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Indian municipalities are kicking off their own blockchain ID tests.

With Aadhaar on the back end, India might have a solid future foundation for blockchain ID systems.

The Bankura and Durgapur municipalities in India's West Bengal region are both experimenting with blockchain in their own way, trialling a solution by blockchain ID firm Lynked.World.

And as is often the case when developing solutions for economically developing regions, the use of mobile apps is key.

Papers please

India is in many ways the perfect landing ground for blockchain ID solutions, thanks in part to Aadhaar, one of today's digital wonders of the world. Aadhaar is India's national ID system and the largest biometric database in history. It has about 1.2 billion members, each of whom gets a 12-digit ID number that is tied to biometric information. It's considered proof of residency in India and is tied to the ability to access a range of government services.

But that's on the back end, and for many residents it's still just an ID card that needs to be held while standing in line for hours. With that foundation though, a way of going digital as well as mobile holds a lot of promise.

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In the meantime, rollouts such as Lynked.World solutions are serving as a valuable proof of concept on a smaller scale.

"Specifically, universities and governments can utilize our framework in a customisable way, as seen with Bankura and Durgapur," explains Lynked.World CEO and founder Arun Kumar. "Identification systems run off of a fast verification that is configured on the Lynked.World platform, all unique to each institution. Users create a personal profile, enter information, match with a specific institution and can immediately autofill all required parameters after just one information input.

"The Lynked.World platform additionally utilizes customizable form configuration, meaning the possibilities for each form creation are endless in a sense," Kumar notes.

So if the app is being used to grant access to a certain building, it might confirm that they work there. If it needs to confirm that someone's a resident of India, it might verify them against Aadhaar.

For example, Kumar says, "buildings can utilise the technology to seamlessly log into a workplace or office building instead of using a keycard. All that’s required is a mobile phone, and all of the information is immediately logged when a member swipes in," Kumar says. "This increases efficiency, enables better cost allocations, and creates ease of access."

....on the blockchain

"Depending per entity creating a form, the parameters can be customized... This then enables the process for receiving digital certificates, as seen in the Bankura and Durgapur use cases, from any sort of institution or entity to be processed conveniently in a secure manner, leaving no trails of data which can be deemed vulnerable," Kumar says.

"Enabling it on blockchain allows for immutability as well; a user’s information cannot be faked."

The blockchain element is important, with the decentralisation and immutability creating new ways of protecting privacy and limiting abuse of the systems. Plus, arguably only a decentralised system is sufficiently immutable and resilient to protect something as important as one's own identity.

And convenience-wise, the benefits of having one's entire identity in the palm of one's hand, in a secure and safe way, probably shouldn't be underestimated.

https://www.finder.com.au/indian-municipalities-are-kicking-off-their-own-blockchain-id-tests

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Cryptocurrency market and news round-up 3 October 2018.

Market Update

Bitcoin (BTC)

Bitcoin continues to linger around the $6,600 mark, where it's been since it touched highs of around $6,800 over the weekend. It's currently trading for $6,500.

The sideways trading should be no surprise to regular viewers, who will remember that bitcoin's volatility is the lowest it's been in well over a year. It's perhaps this relative stability that is seeing record numbers of Venezuelan bolivars being traded for bitcoin in an attempt to find a bastion of stability as their country's economic crisis worsens.

According to Coin Dance, the Venezuelan bolivar broke records last week with 600 million bolivars being traded for bitcoin, in the highest week of trading yet, based on LocalBitcoins data.

Trading Trends

NEM (XEM)
Ranked 17th by market cap, NEM is a token that often gets overlooked – but it jumped over 11% on the weekend, before retracing some of the gains in the last 24 hours. The XEM token is currently changing hands for 10 cents.

Trading Trends

Nexo (NEXO)

The crypto loan platform also had a good weekend, jumping up by around 25% after launching a new partnership with CoinMarketCap that adds a "Get Loan" button onto the site.

News

Ripple's xRapid is officially live

Our big story today comes from Ripple's Swell conference, which wraps up in a few hours. The most exciting news from the conference for cryptocurrency enthusiasts was undoubtedly the official announcement that xRapid, which uses the XRP token to transfer liquidity across borders, has gone live at last.

xRapid already has three financial institutions onboard ready to use the service and the cryptocurrency. Brad Garlinghouse stated that Caulix was the first to set the trend with a cross-border transaction to Mexico.

Alastair Constance of MercuryFX – another of the partners announced today – had this to say to Forbes back in May when they were testing the xRapid pilot.

“The exchange rates were very competitive, and the transaction times were unbelievable... It was lightning fast compared to using the correspondent banking network Swift,”

One of the things that makes today so important is that it sees cryptocurrency, not just blockchain, being used as intended at an institutional level – not as an investment vehicle by Wall St or for speculation by traders, but actually used as a more efficient solution to currency transfers .

