broad participation from multiple actors, Allaire said he believed such an approach is “ultimately going to be much more successful than a single company issuing a [crypto]currency themselves.”As reported yesterday, the Winklevoss twins have echoed Allaire’s perspective in affirming the Facebook stablecoin development as a positive sign for the crypto industry as a whole, while underscoring the project’s prospective limitations.This year, United States banking giant JPMorgan Chase revealed its own plans to launch a proprietary stablecoin, which has also drawn criticisms over its lack of interoperability.When Circle closed its Bitmain-led $110 million fundraising round to raise capital for the USDC project last May, its private valuation hit $3 billion. More recent figures for the firm, in the aftermath of the protracted crypto bear market, have not been officially reported — although Allaire told the Ledger the company continued to see “very significant growth year last year.”In summer 2018, Allaire pitched stablecoins as a vital component of the infrastructure for creating a tokenized global economy.Read More

  • News - 19 March 2019, 2:50 am

    Craig Wright has reportedly filed over 100 blockchain-related patents since 2017, in addition to some pertaining to smart contracts and digital assets. Craig Wright, an Australian computer scientist who has sometimes claimed to be Bitcoin (BTC) creator Satoshi Nakamoto, has reportedly applied for a slew of blockchain-related patents since 2017. Tech news site The Next Web (TNW) published its research regarding Wright’s patent filings on March 18.TNW reports that, since August 2017, the World Intellectual Property Organization (WIPO) has published 155 patent applications filed by Wright. As with the United States Patent and Trademark Office, the WIPO publishes patent applications to notify the public that there is a potential new technology in a certain industry or space.Wright will only receive proprietary control over the patents’ contents if they are formally awarded by the WIPO. Per TNW, whether the WIPO awards a patent is dependent on if the office deems it sufficiently innovative.TNW states that the term “blockchain” was used in patent titles 114 times, while “cryptocurrency” was only mentioned six times and “Bitcoin” was never mentioned. References were also made to smart contracts and digital assets.Some have argued that Wright is a “patent troll” who is attempting to amass blockchain-related patents not to use them, but to extract rents from companies that want to apply the technology. Marc Kaufman, an attorney who co-chairs the Blockchain Intellectual Property Council at the U.S. Chamber of Digital Commerce, told Fortune:“His tactics and activities have all the marks of being a patent assertion entity or what’s pejoratively known as a troll. I’m not aware of his companies having any products.”Last year, Wright was sued for $4 billion when the estate of David Kleiman — a computer scientist and cyber-security expert, whom many suspect to have been one of the developers behind Bitcoin and blockchain tech — claimed that Wright stole billions of dollars worth of Bitcoin.According to the plaintiffs, Wright recognized that the family were unaware of Kleiman’s wealth and “forged a series of contracts that purported to transfer Dave’s assets to Craig and/or companies controlled by him. Craig backdated these contracts and forged Dave’s signature on them.”In a recent development in the case, software engineer and Bitcoin pioneer Jeff Garzik was subpoenaed by a U.S. District Court. The subpoena calls Garzik to appear in court and with any evidence regarding the “personal theory” that Kleiman was Satoshi Nakamoto. The subpoena also orders Garzik to provide all communications, agreements and documents related to both Wright and Kleiman.Read More

