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Bitcoin Lobbyist, ‘Dr. Doom’ to Square Off Next Week in Senate Blockchain Hearing

The U.S. senate Committee on Banking, Housing, and Urban Affairs is set to have a full committee hearing on Oct. 11 entitled “Exploring the Cryptocurrency and blockchain Ecosystem.”


At the upcoming hearing, the two witnesses currently scheduled are Coin Center Director of Research Peter Van Valkenburgh, and New York University Professor Nouriel Roubini.




Roubini, a noted economist, is well-known for his disdain towards cryptocurrency and blockchain, and for the often colorful manner by which he expresses his opinions.


Dr. Doom: Bitcoin is a Speculative Bubble

Roubini currently serves as a professor at New York University’s Stern School of Business.


He gained the moniker of “Dr. Doom” while predicting the 2008 financial crisis before it started. He is now one of the globe’s most respected economists.


He has long been an adamant basher of bitcoin, remarking in November of last year that the popular cryptocurrency is not a good way to store capital or a serious payment method.


Dr. Doom added to his pessimism about the virtual currency in May, remarking that “there is no decentralization, it’s just bulls–t” at the yearly Milken Institute conference.




He also launched an assault on blockchain technology, referring it to nothing more than a “glorified Excel spreadsheet.” Roubini remained resolute in his beliefs even after being challenged by other members of a cryptocurrency panel during the conference.


In July, Roubini maintained bitcoin was not a currency since it is not a stable store of value, a unit of account, nor a means of payment.


Remaining Resolute

Roubini, who has previously called bitcoin enthusiasts “Hodl nuts” and “cyber terrorists,” has also not been shy about sharing thoughts on smart contracts.


In June, he tweeted out that smart contracts are “not contracts as no court can enforce them,” writing that “the only courts in crypto land are the crypto developers’ kangaroo courts.”


"Smart Contracts" are neither smart nor contracts: they are extremely buggy -100 bugs per 1000 lines of code – & they are not contracts as no court can enforce them. The only courts in crypto land are the crypto developers' kangaroo courts who randomly decide when to fork or not


— Nouriel Roubini (@Nouriel) June 1, 2018


Many fired back against Roubini’s comments, but bitcoin developer Jimmy Song made a remark that actually seemed to paint him as more of an ally towards Roubini’s position.

According to Song:


“The dirty secret of smart contracts is that they’re of very limited usefulness and extremely hard to secure. More limitation is required here, not more ways to screw up. The hype and the engineering reality are extremely divergent.”


Notably, a hearing by the Committee in February concerning digital currencies featured comments by SEC Chairman Jay Clayton. At the time, Clayton remarked on how he might ask for additional crypto-related legislation down the road. Aside from Clayton, U.S. Commodity Futures Trading Commission Chairman J. Christopher Giancarlo also gave his remarks as a congressional witness.

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Winklevoss’ Gemini Now Provides Insurance for Customers’ Cryptocurrencies

Gemini announced during the week in a press release that the exchange has partnered with leading insurers to provide coverage on custodial digital assets.


Effective since October 1, 2018, insurance coverage is provided on digital assets held in Gemini’s custodial service. Aon, a leading global professional services firm providing a broad range of risk, retirement and health solution, has arranged the partnerships “through a global consortium of industry-leading insurers.”


Yusuf Hussain, Gemini’s Head of Risk, stated:


Consumers are looking for the same levels of insured protection they’re used to being afforded by traditional financial institutions. Educating our insurers not only allows us to provide such protections to our customers, but it also sets the expectation for consumer protection across the crypto industry.


Gemini has generated a lot of attention recently with the launch of new products and services. As CCN reported, the company launched a new stablecoin (GUSD) touted as more transparent and auditable than current coins. Additionally, the Gemini’s Winklevoss twins are very active in bringing cryptocurrencies to Nasdaq and educating Wall Street.


A Record for Adding Legitimacy to Cryptocurrencies

The new addition of insurance-backed custodianship marks a clear trend that Gemini focuses on adding services that legitimize the cryptocurrency trading industry. Most of Gemini’s developments bring features that are consistent with traditional financial institutions.


While the security behind cryptocurrency custodianship has firmed up greatly, such as multi-signature features, exchanges still want to firm up doubt with insurance for digital assets still highly sought after when exchange hacks are regular news. And as CCN reported, insurance firms could win big, and some are launching with specific cryptocurrency packages.


As the Gemini blog update states,


This furthers our mission to build the future of money by bolstering our commitment to providing you with a safe and secure platform to buy, sell, and store your digital assets. This new coverage complements existing FDIC “pass through” deposit insurance that your fiat funds (U.S. dollars) are eligible for.

As the red carpet is unfolding for institutional investors, despite critics who say this could be damaging to the principal of peer-to-peer money with decentralized control, exchanges want to leave no room for uncertainty for theft and regulation infractions.


Making a Case to Ease Insurers’ Fears

Though some firms have dove into the digital asset space, others have been leery to join because of huge hacks and shady internal businesses practices at cryptocurrency exchanges.


However, the Winklevoss twins were able to ease firms’ fears. According to Gemini’s update: “…we were able to successfully demonstrate to insurers that Gemini, a New York trust company, is indeed a safe and secure exchange and custodian where customers can buy, sell, and store digital assets in a regulated, secure, and compliant manner.”

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Will Yale’s Investment in Crypto Lead to More Institutional Investors?

This week, CCN reported that Yale, the prestigious Connecticut-based academic institution, has invested in a $400 million crypto fund operated by veterans in the digital asset and finance space.


Coinbase Inc. co-founder Fred Ehrsam, former Sequoia Capital partner Matt Huang, and billion dollar crypto hedge fund Pantera Capital ex-employee Charles Noyes reportedly launched a new cryptocurrency hedge fund called Paradigm after raising more than $400 million from various investors.




The $30 billion endowment in Yale is led by David Swensen, who invested an undisclosed amount in Paradigm, following the establishment of the institution’s vision to allocate 60 percent of its assets in alternative assets by the end of 2019, like crypto.


Why is Yale’s Move to Crypto Significant?

Yale and Swensen operate one of the largest college endowments in the global market. For three decades, the Yale endowment has outperformed every academic institution within the US, allowing Swensen to beCOME the most-watched and influential figure in the market of institutional investors.


In June, billionaire investor told Erik Schatzker at the Bloomberg Invest Summit in New York that the entrance of a major institutional investor into the crypto market will lead to other major firms accumulating cryptocurrencies like Bitcoin and Ethereum at a large scale.




“It won’t go there ($20 trillion) right away. What is going to happen is, one of these intrepid pension funds, somebody who is a market leader, is going to say, you know what? We’ve got custody, Goldman Sachs is involved, Bloomberg has an index I can track my performance against, and they’re going to buy. And all of the sudden, the second guy buys. The same FOMO that you saw in retail [will be demonstrated by institutional investors],” explained Novogratz.