For those unfamiliar with Ripple's xRapid technology, this excerpt from their latest quarterly report sums it up nicely.

"xRapid eliminates the need for a pre-funded nostro account when executing a cross-border payment. It sources liquidity from XRP on exchanges around the world. As a result, cross-border transactions occur in minutes and at a lower cost compared to traditional methods, which take days and incur high foreign exchange fees."

The price of XRP more than doubled in the weeks leading up to the Swell conference. It currently sits around 52 cents, suggesting that any growth due to this news was already absorbed in the September bull-run.

Decentralised exchanges are the new black

Good news for anyone who doesn't like handing over their funds or private keys to a central authority, such as a conventional cryptocurrency exchange. Decentralised exchanges are looking like they're going to have a big year in 2019.

For those new to the term, decentralised exchanges (or DEXs) allow you to trade directly from your wallet without having to store your cryptocurrency or private keys on an exchange's server. Instead, the DEX operates more like a middle man, facilitating trade between interested parties.

EOSfinex beta is live

Bitfinex, one of the largest exchanges by volume, has announced the beta release of their decentralised exchange on the EOS blockchain. Named EOSfinex, the exchange is intended to be completely trustless, meaning there will be no need to create an account or follow KYC procedures.

The exchange will start with only a handful of pairings involving EOS, BTC, USD and ETH. The platform looks a lot like the regular Bitfinex exchange, which will hopefully translate into ease of use for consumers.

The release follows the release of Ethfinex Trustless, which is another Bitfinex DEX built on the Ethereum blockchain.

Binance DEX due late 2018

Binance is back with more news about its hotly anticipated decentralised exchange. The world's most popular alt-coin exchange, Binance has announced that the DEX beta may begin as soon as the end of this year.

CEO Changpeng Zhao said in a tweet that the DEX would be built on the Binance Coin blockchain and that Binance Coin would be required by users to pay for network fees such as gas.

StellarX: zero-fee DEX

Speaking of network fees – the Stellar network is celebrating the fully operational release of its first zero-fee decentralised exchange, named StellarX. It was produced by Interstellar, the newly merged organisation which is a commercial entity that produces products for the Stellar blockchain.

StellarX is a fiat-to-crypto gateway and hosts a suite of cryptocurrencies, including Stellar's XLM as well as fiat currencies such as US dollars, which can be deposited straight from a US bank account. Other fiat currencies are collateralised by digital tokens backing currencies such as the British pound and Chinese yuan.

StellarX is able to offer zero-fee trading due to its commitment to refund all network fees to users, unlike Binance's proposed DEX and many others.

The exchange also hopes to host digital versions of other assets like bonds, stocks and real estate. Combined with zero fees and a fiat gateway, it looks set to become a seriously well-rounded exchange.

Before you go...

Deloitte outlines major hurdles to adoption

Before we go, here's one for you to think about. Consulting firm Deloitte has outlined five major hurdles, which it believes are preventing mainstream adoption of blockchain technology.

The two biggest issues it identified were

  • Network delays and scaling issues
  • Lack of standardisation between blockchains and protocols

And three lesser, but still serious issues were

  • The cost and complexity of network operations (e.g. gas and network fees)
  • The need for supportive regulation
  • Collaboration between blockchain firms

And last of all, there was a special shout out to smart contracts, which do not fit easily into existing legal frameworks.

https://www.finder.com.au/cryptocurrency-market-and-news-round-up-3-october-2018

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TransferGo using Ripple to offer 100% free and zero fee transfers.

Zero fee real-time transfers are the new black.

"Can we make cross-border payments completely free? What would it take to offer the mid-market zero fees?" asked TransferGo CEO Daumantas Dvilinskas to the crowd at the Ripple Swell conference.

It must have been a rhetorical question because TransferGo has now launched TransferGo FREE, offering exactly that.

Too good to be true?

If it sounds too good to be true, it shouldn't.

Zero fee international money transfers aren't unheard of. Often they're made possible by companies profiting from foreign currency spreads instead of outright fees.

But TransferGo might be aiming a bit higher, with the goal of offering near-instant real-time money transfers without any fees. The goal is to let anyone send money to anyone else, to and from anywhere in the world, without needing to think twice about the costs.

Dvilinskas might see it as the inevitable future for the international money transfer industry, describing an ongoing shift in consumer behaviour where TransferGo customers have started sending smaller and smaller transactions more and more frequently.

This was almost certainly made possible by constantly dropping fees and easier access to these services through mobile apps and similar.

Overall, it might speak to what people really want – a reliable way of sending money as cheaply and easily as sending an instant message.