  • News - 19 March 2019, 1:20 am

    The crypto elite are hiring bodyguards, but that may change once the industry becomes more legitimate. Security is paramount in crypto. “Keep your hardware wallets safe,” we’re told. “Keep your private keys safe.” “Keep your seed words safe.” “Keep your computer safe.” This list could go on almost indefinitely, and while you might be forgiven for assuming that it contained only objects of an electronic or cryptographic constitution, you’d be wrong. Because one of the most important links in this chain of security is your own self.Yes, what good is a securely held private key if thieves force you at gunpoint to tell them what this key is? This might seem like an improbable risk for anyone with only modest savings in crypto, but for anyone with hundreds of thousands or even millions of dollars worth of Bitcoin in their wallets, it’s all too real. The kidnappings of Pavel Lerner and Skycoin’s “Synth” underline this point forcefully, so it’s no wonder that an increasing number of crypto millionaires and CEOs are choosing to enlist the services of personal bodyguards.However, while it’s clear that a large number of “cryptonaires” currently make use of bodyguards, it’s likely that third-party solutions to personal security may soon emerge and make them less necessary. It’s also possible that the safety of high-profile figures will improve in parallel with an increase in regulations and the standardization of the industry, since, in some cases, it would seem that threats to security are associated with the questionable business practices of those threatened.Being your own bank carries risksTadas Kasputis is one of the many cryptocurrency executives who now employs the services of personal bodyguards. For a while, the founder of CoinStruction and the ExMarkets crypto-exchange didn’t see any use for them, but he tells Cointelegraph that this changed in 2015, after he was kidnapped.”Yes, actually I was kidnapped in my hometown Kaunas city in Lithuania,” he said. “They came out of nowhere, pushed me into a van and drove around town trying to get me to tell them my bitcoin wallet passwords. Their plan did not work and they’re now facing charges in Lithuanian court. That was the only time it happened, but it was enough.”As a result of this incident, Kasputis states that he “decided to put extra security measures to protect me and my family,” although he didn’t specify the extent of the protection he now pays for (perhaps for security reasons). And he’s not alone in taking additional security measures, because even though most cryptocurrency executives are understandably sheepish when it comes to divulging specific details, there’s ample online record of such execs using bodyguards.Most notably, Ethereum co-founder Anthony Di Iorio is one of these figures. While he didn’t reply to a request for comment, a Fortune interview from June describes him walking around Manhattan with a private bodyguard, while a November article from The Globe and Mail offers further detail, revealing that he employs seven full-time bodyguards.”Being my own bank, there are consequences — I’m at risk,” he told the Canadian…Read More

  • News - 19 March 2019, 12:55 am

    The Cabinet of Japan has reportedly approved new regulations in regard to cryptocurrency margin trading. Japanese financial regulators have reportedly introduced new regulations for cryptocurrency margin trading, local news agency Nikkei reported on March 18.The Cabinet of Japan, the executive branch of the country’s government, has reportedly approved draft amendments to Japan’s financial instruments and payment services laws, limiting leverage in cryptocurrency margin trading at two to four times the initial deposit.Margin trading is the use of borrowed funds from a broker to trade a financial asset, thus forming a collateral for the loan.The new rules — which are reportedly et to come into force in April 2020 — will require cryptocurrency exchange operators to register within 18 months of that date, which will purportedly enable the Financial Services Agency (FSA) to introduce relevant measures in regard to unregistered cryptocurrency “quasi-operators.”Following promulgation of the new regulations, entities dealing cryptocurrency will ostensibly be monitored similarly to securities traders in order to protect investors. Additionally, cryptocurrency operators will be divided into groups to identify those engaged in margin trading and those issuing tokens through initial coin offerings (ICOs).With this move, regulators reportedly aim to secure investors from getting caught up in Ponzi Schemes, as well as encourage legitimate companies to practice offerings as fundraising tools.In January, the FSA revealed that it was considering the regulation of unregistered firms that solicit investments in cryptocurrencies. The development is reportedly a bid to close a loophole in the country’s existing regulatory framework, in which unregistered firms that collect funds in crypto rather than fiat currencies remain in a legal gray zone.Back in August 2018, the commissioner of the FSA said that the agency wants the cryptocurrency industry to “grow under appropriate regulation” in order to find the “balance” between consumer protection and technological innovation, noting:“We have no intention to curb [the crypto industry] excessively. We would like to see it grow under appropriate regulation.”Read More