Critics of the market have said that the investment of Yale in Paradigm is not as significant as a direct investment in crypto through custodian solutions like BitGo, Coinbase, and potentially, Goldman Sachs, Citigroup, and Morgan Sachs.


However, Paradigm is not a fund with a wide scope of interest. It is a cryptocurrency hedge fund found and operated by the industry’s veterans, and an investment in a crypto-only fund portrays the interest of Swensen in cryptocurrencies as an alternative asset.




The lack of correlation between major digital assets and the broader financial market allow cryptocurrencies to operate as robust and reliable stores of value, especially in a time of economic uncertainty.


First Major Institutional Investor Happens to be the Biggest

Yale is the first major institutional investor to invest in the crypto market through its main $30 billion endowment. The first large institutional investor to publicly invest in the crypto market through a hedge fund happened to be the biggest academic institution in the US alongside Harvard and possibly in the world.


If the entrance of Yale into the crypto market triggers FOMO amongst institutional investors, in the mid-term, the cryptocurrency market will see a rapid improvement in valuation and market development.


Some reports have suggested that a large number of institutional investors are already involved in the market through over-the-counter (OTC) markets, given the increasing volume of OTC markets in the US and Asia operated by firms like DRW.

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Cryptocurrency Exchange Poloniex to Yank Margin Trading, Lending for U.S. Customers

Poloniex, the exchange Circle has been working to revive since acquiring it in February, announced in a blog that it will eliminate its margin and lending products for U.S. customers by year’s end and delist three altcoins. The company noted it is removing the margin and lending products in the U.S. to ensure the exchange complies with regulatory requirements, although it did not specify what requirements.


As of Oct. 10 at 12:00 ET, the exchange will delist GNO (Gnosis), AMP (Synereo) and EXP (Expanse). Customers will be able to close out all trades and withdraw balances for these assets up until Nov. 9 at 12:00 ET. Market caps on Oct. 4 were $23,992,956 for Gnosis, $,137,016 for Synereo and $3,125,636 for Expanse, according to


Customers Urged To Withdraw Funds

After Nov. 9 at 12:00, Poloniex will not be able to process withdrawals of affected assets. Holders of the affected assets will have 30 days to withdraw funds. The deadlines could be extended in the event that wallet availability gets interrupted. Contract holders will be notified of such an event via email.


Poloniex will secure delisted funds in cold storage in the event that customers cannot make withdrawals due to reasons beyond its control, such as a network going offline. The funds will be secured for a “reasonable” period so customers can withdraw funds when the network becomes operational.




Poloniex did not announce a final date for removing its margin and lending products for U.S. customers, but said it will provide customers seven days advance notice before removing a market.


Existing loans will remain open and interest will accrue for the previously specified duration.


Also read: Circle’s Poloniex sees 190% jump in crypto trading volume, overtakes Bittrex


Circle Seeks to Revive Poloniex

Circle, which acquired Poloniex in February for more than $400 million, has been working to revive the exchange which some considered controversial due to its stagnation and being surpassed by other exchanges. There were also complaints about Poloniex’s customer service posted on Reddit prior to the acquisition.

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Bitcoin Price Remains Stable Below $6,600, What’s Next for Crypto Market?

For over a week, Bitcoin has remained relatively stable in the $6,400 to $6,600 range, struggling to sustain its daily trading volume across major crypto exchanges.


Within the past 48 hours, the volume of Bitcoin has declined from $4 billion to $3.2 billion on Coinmarketcap and from $2.6 billion to $2 billion on, the cryptocurrency market data provider of popular digital asset exchange ShapeShift.




Overall, Bitcoin has lost around 20 to 30 percent of its volume in the past two days, which has prevented the cryptocurrency market from initiating a large movement on the upside.


Bear Bias But Breakout Should be Considered

Given the low volume of Bitcoin and the weakening $6,500 support, in the short-term, it is highly likely for BTC to record a minor decline in value based on technical indicators and its price trend since mid-September.


However, the stability of Bitcoin and the unpredictable nature of the digital asset leaves a breakout of the $6,800 resistance level still a possibility.




Some traders in the cryptocurrency community have started to place long-term long positions. But, as widely recognized technical analyst CryptoYoda explained, it is still risky at this phase of the market to enter a long position.


“Early entry long BTC in anticipation of trendline break and leaving $6,000 area for good as support has proven to be respected. Two higher lows, proximity of important trendline and triggered bullish outside bar in favor of positive advance. Risky trade as early, worth the risk in my opinion,” he said.


Don Alt, another prominent cryptocurrency trader, emphasized that the market still remains biased to bears, but the possibility of a breakout cannot be dismissed. He noted:


“Right at both daily and H4 resistance. That said we did nuke some good levels & are holding strong so far. Invalidation of the bear case is a 4H close through resistance. Until then I favor the bears over the bulls.”




Although the volume of BTC has declined substantially in a short period of time, historically, BTC has tended to see a drop in volume and months of stability in a low price range prior to initiating a large rally, as seen in 2012, 2014, and 2016.


As of current, the price trend of Bitcoin is not favorable for traders looking to enter short-term long contracts. But, in consideration of the positive developments the cryptocurrency industry has demonstrated in the past three months, bulls should still have a positive outlook on the mid-term trend of the market.


Stability Expected

In August, several analysts predicted the price of Bitcoin to achieve $8,000 to $9,000 by the end of October. With Bakkt, Coinbase Custody and major financial institutions serving investors in the market, traders remain confident in the next rally of leading cryptocurrencies.


If the volume of the market does not recover however in the next 24 to 48 hours, stability in the upcoming months should be expected.




Featured Image from Shutterstock. Charts from TradingView.

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Seoul Mayor Announces $53.39 Million Fund for Blockchain Districts

A South Koran politician has committed a $53.39 million fund to develop blockchain regions in Seoul, local media reported.


Park Won-soon, who is the mayor of the South Korean capital city, said their government would create two business complexes to settle 200 blockchain-related companies by 2021. The districts would also serve the purpose of training 730 experts in the field over the course of the next five years.




“There’s no doubt blockchain is the core technology of the fourth industrial revolution, which will shape the future IT industry. I will make efforts to help Seoul become the center of a blockchain industry ecosystem,” Park said during his 10-day diplomatic visit to Switzerland, Estonia, and Spain. The minister also signed a memorandum of understanding in Zurich to lay the foundation of their blockchain tie-ups.


Park, who has been a strong advocate of the digital ledger technology for public and government services, also visited Zug, Switzerland’s crypto valley, with his 30-person delegation. He studied the city’s business atmosphere and structure to understand the potential of his blockchain hub plans for Seoul, as he comes closer to launch a state-backed cryptocurrency, tentatively called S-Coin.