It might sound obvious now, but in yesteryear, one might be forgiven for looking at the available data and concluding that people prefer making larger and less frequent transfers because fewer transfers are less time consuming and more convenient. When in fact, those apparent consumer preferences might just have been a response to the expensive and slow realities of old money transfer services rather than what people actually want.

"In effect, we built a glimpse of what the future of cross-border financial services would be. A truly real-time experience. Where customers can send money to their friends and family regardless of where they are," Dvilinskas said.

It's worth emphasising that the ability to send small amounts of money overseas is an extremely recent and significant invention. Consequently, one can reasonably expect a bit of industry upheaval right about now.

The future upshot

This bodes well for Ripple, who's powering TransferGo's TransferGo FREE service.

It's understandably difficult to get cheaper than free or quicker than instant, so this will probably settle in as the new industry standard. As one of the few companies able to deliver the solutions that make this possible, Ripple might be in a position to rake in the customers going forwards.

The benefits of this new standard will also fall on Stellar and IBM, which are similarly in a position to deliver this solution.

It's also worth noting the potential applications of these systems in more local payments. Paying 1-3% in fees for the privilege of using a credit card will start seeming a bit goofy when you can literally send money across the planet without any fees. The most likely future seems to be mobile payments where you can just scan QR codes at the checkout. The reduced overhead offered by distributed ledger technology here, along with other digital money benefits, might make fees of 0.1% or less perfectly feasible.

A race-to-the-bottom scenario might also be on the cards as financial institutions and tech companies continue their convergence. Banks are turning into tech companies, and tech companies like Ripple, Facebook, IBM and Coinbase are diving into the world of financial services. With such a clear benchmark, the idea of charging your customers a fee just for moving their money might become quite foreign in the coming years.

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It's the same sentiment raised by Moody's earlier this year, which described an upcoming split in global banking leadership as the technological haves break away from the non-technological have-nots.

"Incumbent banks that aggressively pursue agile digital strategies will defend their core franchises, broaden their customer bases and improve efficiency, supporting their creditworthiness. Laggards will face increased customer attrition, reduced pricing power and uncompetitive cost structures," it said in an extremely conservative report.

But not all companies are equally positioned to just switch on a blockchain-based payment system. And at the moment, smaller and more agile companies might be getting an outsized advantage.

TransferGo is a relatively small fish in the grand scheme of international payments, with only 700,000 customers, 47 destinations worldwide and 1.5 million transactions per year worldwide, according to Dvilinskas.

Compare that to a giant like Western Union, whose 150 million customers move billions through it each year around over 200 countries.

Western Union can't just replace its existing systems with a Ripple solution the way smaller businesses can. Rather, its sheer scale means it has to swallow the simultaneous costs of both old and new solutions if it wants to update, observes Ripple senior vice president of product Asheesh Birla. As a result, it can look at Ripple solutions and quite honestly say "this won't save us any money."

But with services like TransferGo FREE setting a new benchmark of real-time zero fee transfers, which is not a future development, but a real thing that's happening right now, industry incumbents might have to start re-evaluating their timelines and getting with the program sooner rather than later.

It's an exciting time for the trillion dollar global payments industry.

https://www.finder.com.au/transfergo-using-ripple-to-offer-100-free-zero-fee-transfers

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Institutional Investors Biggest Buyers of Cryptocurrency worth over $100,000: Report

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After months of speculation, institutional investors have finally stepped into the cryptocurrency market by becoming the biggest buyers through over-the-counter (OTC) transactions. According to a report by Bloomberg, these investors have bought over $100,000 cryptocurrencies via private sales.

Bobby Cho, global head of trading at Cumberland, a division of crypto company DRW Holdings LLC, said that the cryptocurrency market is now learning from its mistakes. Back when cryptocurrencies were breaking records, miners as well as sellers were holding on to their coins for making more profit. But when the market was suffering losses, these people were selling them at the recovery points. Now, these miners are selling cryptocurrencies in regular sales. “The Wild West days of crypto are really turning the corner,” explained Cho.

Crypto and financial research companies, Digital Assets Research and TABB Group, discovered that OTC transactions ranging from $250 million to $30 billion took place every day in April 2018. This figure is higher than the $15 billion traded in crypto exchanges per day.

Although, the OTC market has suffered losses due to dwindling crypto prices, its position is far better than crypto exchanges. Cho said that institutional investors were hesitating due to the volatile nature of the crypto market. “Over the last four to six months, the market has been trading in a very tight range, and that’s seems to be corresponding with traditional financial institutions becoming more comfortable diving into the space,” concluded Cho.

Tom Flake, founder of crypto mining solution provider Bcause LLC, added that institutional investors are only liquidating cryptocurrencies through OTC. Where large transactions can easily influence the crypto market, private sales allow investors to fix the prices before completing the purchase.