  • News - 18 March 2019, 11:05 pm

    Lobbying on blockchain and crypto has reportedly grown on K Street, having tripled over the past year. The number of lobbies working on blockchain technology issues in Washington D.C. tripled in 2018, politics-oriented news outlet Politico reported on March 18.The number of entities lobbying on digital currencies and blockchain reportedly grew almost thrice in the course of the past year, reaching 33 projects in the fourth quarter of 2018 compared to 12 in the same period of 2017.Jerry Brito — executive director at the non-profit organization Coin Center that works with Reps. Warren Davidson (R-Ohio) and Darren Soto (D-Fla.), both known for their cryptocurrency-friendly attitude — reportedly suggested that the growth is driven by securities regulation.In January, Soto stated that most cryptocurrencies should not be regulated under the country’s securities regulator. According to Soto, crypto should be overseen by the Commodities and Futures Trading Commission and Federal Trade Commission — rather than classed as securities under the Securities and Exchange Commission’s charge.Blockchain companies purportedly face more difficulties when it comes to the technology’s deployment outside digital currencies. According to lobbyist Dina Ellis Rochkind, blockchain firms are still in the early stages of winning allies in Congress. Izzy Klein from Ripple-backed Klein/Johnson Group, which lobbies for the Securing America’s Internet of Value Coalition, said:“I think that when you have a new technology and new platforms in older and heavily regulated spaces, you need as many legitimate voices and boots on the ground that you can get.”Last year, major industry leaders such crypto exchange Coinbase, technology startup Protocol Labs, as well as the Digital Currency Group and Polychain Capital, formed the “first” lobbying group representing the blockchain industry in Washington D.C. The Blockchain Association will purportedly represent entrepreneurs and investors who are engaged in blockchain-based projects.Recently, Rep. Kevin McCarthy, the current Republican Minority Leader in the United States House of Representatives, said that blockchain can make the Congress a more efficient and transparent place. McCarthy stated:“Blockchain is changing and revolutionizing the security of the financial industry. Why would we wait around and why wouldn’t we institute blockchain on our own, to be able to check the technology but also the transparency of our own legislative process?”Read More

  • Bitcoin Magazine - 18 March 2019, 10:17 pm

    Last Friday, we discussed a macro resistance level bitcoin would likely test. The level was tested three times prior and immediately rejected. Now, for the fourth time, we find ourselves situated above the level as we wait to see if our support holds:Figure 1: BTC-USD, Daily Candles, Fourth Test of Macro ResistanceThe first three attempts to hold support above the black, broken resistance have been stifled with relatively high amounts of volume. However, something to note is that the three rejections of the overhead resistance have become weaker and weaker. Now, on our fourth attempt, we are doing so in a very meandering/drifting manner. Typically, impulsive moves (like the last three attempts) react with impulsive moves in response to the strong move into the level. Grinding moves, however, (like the fourth attempt we are currently experiencing) are often tactics used to trap early shorters and not allow them an opportunity to exit. This sort of position stacking often leads to a “short squeeze.”A short squeeze occurs when the market stacks a large amount of people trapped in a position without an opportunity to exit. As the market drifts upward, more and more people continue to short the market expecting a pullback. And, in some cases, the market continues to drift upward, causing these short positions to go deeper and deeper into a losing position.Ultimately, these positions hit a breaking point where they will either be stopped out or force-liquidated, causing a large number of market buy orders to hit the market all at the same time. Right now, we have yet to experience the short squeeze, but we are laying the foundation to create a lot of trapped short positions in a relatively narrow price band:Figure 2: BTC-USD, Daily Candles, Upward Drift on Fourth AttemptThis upward drift has been persistent as we just ground right through the black resistance shown above. An upward grind like this can often be indicative of bearish exhaustion — especially when we have been strongly rejected several times before. At this level, it seems supply has been exhausted, and we will likely see a retest of the red zone shown below:Figure 3: BTC-USD, Daily Candles, Macro Resistance ZoneThe red zone represents the maximum extent the market has been willing to extend itself prior to being rejected. When the market develops well-defined zones of resistance, it also develops, as a consequence, a tight band of logical stop losses that can be used to fuel either a bullish or bearish rally, depending on the context.It seems logical that we will revisit this level whether the next major macro move is upward or downward. If we move upward, break new highs and fail to maintain new highs, that can be a bearish signal that large institutions are still unloading their supply and we are ready for a strong reversal.However, if we visit this zone and continue to grind upward, that could lead to a very powerful breakout of the level. Almost everyone who shorted over the last three…Read More