Seoul has committed a 100 billion-won public-private fund – almost $88.56 million – to invest in local startups, research centers, and to train workers in the field of the blockchain. The city’s efforts in digital ledger will focus on offering social services to citizens. S-Coin is a result of the government’s plans to fund public welfare programs or compensate private contractors. A blockchain-based asset should enable the Seoul municipalities to put expenditure details in public.




The city is planning to insert close to $12 million into the proposed fund.


Samsung Partnership

In 2017, the Seoul government, under the mayorship of Park, entered into a partnership  with Samsung SDS to create a blockchain development framework for the city. The company later started testing its proprietary blockchain protocol, the NexLedger, with a purpose to integrate it into the Seoul’s entire municipal cooperations by 2022. Just recently, the Municipality of Seoul and Samsung SDS announced that would build the world’s first exports customs clearance on the top of the blockchain. They had already tested the solution on a Korea-China shipment a year ago.


The South Koran government is also utilizing NexLedger in digital identity storage and verification, online payment solutions, and digital record storage systems. The local enterprises are also integrating the NexLedger range of solutions to innovate their IT solutions with blockchain.

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Malta Financial Regulator Looks to Bolster Cryptocurrency Industry

Having earned the reputation of “Blockchain Island”, Malta is taking steps to preserve the industry by investing heavily in supervisory technology in order to protect the blockchain industry.


Such investments according to authorities are aimed at ensuring that the inherent risks associated with virtual currencies are kept at a minimal level in Malta.


There Is Work To Do

Having shown a friendly appeal to the blockchain industry and already seeing an influx of activities into the Island, the Malta Financial Services Authority (MFSA) believes that it has its work cut out already. After being heavily criticized over the years for failing to protect victims of the collapsed La Valette Property Funds, the institution appears unwilling to permit any loopholes this time around.


Christopher Buttigieg, head of the Malta Financial Services Authority’s securities and markets supervision unit noted the huge risks involved in environments with large flows of money. Therefore, the establishment is working in advance to block any vulnerability to criminals, money launderers, terrorists, among other bad actors.




The limited number of nations that are open to blockchain and cryptocurrency activities in relation to the expanding nature of the industry implies that these nations will be experiencing a high density influx of activities. Several startups, ICOs and even conferences are moving their activities to nations like Malta.


Working Ahead

Apart from the direct monetary risks involved, the need to ascertain the required standards for projects that seek to host their base in such nations will go a long way in defining the society.


Therefore, the extent of MFSA’s activities in achieving a tight system for a sanitized ecosystem cannot be overemphasized.


Malta recently enacted three pieces of legislation covering blockchain and cryptocurrencies. Hence, the efforts of MFSA to tighten the regulatory system ahead of the industry’s expected expansion.




Apart from the La Valette Property Funds scenario, the regulatory institution has also undergone heavy criticism following alleged breaches at Pilatus Bank and other financial institutions. Hence, it is facing increased pressure, along with the Financial Intelligence Analysis Unit, from the European Banking Authority, the European Parliament and the European Central Bank.


These are some of the scenarios that Buttigieg noted that his institution has learned from and would work towards avoiding any chance of reoccurrence. He also explains that MFSA has gone beyond other regulators, and that Malta has already adopted the Fifth Anti-Money Laundering Directive, well before the 2019 deadline.

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Philippines Deports Mastermind of $33 Million Bitcoin Pyramid Scheme

The Bureau of Immigration of the Philippines had ordered the deportation of a South Korean national who is wanted in South Korea over his involvement in a bitcoin pyramid scheme.


Identified as Go Yongsung, the South Korean was arrested in the city of Las Pinas. According to Jaime Morente, a Bureau of Immigration Commissioner, the arrest was conducted by the Fugitive Search Unit of the government agency. A warrant had already been issued by a district court in South Korea for his arrest prior to his capture, according to Manila Bulletin.




Per documents obtained from the authorities, Go and other accomplices defrauded South Koreans of over US$33 million by promising huge returns if they invested in bitcoin between December 2015 and June 2016. According to the authorities Go, who is 48, used a firm which was operating in Pasay City as a front in his fraudulent scheme.


Crackdown on Fugitives of Justice

After the arrest, Morente warned that the bureau would not relent in its efforts to ensure criminals faced justice regardless of which jurisdiction they committed their crimes in.


“We reiterate our warning to all foreign criminals who are hiding in the country. The long arm of the law will eventually catch you and we will send you back to your homelands so you will be meted punishment for your crimes,” said Morente.




Besides the South Korean national, the Bureau of Immigration of the Philippines also nabbed another fugitive of justice, a Chinese national. Named Lian Lilong, the Chinese national who is also set to be deported, was, however, on the run for unspecified economic crimes.


Unsustainable Guaranteed Returns

As CCN has previously reported, a couple of bitcoin pyramid schemes have been unearthed in South Korea in the past few years. In April this year, for instance, two unnamed individuals were fined millions of dollars by a court in South Korea for operating such a scheme and generating approximately US$24 million in the process from unsuspecting investors.


Last year in November, seven South Koreans were also arrested in Jeonbuk Province for a running a Ponzi scheme which generated approximately US$38 million over a period of under 24 months. Just like with most bitcoin  pyramid schemes the world over, the scam that the seven were operating was promising investors guaranteed returns of up to 200%.


The scheme had started operations in January 2016 and mainly targeted middle-aged investors. According to police, nearly 4,000 investors lost their money to the fraudsters.

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Bitcoin Market Has ‘Run Out of Juice’: Cryptocurrency Analyst

Element Group, a cryptocurrency economics and digital assets solutions analyst, published a report explaining that the SEC’s delay in approving bitcoin ETF proposals is the primary reason why the market has become so boring in recent weeks.


Crypto Market Has Become Boring


BTC/USD | Bitfinex

“One can argue that the depressed volatility patterns we’re seeing with bitcoin is the market slowly adopting bitcoin as a [Store of Value] SoV,”  wrote Element analysts, Thejas Nalval and Kevin Luon, in the report published last week. However, they added that it seemed like an interesting yet premature theory.


Another unconvincing theory cited by the report was that BTC’s price discovery mechanism was becoming “more efficient.”




Bitcoin’s volatility index remained at 8.04 percent earlier in January, however, in the last 60 days, the figure dropped down to 2.71 percent. Hence, Nalval and Luon agreed that bitcoin “ran out of juice” heading into the fourth quarter.


The report also pointed out that BTC bucket shops, brokerage firms allowing people to place bets on the price illegally, are negatively impacting the market.


The Role of Bitcoin ETF Rejections

Bitcoin’s price is also dependent on the SEC’s approval or refusal of bitcoin ETF proposals. This year, ten ETFs were rejected by the SEC — the Winklevoss BTC ETF in July and the rest of the nine ETFs in August.