Sam Doctor, Quant Strategist at Fundstrat Global Advisers, said that OTC transactions are preferable because institutional investors tend to buy a large amount of cryptocurrency and exchanges fail to meet these requirements. He added that the market is currently imbalanced owing to the increasing interest from institutional investors. Brokerage firms are trying to bridge the gap by offering their services.

However, these companies are not the only ones rapidly launching products for institutional investors. In July 2018, Coinbase launched a custodial service “Coinbase Custody” for institutional investors. Later in August, Bloomberg reported that Goldman Sachs was also eyeing the possibility of opening the first custody for crypto funds and institutional investors.

https://www.ccn.com/institutional-investors-biggest-buyers-of-cryptocurrency-worth-over-100000-report/

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Bitcoin is Still at an Early Stage: If You Hold 0.28 BTC, You’re Part of the 1%

Due to the fixed supply of Bitcoin, former Google Product Director Steve Lee stated that only 1 percent of the world’s population can own more than 0.28 BTC.

“If you own 0.28 BTC and HODL, you can be certain no more than 1% of the current world’s population can ever own more BTC than you. A modest investment of $1,830 today can ensure you are a 1%er in a future Bitcoin world,” Lee explained.

Throughout the next few years, the scarcity of Bitcoin will increase as more investors and institutions continue to accumulate the cryptocurrency, which could further reduce the total possible number of individuals that can ever own one whole Bitcoin (1 BTC).

Bitcoin Supply is Lower Than 21 Million

The supply of Bitcoin is fixed at 21 million BTC, and as a hard coded monetary policy of the protocol, the fixed supply of the dominant cryptocurrency cannot be altered.

In late 2017, Chainalysis, a blockchain forensics company that monitors and investigates cryptocurrency transactions, revealed in a research paper that up to four million BTC are permanently lost on the blockchain as a result of theft, loss of wallets and private keys, and the dormant wallet of Bitcoin creator Satoshi Nakamoto, which experts have said is no longer accessible.

Kim Grauer, Senior Economist at Chainalysis, said at the time, that the lost supply of BTC is not taken into consideration by the market cap. That means, the real price of BTC could be substantially higher, as 4 to 6 million BTC are estimated to be lost.

“That is a very complex question. On the one hand, direct calculations about market cap do not take lost coins into consideration. Considering how highly speculative this field is, those market cap calculations may make it into economic models of the market that impact spending activity,” Grauer said.

The 0.28 BTC figure introduced by Lee assumes the supply of Bitcoin to be 21 million, as it divides 21 million by 0.28 and divides the outcome of that by the world population that is 7.442 billion. If the research of Chainalysis is accurate and that 4 to 6 million BTC are lost on the blockchain, the supply of Bitcoin should be closer to around 16 to 17 million.

Based on the estimate that the supply of Bitcoin is around 17 million, only 0.8 percent of the world population can own more than 0.28 BTC and less than 0.2 of the world population can own more than 1 BTC.

 

Is Bitcoin Underpriced?

In consideration of the limited the supply of Bitcoin and the increasing value of the cryptocurrency, in the years to come, the 0.2 percent figure is expected to decline substantially.

The fact that any investor in the global market can be within the 1 percent of the world population with a $1,830 investment demonstrates that the cryptocurrency market is still at its early phase, and in terms of adoption, market development, infrastructure, and regulation, the sector can still grow significantly in the mid to long-term.

https://www.ccn.com/bitcoin-is-still-at-an-early-stage-if-you-hold-0-28-btc-youre-part-of-the-1/

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Ubisoft Joins Blockchain Game Alliance as Publishers Anticipate Death of the Video Game Console.

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The video game console is dying, and AAA game publisher Ubisoft wants to help craft the standards that guide the development of one of the technologies that may one day replace it: blockchain.

Ubisoft Joins Blockchain Game Alliance

Toward that end, the French gaming giant has signed on as a founding member of the Blockchain Game Alliance, whose members will collaborate to develop industry standards and best practices for gaming applications that rely on distributed ledger technology (DLT). The news was first reported by U.K. video game magazine MCV.

From the group’s website:

“Convinced that this breakthrough technology brings numerous new benefits to the whole ecosystem, from developers to players, we provide an open forum for all stakeholders to share knowledge and collaborate on research that foster new ways to create and play games. Our ultimate goal is to help spread the integration of Blockchain by developing common standards and best practices.”

Other notable founding members include ConsenSys, the blockchain development studio founded by Ethereum co-creator Joseph Lubin, as well as Fig, the independent game publisher behind games such as Pillars of Eternity 2: Deadfire and Wasteland 3 who earlier this year acquired a blockchain development company. These firms are joined by fellow members B2Expand, Alto, EverdreamSoft, Gimli, Enjin, and Ultra.