  • Bitcoin Magazine - 18 March 2019, 8:06 pm

    “The biggest problem I could think of was distribution. How do you share and educate both consumers and merchants on the power of bitcoin? I learned how much consumers loved earning and why merchants make decisions to adopt new technology.”Given his experience as an e-commerce professional, Alex Adelman, co-founder and CEO of Lolli, should know. After graduating from the University of North Carolina at Chapel Hill in 2011, the entrepreneur started Cosmic, an e-commerce gateway “with the idea to democratize commerce, allowing anyone to buy anything anywhere,” he told Bitcoin Magazine. The company, after an initial acquisition by PopSugar Inc., would end up in the hands of e-commerce cashback giant Ebates, and Adelman and his CTO, Matt Senter, would stay on staff after the buyout.Now, the duo are taking their experience working at Ebates and their original dream to “democratize commerce” to a new network of technology and clientele: Bitcoin.From Cash Back to Sats BackWhile working at Ebates, Adelman told us that he learned "why people buy, how people use cashback programs" — the hows and whys that would eventually lay the foundation for building Lolli's bitcoin-back platform.From craft beer memberships to VPNs to clothing, you can shop for just about anything on Lolli, though Adelman says travel is the most popular category (this is perhaps due to the fact that most airline booking sites, like CheapOAir, give a flat rate in bitcoin back rather than a percentage).Like Ebates’ own model, Lolli’s is simple and enticing: Shop online with Lolli’s participating retailers and earn a variable amount of bitcoin back as a reward. Launched just six months ago, the platform already has 10,000 active users, Adelman told Bitcoin Magazine, and it’s struck up partnerships with retail and online service leaders like Walmart, Overstock and These are just a few names out of the 500 partners Lolli has brought to the platform as it continues to sprout and grow.The seeds for the company were sown over five years ago when Adelman was on a trip to New York while he was still building Cosmic. He was couch surfing at the time while navigating the choppy waters of New York’s sea of industry, attempting to form partnerships and secure capital for his first startup.Adelman said he doesn't like the "Hollywood-ization" of those moments when the entrepreneurial light bulb clicks on and a business idea shines forth. But he also said that, if he could pick a moment when the initial spark for Lolli's conceptualization was kindled, it was one fateful night at a New York bar when he met the soon-to-be co-founder of Blockstack, Ryan Shea."A couple of years into [Cosmic], we learned about bitcoin. On a trip to New York, I bumped into Ryan Shea randomly through a friend of a friend at a bar, and he had just learned about bitcoin and he talked my ear off for like three hours. And everything he said resonated with me,” Adelman said."Everyone has that friend or that moment. I was obsessed.…Read More

  • Bitcoin Magazine - 15 March 2019, 10:56 pm

    Bitcoin remains in its tightly coiled range as the market continues its sideways trend for the third week in a row. While macro support has been tested three times recently, we have yet to test the overhanging macro resistance:Figure 1: BTC-USD, Daily Candles, Narrow RangeThe blue zone outlined above shows a very strong zone of support that, over the last few weeks, has seen three strong tests and has led to a slowly upward-drifting market consolidation. Since re-establishing support, the market has yet to see a meaningful retest of the overhead resistance outlined above in the red dashed and solid lines. The immediate resistance sitting overhead has, historically, been a highly volatile period where supply has manifested and stifled any bullish pressure:Figure 2: BTC-USD, Daily Candles, Three RejectionsThe black level outlined above represents the preliminary level that the market had tested prior to shoving to the red macro resistance levels. In Figure 2, we can see three clear tests followed immediately by three rejections. And now, after finding support on a major, macro level (the blue zone), we seem to be meandering upward into the immediate overhead black resistance.This current move is considerably different from the prior moves. The three prior tests occurred very violently and were matched with overwhelmingly violent selling responses. Our fourth test, however, has been a slow, persistent grind. Upward drifts like this are often signs of weakening supply and, consequently, a weakening resistance level.While it is still early to tell and we have yet to actually establish support on this level, the early signs of bearish exhaustion are starting to surface as we make our way upward. If we manage to test and find support on the black level, it seems logical that the next step would be to test the level in the low $4,000s that has been rejected so many times previously.Because we are stuck in the middle of a range, the market is pseudo-agnostic in terms of its market bias. It’s a bit of a no-man’s-land, so to speak. If we do see a rejection of our overhead level, we can fully expect a retest of the macro, blue support zone shown above. A failure to hold the blue zone would undoubtedly yield a test of our macro lows in the low $3,000s.We need to see a bullish close either above our current resistance or below our current macro support before any meaningful market movement is realized. Until then, it is just chop-city as we ping-pong back and forth between the upper and lower boundaries of our range.Summary:Bitcoin has continued to consolidate within its narrow range.The consolidation has an upward tilt to it that is causing us to slowly grind through a macro resistance level that has seen three strong rejections over the last three months.If we fail to break the overhead resistance and find support, we can expect a macro retest of the support level in the mid $3,000s. However, if we break out and find support, we can expect to…Read More