The only proposal that remains unanswered is the VanEck/SolidX bitcoin ETF. When the SEC delayed the decision in September, it caused a disturbance in the bitcoin market. However, the price stabilized once investors figured out that the decision could be positive in the future. The report noted that the pending decision has resulted in a dull market.




Interestingly, the SEC can extend the deadline of approving an ETF proposal filed on the federal register by a maximum of 240 days. This can happen if the agency decides to use all the extensions in the approval process.

On Aug. 8, the SEC postponed the decision by extending the 45-day time period. Back then, the agency wrote that the final decision would arrive on Sept. 30. Since the decision was extended on Sept. 20, analysts expect the SEC to utilize all the extensions. If this happens, the final decision will arrive in late February.


The VanEck/SolidX BTC ETF has garnered support from many investors. But, the report concluded that bitcoin users should be prepared for both the decisions because if the proposal is rejected, “it could be one or two more years before another ETF is up for approval again given the current state of the underlying markets and the SEC’s thinking.”

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Crypto Mining Giant Bitmain Acquires Bitcoin Cash Wallet

Open source browser-based cryptocurrency wallet Telescope has officially announced its acquisition by Bitmain Technologies Inc., the world’s largest crypto mining rig manufacturer, which also runs one of the world’s most extensive cryptocurrency mining pools. The move comes at an important time for Bitmain, which is increasing its involvement in the bitcoin cash space as it continues to reinvent itself as more than just an ASIC maker ahead of its planned mega-IPO in Hong Kong.


Telescope is a browser-embedded cryptocurrency wallet that currently allows users of Google Chrome and Mozilla Firefox to send and receive BCH through a browser extension. Set up earlier in 2018 by former IBM software engineer Aaron Angert, Telescope also offers support for BitPay and MoneyButton. While it is currently optimized for Chrome and Firefox, the plan is for the application to eventually offer full support for other leading browsers as the project grows.




Telescope transaction keys are saved in the application’s browser extension, and then transactions are signed by the user’s browser directly and sent to a BCH block explorer. Cross-browser private keys are encrypted via the blockchain, guaranteeing safe storage of user funds, just like standalone cryptocurrency wallets.


Speaking about Bitmain’s acquisition of Telescope, the company’s Lead Developer Aaron Angert said:


“I am extremely proud of what Telescope has been able to achieve so far and am excited for its future with the additional help and support of Bitmain. We are honored to be a part of the bitcoin cash community, as a vibrant collection of individuals contributing towards the development of blockchain technology and the cryptocurrency industry.”


Also reacting, Nishant Sharma, Head of International PR and Communications at Bitmain said:


“We are extremely proud of Telescope wallet and the simple but key innovation that the project brings to the bitcoin cash eco-system. Browser-embedded cryptocurrency wallets are a promising technology. The Telescope development team is doing some very interesting work and we look forward to working together with them on the Telescope project and future bitcoin cash projects.”


In August, CCN reported that Bitmain is sitting on bitcoin cash reserves worth nearly $600 million, or more than 5 percent of all the 17.3 million BCH in existence. The acquisition of Telescope comes as Bitmain’s latest bet on bitcoin cash after the company threw its weight behind the faction that turned into BCH during the bitterly-contested bitcoin fork in 2017.

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U.S. Investors Divided on Outlook for Cryptocurrency: Survey

Americans are split almost evenly on the topic of whether or not cryptocurrency represents a promising investment class with a bright future.


A new Clovr research report sampling over 1,000 American adults found that roughly even segments of the U.S. population have strongly positive and apprehensive, bordering on hostile, views toward crypto assets, even as the total percentage of the population that is aware of cryptocurrencies continues to grow steadily. The report gathered responses to a number of questions from 1,004 Americans aged between 18 and 80 via Amazon‘s Mechanical Turk platform. The average age of survey respondents was 36.05, with a standard deviation of 11.86 years.




The survey shows that crypto awareness is longer a small niche, with 76 percent of the people surveyed professing their knowledge about it, and a further 20 percent indicating that they “sort of” know what cryptocurrency is. While these figures look good, a cursory dive into the data shows that the 76 percent drops to 62 percent when asked if they would be comfortable to explain what cryptocurrency is to others.


According to the survey, 69.8 percent of people expressed uncertainty about the cryptocurrency market while 28.1 percent are hopeful about crypto adoption and positive movement in the market. While 31.5 percent are excited about its usage, another 32.9 percent are confused, which is an almost even split.



Source: Clovr

A possible reason for this could be the fact that many people first experienced cryptocurrency as a speculative asset during last year’s record-breaking bull run, which made some see crypto as a means to get rich quickly. The bear market of 2018 soon followed, however, and burnt many fair-weather investors, coloring its perception by the general public. This is also reflected in the reasons given for investing or not investing in cryptocurrency, with 51.6 percent of respondents saying they would invest because of the possibility of outsized investment returns and 58.1 percent saying they would not invest because the crypto asset class is too risky.


The report also shows that crypto investment still remains an overwhelmingly male-dominated activity, with 43 percent of surveyed men having invested in a cryptocurrency before, against 23 percent of women. Unsurprisingly, millennials also led the generational statistics of cryptocurrency investors, with 41 percent of surveyed millennials responding affirmatively to the question, compared to 24 percent of Gen X respondents and 18 percent of baby boomers.




The main takeaway from the survey is that the subject of cryptocurrencies is still one of uncertainty and ignorance among many Americans, with many people possessing little more than a superficial understanding of what cryptocurrencies are.

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Crypto Unicorn Circle to Acquire Equity Crowdfunding Platform, ‘Tokenize Everything’

One of the world’s most valuable cryptocurrency companies has acquired a crowdfunding platform as it seeks to fulfill its goal of overseeing the “tokenization of everything.”


Goldman-Backed Circle Acquires Crowdfunding Startup

Circle Internet Financial, a cryptocurrency unicorn with a $3 billion valuation, has inked a deal to acquire SeedInvest, an equity crowdfunding startup that helps privately-held small businesses raise capital from individual accredited and retail investors. The news was first reported by Bloomberg.


Speaking in an interview with the publication, Circle CEO Jeremy Allaire said that the Goldman Sachs-backed firm is eyeing this investment as a way to regularize crypto securities — often called security tokens — while also complying with Securities and Exchange Commission (SEC) regulations on securities offerings.




“This was a company who had been at the forefront of collaborating with government to figure out how to make it possible to innovate in the way people raise capital,” Allaire said of SeedInvest. “Crypto securities are going to become a major new category of securities that ultimately every business is going to adopt, just like every business has a website.”


“It’s not just ‘how do we let companies do ICOs?”’ he continued. “It’s ‘how do we support the tokenization of everything?”’