CCN reported earlier this year that Ubisoft’s Strategic Innovation Lab had begun to explore DLT development, and the firm has since sponsored several blockchain hackathons and conferences in addition to its new role in the Blockchain Game Alliance

Google, Ubisoft Partner for Cloud Streaming Trial

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Notably, Ubisoft’s decision to take an active role in creating standards for blockchain gaming development comes amid the firm’s wider belief that cloud gaming represents the future of the industry.

In June, Ubisoft CEO Yves Guillemot said the video game console may only survive for one more generation before it is completely eclipsed by streaming services.

“I think we will see another generation, but there is a good chance that step-by-step we will see less and less hardware,” Guillemot said during an interview with Variety. “With time, I think streaming will become more accessible to many players and make it not necessary to have big hardware at home,” he continued, adding that “There will be one more console generation and then after that, we will be streaming, all of us.”

Earlier this week, Ubisoft teamed up with Google for “Project Stream,” a trial run of the tech giant’s ambitious plan to stream AAA games through the Google Chrome browser. During the trial, eligible participants will have the opportunity to stream Assassin’s Creed Odyssey, the latest game in Ubisoft’s flagship franchise, for free.

Google, incidentally, has begun to roll out the red carpet for blockchain developers as it seeks to avoid falling behind Amazon Web Services (AWS) and Microsoft Azure, both of whom have released blockchain products and templates that allow developers to deploy DLT applications without having to write the entire code from scratch.

In July, Google Cloud partnered with Digital Asset — the DLT startup founded by former JPMorgan executive Blythe Masters — to create a software development kit (SDK) for developers, providing them with a “full stack solution so they can unleash the potential for web-paced innovation in blockchain” without the need for specialized training in blockchain development.

https://www.ccn.com/ubisoft-joins-blockchain-game-alliance-as-publishers-anticipate-death-of-the-video-game-console/

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Google Bans Obfuscated Chrome Extensions to Cryptojackers’ Woe.

Technology behemoth Google announced it will be taking crucial steps to ban any browser extensions that could potentially be targeting internet users’ digital assets.

According to a recent press release, the company announced some of their upcoming plans to provide Chrome user’s with even more privacy and security when adding extensions to their browsers. And, not only will they be banning new extensions, but they will also be delisting all existing extensions that run any crypto mining scripts.

In the report, Google stated that “We’ve recently taken a number of steps toward improved extension security with the launch of out-of-process iframes, the removal of inline installation, and significant advancements in our ability to detect and block malicious extensions using machine learning.”

A Step Towards Safer Browser Extensions

Until now, Chrome’s Web Store had been accepting cryptocurrency mining extensions, so long as the developers complied with the company’s policy to inform their users about running the mining script.

However, in June 2018, Google mentioned in a blog post that, “approximately 90% of all extensions with mining scripts that developers have attempted to upload to Chrome Web Store have failed to comply with these policies.”

Recently, Google has also made mentions that over the past few months, there has been a significant rise in the number of malicious extensions that seek to hijack users’ digital assets. So, with this in mind, it should be easy to see why Google has made the ban on any extension that poses even the slightest risk to Chrome users.

Chrome’s Upcoming Changes

  • User controls for host permissions

Chrome users will now be able to configure their browser’s extensions to require a lock before it can gain access to the current page. As well as, being able to restrict extension host access to a customizable list of websites.

  • Improved Extension Review Process

Any extensions that require permissions will now be subject to an additional compliance review before being approved for the Web Store.

  • New Code Requirements

The Web Store will no longer be allowing browser extensions with obfuscated code. This includes both existing, as well as new extension submissions. Any extensions with an obfuscated code will be delisted from the Web Store if not compliant within the next 90 days.

  • Two-Step Verification

As of 2019, all developer accounts will require enrollment in two-step verification before being able to submit browser extensions to the Web Store. This is meant to create an additional layer of safety and will require authentication from a developers phone or by creating a physical security key.

Along with these upcoming change’s to the Web Store’s policies, as of 2019, Google will introducing Manifest v3, which will see even more changes being made to the platform to add even more security, privacy and browser performance.

https://www.ccn.com/google-bans-obfuscated-chrome-extensions-to-cryptojackers-woe/

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Regulation for Legitimacy: South Korea Nears ICO Legalization.

Min Byung-Doo, a member of the country’s governing Democratic party and the chairman of Korea’s National Policy Committee, has strongly encouraged the government to legalize initial coin offering (ICO) and impose better crypto-related regulatory frameworks to legitimize the local market.