  • Bitcoin Magazine - 15 March 2019, 10:00 pm

    The Chicago Board Options Exchange (Cboe) announced that it will not list upcoming Cboe Bitcoin (“XBT”) futures contracts for trading in March 2019.The Cboe Futures Exchange said that the company is “assessing its approach with respect to how it plans to continue to offer digital asset derivatives for trading,” stating that it has no intention to list additional contracts for trading relating to the cryptocurrency.Though it is not confirmed, the reason behind Cboe’s futures closing might be due to its underperformance in comparison to CME’s futures contracts.“The Cboe contracts weren’t delivering a lot of volumes anyway. The dominant player on Wall Street remains the CME Group, whose Bitcoin futures remain in play,” Mati Greenspan, senior market analyst at eToro, told Bitcoin Magazine.The Chicago Board Options Exchange first listed its Bitcoin futures on December 10, 2017, preceding the listing of the Chicago Mercantile Exchange’s futures on December 17 of the same year. The two contracts went live shortly before the price of bitcoin began to dip from its all-time high of over $19,000.After listing its Bitcoin futures, Cboe filed multiple times with the U.S. Securities and Exchange Commission (SEC) for the approval of several Bitcoin ETFs, none of which have been approved.Critics of the Cboe futures, which were cash-settled contracts (no physical delivery of bitcoin), claimed that the financial activity that these types of contracts created had a negative impact on Bitcoin because they did not involve the movement and transfer of physical bitcoins on-chain, therefore suppressing its price.“They are both cash settled, meaning that two players trade against each other based on the price, and the loser forks over USD to the winner, so bitcoin is never moved by this market,” said Greenspan This article originally appeared on Bitcoin Magazine.Read More