According to SeedInvest’s website, more than 150 startups have used the platform to raise $115 million from more than 200,000 investors. Though some offerings are restricted to accredited investors, retail investors can purchase shares in other companies with investments as small as $200, which the company says is 50 times lower than typical startup investments.




Terms of the deal were not disclosed, but Bloomberg’s report states that 30 SeedInvest employees will move into Circle’s New York office.


Tokenizing ‘Everything of Value’


Circle CEO Jeremy Allaire | Source: World Economic Forum/YouTube

When Circle acquired cryptocurrency exchange Poloniex in February, Allaire and fellow co-founder Sean Neville said that they envision the platform morphing into something far more robust than a standard-issue token exchange.


“We envision a robust multi-sided distributed marketplace that can host tokens which represent everything of value: physical goods, fundraising and equity, real estate, creative productions such as works of art, music and literature, service leases and time-based rentals, credit, futures, and more,” they wrote in a  statement.




Since then, Allaire has said that Circle is pursuing SEC registration as a licensed broker and trading venue and hopes to one day receive a federal banking license.


Circle is not alone in its quest to bring security tokens to the mass market. Crowdfunding platform Indiegogo has partnered with a broker-dealer to create a security token platform. The first asset listed on the platform is a cryptocurrency token that represents equity in a luxury resort in Aspen. Overstock subsidiary tZero is also building a security token exchange.

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14 Italian Banks Complete Interbank Transactions on R3 Blockchain Corda

A consortium of Italian banks has successfully completed the initial trial of a blockchain-based system aimed at enhancing interbank operations.


Known as the interbank Spunta Project, the 14 banks chose the Corda distributed ledger technology platform developed by the R3 blockchain consortium. The application was developed by NTT Data Italia while decentralized storage platform Sia provided the node infrastructure. During the trial phase which lasted for a period of 10 months, around 1.2 million transactions were processed,  according to Ansa.


Speed, Efficiency and Transparency

Some of the improvements expected to be made using the blockchain solution include boosting transparency, speeding up processing times and enhancing efficiency with regards to the exchange of information and verification of details. At the time when the trial was announced last year in December, the CEO of R3, David Rutter, indicated that these were the goals:


“Working with ABI Lab we are using Corda to automate the matching process, helping Italian banks avoid mismatches and improve efficiency and accuracy across the board. This PoC [proof of concept] will demonstrate how easy it is for banks to reduce their operational and back office costs, while saving time and communicating securely by utilising DLT.”




The Spunta Project is being operated by ABI Lab, the research and innovation center of the Associazione Bancaria Italiana (loose translation – Italian Banking Association) . In the next phase of the project, blockchain applications will be used by the banks in everyday transactions.


The 14 banks falling under the umbrella of the ABI include Italy’s second largest bank Intesa Sanpaolo, Credit Agricole (the ‘green bank’), Banco BPM, BNL (Gruppo BNP Paribas), Banca Mediolanum, Banca Monte dei Paschi di Siena, Banca Popolare di Sondrio, Banca Sella, CheBanca (Gruppo Mediobanca), Credito Emiliano, Credito Valtellinese, Iccrea Banca, Intesa Sanpaolo, Nexi Banca and Ubi.


Inter-Country Financial Transactions

Besides its use in interbank operations, the open source Corda platform has also been employed in cross-border payments, as previously reported by CCN. Last year in October, for instance, 22 member banks including Barclays, BBVA, Commerzbank, DNB, HSBC, ICBC, Intesa, KBC, KB Kookmin Bank, KEB Hana Bank, Natixis, Shinhan Bank, TD Bank, U.S. Bank and Woori Bank joined hands with R3 with a view of enabling international payments.


Rutter at the time hailed it as highly disruptive for organizations that do business across borders.




“International payments systems have struggled to keep pace with the explosion of global trade and the globalization of the world’s markets…” said Rutter. “This solution is a game-changer for any bank or company whose business relies on making or receiving cross-border payments.”

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An Early Employee Leaves Crypto Exchange Giant Coinbase.

Cryptocurrency exchange Coinbase said their fifth employee and head of its institutional platform group, Adam White, is departing the company.

The firm said yesterday that Jonathan Kellner, the ex-CEO of Insinet, would be taking over the bulk of White’s work. Kellner was recently hired as Coinbase’s managing director of its institutional business.

A company spokesperson noted how Coinbase was sad to see White leave, but expressed confidence in:

“That group’s ability to keep executing on the vision that he laid out to be the most trusted venue for institutional investors to trade cryptocurrencies.”

Before coming onto Coinbase back in 2013, White served in the U.S. Air Force and worked at Bain & Co.

According to Bloomberg, Coinbase CEO Brian Armstrong remarked in an email how “Adam helped us build our exchange business into the largest U.S.-based crypto-trading venue, and was integral to growing Coinbase’s global presence and scaling our culture to multiple offices”

The Coinbase Expansion Continues

The personnel move by Coinbase comes at an important time for the company. Recent activity seems to signify the California-based startup is angling to secure clients in the institutional world.

Just two days ago, the company announced that Chris Dodds, a Charles Schwab board of directors member, would be coming onto the Coinbase board.

Armstrong wrote on the Coinbase blog how the acquisition of Dodds would be an “Asset to the Coinbase leadership team as we focus on scaling our business.”

CCN reported in September how Coinbase agreed to team up with Circle and the Digital Currency Group to launch the Blockchain Association, a Washington D.C. lobbying group.

The idea is to encourage companies to work with policymakers on variety of issues, including taxation definitions, and anti-money-laundering (AML) and know-your-customer (KYC) regulations

Valuation Will Hit $8 Billion?

A U.K. hedge fund called Tiger Global is reportedly mulling over a $500 million dollar investment into Coinbase, potentially boosting the company’s value to near $8 billion.

The $8-billion-dollar figure is said to be the same valuation the company applied to itself when they purchased earlier in the year. Just last summer, Coinbase was seen as close to a $1.5-billion-dollar company. However, this valuation came before a sharp uptick in consumer interest into cryptocurrencies that lasted until the end of the year.

Business for Coinbase has waned somewhat due to turbulent market conditions in 2018.

But previous coverage from CCN noted how Armstrong and other company leaders remain resolute about a business strategy that is about opening up the global financial system, and not necessarily focused on short-term trade volume.

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Ethereum Constantinople Ropsten testnet launch delayed by 5 days.

The update needs to be updated, and the update's update needs to be tested before the update can update.

The upcoming Ethereum Constantinople Ropsten testnet launch has been delayed by five days to fix a vulnerability opened up by one of the updates.

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What's up?

"Via community decision, we've delayed the Ethereum Ropsten testnet Constantinople hard fork by 1 epoch to block #4230000 (+5 days) to allow clients to implement, test and release an update to CREATE2, countering a recently found EVM DoS attack vector," explained Ethereum team lead Péter Szilágyi on Twitter.