“Regulation is not bad. Regulation is necessary, it is the only way to legitimize the market and allow investors to build trust towards the cryptocurrency market,” chairman Min said.

ICO Has Become a New Trend

In his statement at the National Assembly of South Korea meeting, chairman Min emphasized the importance of embracing new technologies and acknowledging new trends in the global finance and technology space.

He explained that the successful $1.7 billion ICO of Telegram and $4 billion token sale of Block.One / EOS have demonstrated increasing interest and demand for ICO projects, which the country cannot dismiss.

“The government cannot dismiss ICO. It needs to allow companies to conduct ICO. ICO has become a new trend in the global market and it is the responsibility and ability of the government to embrace new technologies,” he said, adding “We can see that the flow of investment is clearly changing compared to ICO and angel fundraising. The ICO has raised $1.7 billion for Telegram and $4 billion for Block.One, It is getting bigger and bigger.”

Previously, Choi Jong-ku, the chairman of the Financial Services Commission (FSC), prevented Kakao, the biggest Internet conglomerate in South Korea that has over 80 percent market share over local fintech, messaging, ride hailing, social media, and online stock trading industries, from conducting an ICO in South Korea.

As the conglomerate established a company in Switzerland to conduct an ICO overseas, FSC chairman Choi stated that the country could consider the ICO to be an illicit fund raising method.

“Even if there is no prohibition on cryptocurrency or digital asset trading, there is a possibility that it [Kakao ICO] may be regarded as fraud or multi-level sales according to the issuance method. Since the risk is very high in terms of investor protection, the government has a negative stance on the ICO,” chairman Ku said.

Ultimately, Kakao and Bithumb, the second biggest cryptocurrency exchange in South Korea, scrapped their plans to conduct token sales.

Based on the success of Telegram and EOS, the ICO of Kakao could have garnered similar interest from the global cryptocurrency sector. Considering the potential of the ICO market and local blockchain initiatives, chairman Min asserted that the government should regulate and legalize ICOs in the short-term.

“Let the government, the National Assembly and the blockchain association quickly create a working group to block fraud, speculation, money laundering and develop the block-chain industry,” he said.

Legislation Pending, Generally Positive

Currently, the National Assembly is awaiting to approve or reject the first crypto and blockchain-related legislation of South Korea, which if approved would consider digital asset exchanges as regulated banks and blockchain projects as legitimate entities.

The initial introduction of the legislation led the majority of investors within the local market to be optimistic about the long-term growth of the market. With the forward-thinking approach of chairman Min, South Korea is expected to see major changes in local regulatory frameworks surrounding the cryptocurrency market.

https://www.ccn.com/regulation-for-legitimacy-south-korea-nears-ico-legalization/

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$2.5 Million: Binance Invests in Aussie Crypto Payments Startup to Push Adoption.

Australian cryptocurrency payments startup Travelbybit has seen a cash injection of $2.5 million from a high-profile investor in Binance, the world’s largest cryptocurrency exchange.

Crypto unicorn Binance is investing AUD $3.48 million (approx. USD$2.5 million) in TravelbyBit to further expansion of the latter’s network of cryptocurrency payment terminals following a successful implementation in Brisbane earlier this year, Business Insider Australia reported on Wednesday.

The two companies will jointly collaborate in introducing a point-of-sale (POS) system – already developed by TravelbyBit – into “major airports around the world,” the report added. The objective is to propel cryptocurrency adoption among travelers who commonly see friction in currency conversion and other markup fees.

Binance chief executive Changpeng Zhao said:

“Let’s start with airports and go from there…Real, on-the-ground, just-when-you-need-it use case is the key to further crypto adoption. In this light, there is no better fit than being able to use your crypto when travelling, just after you land in a foreign country, where you may not have the local currency.”

Queensland-based TravelbyBit has quickly become one of Australia’s most-relevant startups in the cryptocurrency industry for its adoption-forward focus in developing software and point-of-sale (POS) retail terminals that enable crypto payments.

Earlier this year, Brisbane international airport, Australia’s third-busiest airport, became one of the first major airline hubs in the world to accept cryptocurrencies at retail stores in both its terminals.

In essence, travelers are able to use a number of cryptocurrencies including bitcoin, ethereum, bitcoin cash and litecoin, among others. Predictably, Binance’s own custom ERC20 token, Binance Coin, will also be supported by retail merchants using TravelbyBit’s machines.

 

TravelbyBit CEO Caleb Yeoh added:

“Imagine traveling with multiple stopovers and only needing a single currency. We’re working with the most innovative airports and retailers who want to offer their consumers non-traditional payment options and a chance to experience cutting-edge technology.”