  • Bitcoin Magazine - 15 March 2019, 7:01 pm

    The Tokyo District Court has found Mark Karpeles, the former head of now-defunct Bitcoin exchange platform Mt. Gox, guilty of record tampering but innocent on other charges related to embezzlement and breach of trust.Per reports in the Wall Street Journal, the court's verdict is a massive blow to Japanese prosecutors who have maintained their stance that Karpeles was guilty of embezzlement and breach of trust at Mt. Gox.The sentence, which was carried out on March 15, will see him serve a suspended sentence of two-and-half years in prison. He can skip jail altogether if he stays on his best behavior.While prosecutors pushed for a 10-year prison sentence, the court rebuffed some aspects of their claims and handed down a more lenient sentence.How Things Went Sideways for KarpelesKarpeles was the head of Mt. Gox when the firm applied for bankruptcy protection in 2014, following a security breach, where 850,000 Bitcoin (BTC), worth about 48 billion Yen ($430 million) at the time, was stolen from the exchange’s vaults.He was subsequently arrested in 2015, following an accusation that he embezzled 341 million Yen (about $3 million) from the accounts of customers.Per the allegations, he was alleged to have transferred the money from the accounts of the company’s customers directly into his own, using the funds to bankroll a lavish lifestyle.The transfers were made with the use of his personal computer, then he went a step further, covering his tracks by falsifying the company’s records.Mt. Gox’s Poor Accounting System Might Have Saved HimThe falsification of records was a major bone of contention for the court. In its ruling, the court pointed out that by falisfying records, Karpeles acted beyond the limits of his authority and against the general interests of the company.Prosecutors took issue with Karpeles' decision to use a section of the supposedly embezzled funds to purchase a business that deals in 3D printers. However, the court pointed out that the acquisition could be viewed as a potential asset for the company and thus, it was seen as reasonable.The court also pointed out that Mt. Gox lacked an efficient accounting system for when company executives borrowed money from the company, claiming that this made it impossible to determine whether the supposed funds Karpeles was said to have embezzled were from the company’s clients.In his remarks, Presiding Judge Tomoyuki Nakayama stated that a data manipulation of this magnitude eroded the credibility of crypto exchanges. Pointing out Karpeles’ position and IT expertise, the judge asserted that there is no justification for such an abuse of information.Karpeles Isn’t Going to Jail, But There’s Still Trouble Brewing for HimWhile Karpeles seems to have scored a win here, things could still go sour for him.Earlier this week, a court in Illinois ruled against his attempt to dismiss a class action lawsuit against him and the exchange.The suit, which was brought up by some victims of the exchange’s hack, was upheld by Judge Gary Feinerman because it was filed within the appropriate jurisdiction; even though the exchange was based…Read More

  • Bitcoin Magazine - 14 March 2019, 10:08 pm

    On March 9–10, 2019, the Massachusetts Institute of Technology hosted a two-day event, the MIT Bitcoin Expo 2019. Put together by the student-organized MIT Bitcoin Club, the conference welcomed more than just Bitcoin voices from every corner of the industry. One of those voices was that of U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce.Peirce sat down with Gary Gensler, ex-chairman of the Commodity Futures Trading Commission, senior lecturer at the MIT Sloan School of Management and senior advisor to the director of the MIT Media Lab, to discuss the progress of the SEC’s efforts to regulate the cryptocurrency industry. Notably, Gensler and Peirce launched into a discussion on what regulators can do better to protect investors from fraud and malicious actors.Before the debate began, both Gensler and Peirce expressed their appreciation for the emerging technology. “It’s a new way to have tamper resistant data amongst the consensus of multiple parties,” Gensler said. “My research is mostly around the business of blockchain technology and … trying to find where are the real use cases where traditional data structures don’t work as well.”Peirce expressed her own support for the space in relation to the SEC’s ongoing efforts to properly regulate it. “We have rules on the books that we have to enforce, but on the other hand, we don’t want to stop people from doing things that are going to make society a better place to live, that are going to make people’s lives easier, and enable people to interact in ways that they have not been able to in the past.”Later in the presentation, the two veteran regulators went on to discuss what the government can do to protect investors by possibly regulatinged cryptocurrency exchanges.Gensler believes that “exchanges are the gateway to get good public policy, particularly around AML laws, but also around investor protection.” He continued, “In essence, that there’s not a manipulated market with frontrunning and manipulation with the order books and the like.”The discourse was ongoing, and the most significant takeaway was that regulators like Peirce and the SEC acknowledge that, again, perhaps the current system of rules don’t apply perfectly. How could securities-based regulations be placed on all cryptocurrencies, even those that are officially defined as not securities?The SEC, according to Peirce, is working on what may be an alternative set of rules for exchanges that do not violate the rules of listing unregistered securities. Bitcoin, which is not a security, falls neatly into this alternative rule set. And, though it is currently unclear what the exact precedents will be, Peirce’s thoughts around the subject at MIT’s latest Bitcoin Expo were nothing short of encouraging for Bitcoin’s regulatory future.“People regulate each other in their interactions with one another, and that’s sort of the whole purpose of the Bitcoin idea … that it would be this community that would be able to regulate itself. So as problems arise, people in the community are thinking about how to deal with those problems.“I think these markets could regulate…Read More