To unpack that in English:

The update has been delayed by five days while testnet participants implement a certain update. The update is for CREATE2, which is one of the five changes introduced in the upcoming test.

CREATE2 is mostly intended to lay the groundwork for further testing and updates by allowing people to run tests on hypothetical addresses that contain hypothetical code. You can probably see how that would be pretty useful for testing purposes.

But the update also opened up a potential vulnerability – the "EVM DoS attack vector" as Szilágyi called it.

ethereum cryptocurrency

The EVM is the Ethereum Virtual Machine. It's kind of like a... well... a virtual machine. It's basically the Ethereum world computer as you know it, including all the rules that make it safe to use, despite being accessible by anyone everywhere in the world. These rules include things like gas costs for transactions, restrictions around what kind of data is put onto the network and what exactly programs can do. So you don't want to break it.

According to Szilágyi, CREATE2 included an EVM DoS attack vector. One can infer that this means CREATE2 would have allowed someone to run certain transactions without needing to pay the requisite gas costs.

By being able to send transactions without needing to pay those gas costs, someone would be able to spam the network with countless transactions, clogging Ethereum up with the effect of slowing it down, or potentially overwhelming it. This is called a denial of service (DoS or DDoS) attack, or a spam attack. DoS attacks aren't a cryptpocurrency thing. Rather, they're just one of those common features of the Internet age.

So the Constantinople test update needs to be updated, and the update's update needs to be tested before the update can be updated. It's just business as usual.

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Venezuela Petro launches (again), is found to have plagiarised Dash.

The Petro was also meant to be listed on six major exchanges on 1 October. That evidently hasn't happened.

Venezuela's Petro cryptocurrency is officially launching, again, even as its whitepaper is found to have blatantly plagiarised the Dash whitepaper. The Petro is the culmination of Venezuela's efforts to crowdfund its own national currency, and its re-launch was publicised by Venezuela's president Maduro on Twitter.

The future is wild.


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Founded allegations

The plagiarism accusations are somewhat undeniable. The Dash whitepaper is open source, so there's no reason why the Petro whitepaper's authors can't use it anyway, but academic-wise it wasn't appropriately attributed.

The plagiarised part stands out from the whitepaper too, being the only part of the thing written in English. They didn't even bother translating it.

For unnecessary comparison, the Dash version can be found here.

It seems likely that other parts of the whitepaper were similarly nicked from elsewhere, but it's also worth noting that the Dash content might be similarly valid to the Petro. But by itself it would probably need tweaking, as the Petro is NEM-based while Dash has its own blockchain.

The re-launch, meanwhile, comes well after the original launch date of 20 August. At the time Venezuela's state media essentially announced that it was all live and official and working, but follow-ups have found the entire project, as well as the state departments that were supposed to be leading it, to be a mirage.

juicy crypto words

The project is ostensibly headed up by the Superintendence of Cryptoassets, but when Reuters journalists went to pay it a visit they found it to be seemingly nonexistent, without a physical presence in the Ministry of Finance. Its digital presence has similarly dried up.

Likewise, it's impossible to verify whether the Petro is actually backed by real oil reserves as claimed. Oil industry experts speaking to the same Reuters journalists were doubtful that the region said to be backing the Petro was able to accommodate the intended value of the token.

President Maduro's other bold claims haven't eventuated either. In an announcement published 1 October 2018 he said the Petro would be available on six major international exchanges that day, but this hasn't happened.

It's also highly unlikely that any major international cryptocurrency exchanges would touch the Petro with a ten foot digital pole, as its sale has been banned in the USA. Given the choice between accessing the American market, and being able to list the Petro, any exchange would naturally choose the former.

It might be a striking example of how quickly government authority can evaporate once it crosses borders, and how even a large nation can find itself relatively helpless in the face of sanctions and business realities.

Maduro also announced that the Petro would commence its public sale on 5 November, in exchange for Bolívares Soberanos – a newer version of the Bolivar that's shaved off a few zeroes. Previously he's claimed that Petro presales have raised US$5 billion, but this is just as doubtful and impossible to verify as most of the other claims.

The re-launched Petro has already started missing its 1 October deadlines. Whether it manages to hit any of its other stated objectives by the stated deadlines will be clear by the end of November.

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Bithumb to open decentralised exchange branch.

It might be partly to offer a more secure option after the recent hack, and partly to go more global.

Bithumb will be rolling out a decentralised exchange, Business Korea reports. Bithumb is one of the world's largest cryptocurrency exchanges by volume, and a heavy presence in the thriving South Korean crypto markets.

In rolling out a decentralised exchange alongside its centralised exchange system, it will be joining Binance which announced its own decentralised exchange plans in March.

It will also be joining Upbit's decentralised exchange variant, Allbit, which was South Korea's first decentralised exchange.

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The dex

Decentralised exchanges (DEXs) are quite a different animal to centralised exchanges.

Centralised exchanges are probably the ones most people are familiar with. These include Coinbase, Bitfinex, Kraken and many more. Here, users deposit funds into the exchange which takes custody of them on behalf of the user.

The advantages of centralised exchanges are that they allow fiat to crypto conversions, and typically have much deeper liquidity than decentralised exchanges. The exchange, as a company, can source liquidity from other third parties and manage the order books in more detail.

By contrast, decentralised exchanges are more like matchmakers, or bulletin boards, where buyers and sellers can post their orders and prices. The exchange itself doesn't hold any funds, it just serves as a venue for buyers and sellers to encounter each other in a safe environment that can support features like automated escrow and advanced trading features.

The advantages of decentralised exchanges are that they offer some additional security, because you don't have to entrust funds to the centralised exchange itself. Plus, truly decentralised exchanges can acquire some of the advantages of cryptocurrencies themselves, such as immutability and constancy. However, they tend to be complex and more susceptible to the same scaling issues as cryptocurrencies themselves.

In the relatively near future, experts are expecting decentralised exchanges and privacy-focused cryptocurrencies to be a potent combination, for better or worse.

Binance's decentralised exchange will be running on the exchange's own blockchain, while Bithumb's will be operated in conjunction with One Root, which already operates the Rootrex decentralised exchange.

juicy crypto words

Whether the Bithumb project will be truly decentralised might depend on where one wants to draw the line. It will still be operated by a Bithumb-affiliated company, which in itself might serve as a central point of failure. For example, by providing a physical address whose doors can be kicked in, and identifiable staff who might be coerced or bribed to tinker with trades on the platform.

"Bithumb DEX will be operated by its overseas subsidiary," Bithumb said. "The company is working together with RNT only in the decentralized exchange sector."

Centralised elements aside, it might still be an eminently sensible option for Bithumb. Firstly because a recent hack may have impacted confidence in the exchange's security, and highlighted the challenges associated with comprehensive cybersecurity. And secondly because Bithumb has yet to achieve significant traction beyond South Korea. A decentralised exchange might be a more competitive and versatile addition to the global market.