Beyond airports, TravelbyBit has also boosted the profile of Australian beach town Agnes Water, which calls itself ‘Australia’s first digital currency town’. Nearly three dozen local businesses including tour operators, restaurants and accommodation providers – even a local pub – in the town of 2,000 residents are accepting cryptocurrencies for payment through TravelbyBit’s POS system.

Such initiatives have seen the Aussie crypto startup earn recognition and investment from the Queensland government, receiving allocated funds from an AUD$8.3 million grant.

Describing the startup as a “company set to drive more tourists to Central Queensland by selling travel experiences online using cryptocurrency,” Queensland Innovation Minister Kate Jones said in August:

“Tourism is one of Queensland’s most important industries. TravelbyBit has devised a clever way to make it easier for visitors to our state to pay for their purchases with a growing number of local businesses accepting cryptocurrency payments.”

https://www.ccn.com/2-5-million-binance-invests-in-aussie-crypto-payments-startup-to-push-adoption/

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Brazil Watchdog Tells Crypto Exchanges to Answer Questionnaire or Face a Fine.

Brazil’s Administrative Council for Economic Defense (CADE), the country’s antitrust watchdog, has recently sent 10 cryptocurrency exchanges and an OTC trading desk a questionnaire they have to answer by October 19, or face a fine that’ll go up to $25,000.

According to local news outlet Portal do Bitcoin, the questionnaire was sent on October 1, and follows an investigation reportedly requested back in June by the Brazilian Association for Cryptocurrency and Blockchain (ABCB), into the country’s financial institutions’ attitudes toward crypto-related businesses.

As CCN covered, CADE probed the country’s banks earlier this year for allegedly purposefully harming cryptocurrency exchanges by restricting their operations. Its investigation aimed to find out whether the financial institutions abused their position. This as the regulator at the time stated they were “imposing, restricting or even prohibiting… access to the financial system for cryptocurrency brokerages.”

Now, per Portal do Bitcoin, it’s time for the country’s exchanges to respond to the regulator. The questionnaire was sent to top exchanges, including Waltime, Brazilex, BitcoinTrade, Mercado Bitcoin, Foxbit, and more.

These were asked to reveal who will be replying to the questionnaire so the regulator can contact the person, as well as details about their operations. In its document, CADE notes exchanges that refuse to answer will be fined. It reads:

“In accordance with art. 40 of the Law 12,529 / 2011, the refusal, omission or unjustified delay of the requested information or documents constitutes an offense punishable by a daily fine of R $ 5,000.00 (five thousand reais) [about $1,270], and may be increased by up to twenty (20) times, if necessary to ensure its effectiveness, because of the economic situation of the offender. “

CADE’s questionnaire

According to the questionnaire, published by the local news outlet, the regulator first asks cryptocurrency exchanges to present their business and to “briefly describe” their operations in Brazil. Then, through 10 questions, it digs deeper.

In these, CADE questions whether the exchanges have had their bank accounts shut down, or if they’ve been refused banking services. If so, the regulator asks whether they suffered losses because of it.

As some would expect, it also probes the exchanges’ attitudes toward illicit activites. The regulator asks them to explain in detail what measures they’ve adopted to prevent money laundering, terrorism financing, or organized crime. It also asks their they know-your-customer (KYC) checks and whether they’ve refused to serve clients before.

Per Portal do Bitcoin, one of the motives local banks used to shut down the exchanges’ accounts was their lack of a National Classification of Economic Activity (CNAE). Taking this into account, CADE is also using the questionnaire to get crypto exchanges to clarify what they declared was “their main activity to banks, when requesting the opening of an account ”

Finally, it questions whether they monitor their users’ transactions and if so, how, as well as whether they allows their users to “carry out transactions in non-traceable methods, like cash.”

The news outlet adds that both banks and crypto exchanges can ask the antitrust watchdog to keep their answers a secret by adding to them a “restricted access” classification. Whether these will remain a secret, however, reportedly depends on the regulators’ analysis.

https://www.ccn.com/brazil-watchdog-tells-crypto-exchanges-to-answer-questionnaire-or-face-a-fine/

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South Korea Rejects Crypto Exchanges as Venture Firms, Taxes to Double.

In a blow to the industry, the government of South Korea has stuck with its legislative proposal to exclude the cryptocurrency and blockchain industry from being certified as venture firms.

First proposed by South Korea’s Ministry for Small and Medium Enterprises (SMEs) and Startups in August, the revision to the law called for Korea’s domestic blockchain industry, including cryptocurrency exchanges, to be removed from the government’s official classified list of certified venture firms.

As CCN reported at the time, the enactment of the proposal would mean that cryptocurrency startups and exchange platforms will join businesses from the gambling, bar and entertainment industry. Quite simply, the sector would thereby lose tax perks and other financial incentives afforded to domestic startups and small businesses.