"Bithumb is one of the leading global exchanges in terms of transactions but it is true that most of its users are Korean," an unnamed crypto industry source said to Business Korea. "The latest decision seems to be the company’s strategy to compete with other leading exchanges in the global market by opening a decentralized exchange that receives attention in the global market."

That Bithumb does so much volume in Korea alone might be indicative of the incredible demand for cryptocurrency in the country, and how far the hype may have extended along the Korean peninsula last year.

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Russia used bitcoin to fund attacks on FIFA, chemical labs and anti-doping agencies.

Real life spy work turns out to be a lot like the movies, just with more bitcoin and pettier objectives.

Bitcoin is an investigator's best friend, as the Justice Department doubtless appreciated when bitcoin transactions presented key evidence that helped verify the Russian election hacks.

But it's not just election manipulation. A new indictment reveals that Russia's military intelligence agency, the KGB-successor GRU (Glavnoye Razvedyvatel'noye Upravleniye, or ???????? ????????????????? ??????????? if you're feeling Cyrillic), has used bitcoin to fund a widespread series of attacks in line with many of Russia's surprisingly petty international intelligence objectives, such as the theft and publication of athlete medical records in an attempt to accuse them of doping.

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Targets included anti-doping agencies and athletics centres, FIFA (the world football federation), the Organisation for the Prohibition of Chemical Weapons (OPCW), a Swiss chemical lab that analysed the chemical agents connected to a recent series of poisoning assassination attempts and others.

The group operated under the name Fancy Bears, which portrayed itself as an independent group of hackers but was, in fact, a team of GRU agents.


It may be worth noting the use of Anonymous iconography by the Fancy Bears here, in the context of the United States' "alt-right" political demographic, which would go on to become the backbone of pro-Trump efforts in the election. The alt-right movement is largely characterised by its "anti-political correctness" schtick, which is also a mainstay of many who would identify with the Anonymous group.

The GRU agents behind the Fancy Bears are found to have been working since at least 2014, but quite possibly long before that. Russia's cultivation of the USA's alt-right movement might have been going on for many years now.


The main method outlined in the indictment was for the Fancy Bears to lay down the groundwork by doing their homework and setting up fake websites designed to mimic the real equivalent. The examples given include westinqhousenuclear dot com (with a Q instead of a G) rather than (the real one) and variations of the real World Anti-Doping Agency (WADA) URL.

The same fake website method is still widely used by hackers, especially in the cryptocurrency world where fake domains can prompt an unwary user to hand over their login details.

juicy crypto words

Spearphishing was usually the go-to move, the indictment says. These are carefully crafted and precisely targeted phishing attacks, which are used to direct employees of the targeted institution to the fake website in the hope of them entering their real credentials. These could then be used by the hackers to gain access to the real website.

The success rate wasn't great, but sometimes one click was all that was needed. In an attack on WADA on 4 August 2016, spearphishing emails were sent to 11 WADA employees, claiming to be from the WADA CTO. Only four employees went on to open them and unknowingly hand over their login details.

A few days later another bout was sent, which claimed to be from a WADA IT manager with a prompt that users should "update their Cisco client". At least one employee was taken in by this second volley. These emails were often assembled very carefully, and sometimes days of research and drafting went into their creation. Spearphishing is very much a quality over quantity approach.

Spearphishing couldn't do it all though, and when that failed things got much more sophisticated. Now the team would travel around the world to the actual locations of the targets, often facilitated by Russian embassy officials in the destination country who would help them through airport security and similar. On-site they would hack into Wi-Fi networks at the site itself, supported by teams back in Russia as well as specialised malware and hacking tools created by GRU.

For example, the team made a trip to Rio de Janeiro in July 2016, during which they researched the Wi-Fi network and router security used by a hotel that would be hosting officials during the Olympics. In a follow-up trip the next month, they cracked the hotel Wi-Fi and used it to get the details of an Olympics official who logged into a WADA database from the hotel.

Another method was to breach someone's email through hotel Wi-Fi and then send an email from that person's account to pull off a more sophisticated spearfishing attack.

On one occasion, a Canadian Centre for Ethics in Sport (CCES) official found an email in their sent box that they didn't send. It included a malicious link, but was riddled with typos including a sign off that said: "Sent from my SamsunCopenhagen."


Once the desired information was stolen it would be changed if needed to suit the goals at hand, and then distributed.

One of the most typical methods was to reach out to reporters directly through the Fancy Bears Twitter account.

"The conspirators would actively solicit and promote media coverage so the stolen information would receive international attention," the indictment says. "This was done to further a narrative favourable to the Russian government and in order to amplify its impact."

It goes without saying, but might as well be said anyway, that the credulity and factual flexibility of some media outlets might have helped a great deal.

The big break

The big break might have come on 13 April 2018, when the GRU team was interrupted by the Dutch Defence Intelligence Service (MIVD) while trying to hack into the Organisation for the Prohibition of Chemical Weapons (OPCW) headquarters in The Hague.

They Fancy Bears fled, but left behind their equipment. This was used to draw a trail going back years. It didn't take much more investigation to find out that the hackers had entered the country with the assistance of an official from the Russian embassy.


Bitcoin was the cryptocurrency of choice, the indictment says. It was used to pay for various services such as the hosting fees for the fake websites. They got their hands on at least some of the bitcoin by mining, which might have presented a more anonymous option.

The bitcoin trail helps tie it all together because the same computers were being used to send various spearphishing emails and carry out other attacks, as well as to send bitcoin transactions.

Once again, the immutable and unerasable bitcoin transactions were a solid connection that helped tie the investigation together. As they say, bitcoin isn't anonymous.

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Two more games added to Enjin Multiverse.

Enjin Coin continues its mission to drive the blockchain gaming space towards new possibilities by signing up Vrainiac Studio’s Born to the Sky and Helihunter games.

If you haven’t caught wind of the Enjin Multiverse yet, it’s an intriguing new concept driven by the rise of blockchain gaming and true item ownership. We’ve previously covered the Enjin Multiverse in detail, but as a broad overview, it’s a partnership between multiple developers that are all building games using the Enjin Coin software development kit.

The Enjin Coin SDK works with the Unity and Unreal Engines, and allows developers with little-to-no blockchain coding knowledge to create games that use blockchain technology. The benefits of blockchain being decentralised servers, true item ownership, provable scarcity of items and – among many other things – a way for players to monetise their time investment into video games.

As all the games using the Enjin engine are talking the same language, it’s possible for items, characters and more to be compatible across the titles. This is what the Enjin Multiverse is experimenting with.

A likeminded example would be if your favourite gun in Gears of War was able to work in Mass Effect, because both games are built on Unreal Engine. That hypothetical situation is made possible by the use of blockchain as seen in the Enjin SDK.

We encourage you to watch the GxB video at the top of this page, where the CEO of developer Touchhour talks about how the Enjin Multiverse will work with his title, 9Lives Arena.

Vrainiac Studio announces two games for Enjin Multiverse

Vrainiac Studio has just announced it is incorporating the Enjin SDK into its two upcoming games. Made of experienced AAA developers who have worked on titles like Call of Duty, Battlefield and Guitar Hero, Vrainiac is focusing on delivering high-end VR video games.

The first title is Born to the Sky, which is a virtual reality wingsuit racing game. Unfolding in real-world cities such as New York, Paris and Hong Kong, the game is looking sharp for a VR title. It’s an arcade racer, with boost and high scores at the forefront, and will be free-to-play. There will be a host of cosmetic enhancements – like Fortnite – all of which are saved on the blockchain.

We have footage of the game and a stack more info in the latest episode of GxB, which can be viewed at the top of this page. (Or you can jump direct to the segment here). Born to the Sky is coming to mobile devices – such as Daydream and Samsung Gear VR – in 2019.

The second game is called Helihunter. It’s described as being more for casual players. It’s an augmented reality shooter experience, played from a first-person perspective while sitting in the pilot seat of a helicopter. Zombies are attacking the city, and your job will be to protect mankind from the air. A demo is out now for mobiles, and again this is a title all about the high scores.

Enjin Mutiverse New Game L

Full list of Enjin Multiverse titles

This news pushes the number of titles involved in the Enjin Multiverse thus far to nine. Those titles are:

  1. 9Lives Arena by Touchhour (watch)
  2. Age of Rust by SpacePirate Games (watch)
  3. Bitcoin Hodler by HODler eV
  4. Born to the Sky by Vrainiac Studio (watch)
  5. Cats in Mechs by Megaworld Studios (watch)
  6. CryptoFights by Thoughts in Motion
  7. Helihunter by Vrainiac Studio
  8. Forest Knight by Chrono Games
  9. War of Crypto by Lucille Games (watch)

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New Crop of ‘Regulated’ Stablecoins are Trading at a Premium to Tether.

The next wave of USD-backed stablecoins have begun to make their way onto high-volume cryptocurrency exchanges, and early indications suggest that traders may trust them more than tether (USDT).

New USD-Backed Cryptocurrencies Vie for Tether’s Crown

As CCN reported, cryptocurrency firms Gemini, Paxos, and Circle have all in recent weeks launched asset-backed “stablecoins,” cryptocurrency tokens whose values are pegged to the U.S. dollar with physical assets stored in company-controlled bank accounts.

All of these firms have received regulatory authorization to operate in New York, whose Department of Financial Services (NYDFS) overseas what many consider to be the strictest cryptocurrency regulatory framework in the United States. Gemini and Paxos have each received NYDFS charters, while Circle has received the state’s coveted “BitLicense.”

Each of these stablecoins, the Gemini Dollar (GUSD), Paxos Standard (PAX), and USD Coin (USDC), looks to unseat Tether’s USDT as the fiat-pegged token of choice in the cryptocurrency markets. Tether, at present, is the eighth-largest cryptocurrency with a $2.8 billion market cap. With $2.3 billion in daily trading volume, it is also the second most liquid cryptocurrency, trailing only bitcoin.

Among other things, all three issuers touted that their tokens will be regulated financial instruments, invoking an unstated comparison to tether, whose issuer has reportedly received a subpoena from U.S. regulators and whose operations have largely been shrouded in secrecy.

Tether has also faced allegations of fractional-reserve banking and cryptocurrency market manipulation, and while an investigation conducted by a respected U.S. legal firm — at Tether’s expense — indicated that the firm’s issued tokens were fully-backed by USD, the company has yet to undergo a full-scale audit. The issuers of GUSD, PAX, and USDC, on the other hand, have contracted with accounting firms to audit their stablecoin balance sheets regularly.

Now, as these new tokens begin to achieve liquidity on cryptocurrency exchanges, it appears as though the controversy surrounding tether — which heretofore has been the primary USD proxy on exchanges not authorized to list physical fiat currencies — is causing USDT to trade at a discount to its more intensely-regulated counterparts.

PAX Trades at Premium to USDT on Binance

Of these three newly-issued stablecoins, Paxos Standard has thus far built the most significant trading volume in the spot cryptocurrency markets.

On Binance, the world’s largest cryptocurrency exchange, PAX trades directly against USDT, providing the market an opportunity to sort out whether one is more trusted than the other. Though just listed on Oct. 4, PAX/USDT has already accumulated more than $2.5 million in trading volume. As of the time of writing, PAX was valued at $1.009 against USDT, trading slightly below its intraday peak of $1.0096.

stablecoin cryptocurrency PAX tether USDT

PAX/USDT | Binance

Paxos Standard is also priced at a one-cent premium to tether on fellow major exchange, where PAX/USDT has $91,000 in daily volume.

This trading pair is actually trading at a slight discount on, though this is likely an outlier since the market currently accounts for less than $2,500 in daily volume on the Chinese exchange.

Despite its premium against USDT, PAX has thus far maintained dollar-parity in Binance’s BTC and BNB markets, which account for a combined $1.4 million in volume in the hours since the token has been listed on the exchange. Since many of bitcoin’s largest trading pairs involve USDT, one would expect any pricing discrepancies between PAX and USDT to spill into these markets as well — eventually. However, with just $4 million in current daily volume, PAX has a long way to go to have that level of influence over the wider cryptocurrency markets.

USDC Experiences Similar Phenomenon

Though less liquid than PAX, Circle’s USDC token has also traded at a premium against USDT during its initial listing period.

cryptocurrency USDC USDT stablecoin

USDT/USDC | Poloniex

On Poloniex, Circle’s order-book cryptocurrency exchange, USDT/USDC is priced at $0.99, with a daily high of just $0.993. Though more thinly-traded than PAX, this market has nevertheless seen more than $180,000 in daily volume, bolstering the case that, at least right now, traders trust these new “regulated” stablecoins more than tether.

This phenomenon may be true of GUSD as well, though there is currently no evidence to this effect. While GUSD has been listed on a handful of trading platforms, it has not yet achieved much volume against USDT.

Of course, it’s possible that there’s another factor at play. It is not currently easy for individual traders to exchange USDT for physical dollars. However, PAX and USDC can be redeemed for USD at their respective issuers by anyone with a verified customer account. Therefore, it’s possible that traders seeking to cash out are willing to pay a slight premium to trade their tethers for an asset that can be more easily converted back into fiat.

Whether tether continues to trade at a discount to this new crop of stablecoins as more units enter the market remains to be seen. If it does, though, it could force its issuer to begin operating more transparently if it hopes to retain significant market share.

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