Presently, a number of major Korean exchanges – some of the biggest in the world including UPbit and Bithumb – remain certified as venture firms but that recognition is set to expire near the end of the year.

“The measure will discourage the industry as a whole,” lobby groups including the Korea Blockchain Association, Korea Industry Promotion Association and the Korea Blockchain Startup Association warned at the time, voicing their obvious displeasure at the proposed revision to the law.

As reported by Business Korea this week, the South Korean government has agreed upon the proposal with its legislation in the National Assembly.

The policy, according to the report, will see cryptocurrency exchanges face the burden of their corporate and income taxes doubling while they will no longer benefit from a 75% cut in acquisition taxes. Further, cryptocurrency exchanges will no longer have any privileges such as credit guarantees.

“Under the new government policy, cryptocurrency exchanges that will be newly set up this month or later cannot be certified as venture firms,” the report added, painting a bleak forecast for new startups entering the space.

The lack of tax benefits is certain to discourage research and development within the industry which could seek to move their base of operations to friendlier jurisdictions abroad.

For instance, Korean exchange Upbit made a notable expansion to Singapore in its first international foray earlier this year with operations to commence this month.

Launched a year ago by Dunamu, an affiliate of Korea’s largest messaging platform Kakao, with support for over 100 cryptocurrencies at launch, chief executive Sigroo Lee had a telling explanation for the company’s expansion beyond South Korea.

Speaking less than a month ago, he stated:

“We felt the timing was right to expand globally despite various uncertainties surrounding the Korean market.”

https://www.ccn.com/south-korea-rejects-crypto-exchanges-as-venture-firms-taxes-to-double/

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Ripple (XRP) Price Declines 8% While the Crypto Market Loses $9 Billion.

Subsequent to the release of a major partnership with $80 billion banking giant Banco Santander, the price of Ripple (XRP) has declined by more than 8 percent.

In the past 24 hours, the valuation of the cryptocurrency market dropped by around $9 billion, as Bitcoin dropped below the $6,500 mark for the first time in the past seven days, recording a 2 percent decline in value.

Low Volume was the Issue

Yesterday, on October 2, CCN reported that the low volume of Bitcoin is a concern for traders and it could negatively impact the short-term trend of Bitcoin.

“The volume of Bitcoin remains fairly low at around $4 billion, down more than 30 percent since mid-September. On Coincap, the cryptocurrency market data provider of popular digital asset trading platform ShapeShift, which eliminates exchanges suspected of having false volumes, the daily trading volume of Bitcoin is estimated to be around $2.6 billion,” the report of CCN read.

It would have been possible for the dominant cryptocurrency to engage in a short-term upside movement if its volume had rebounded by around 15 to 20 percent. But, throughout the past 24 hours, the daily trading volume of Bitcoin remained at $4 billion on CoinMarketCap and $2.77 billion on Coincap.io.

The volume of Bitcoin recorded a slight gain of around 1 percent, which had no notable effect on the short-term trend of the crypto market.

The sudden drop in the price of XRP after Swell 2018 conference also contributed to the downtrend of major cryptocurrencies.

In the crypto market, most digital assets tend to experience a pump prior to the release or materialization of a major announcement like a product release or a mainnet launch, and then fall by a large margin subsequent to the announcement.

As such, some investors expected the price of XRP to fall after the major announcement of Ripple Labs was released, but given the significance of RippleNet integration by Banco Santander and its OnePay FX mobile application, investors expected the momentum of XRP to continue.

The decline in the momentum of XRP and most major cryptocurrencies including Ethereum (ETH), Bitcoin Cash (BCH) and Stellar (XLM) will likely prevent the market from initiating a major short-term rally in the next 24 to 48 hours.

At this phase in the market, it is important for cryptocurrencies to demonstrate a gradual increase in volume to initiate a corrective rally in the days to come.

OTC Market is Still Healthy

According to Bobby Cho, the global head of trading at Cumberland, a Chicago-based cryptocurrency trading unit of DRW Holdings LLC, the over-the-counter (OTC) market of Bitcoin has been quite active amongst high-net-worth individuals and institutions, which may have led Bitcoin to stabilize at a low price range.

“One of the biggest criticisms of crypto by institutional investors has been the volatility. Over the last four to six months, the market has been trading in a very tight range, and that’s seems to be corresponding with traditional financial institutions becoming more comfortable diving into the space,” Cho said.

If the demand for BTC continues to increase in the OTC market, it is possible that in the weeks to come, BTC experience recovery in its momentum and volume.

https://www.ccn.com/ripple-xrp-price-declines-8-while-the-crypto-market-loses-9-billion/

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TRON Launches Project Atlas to Bring BitTorrent Users into its Blockchain.

TRON is aiming to bring blockchain and file sharing together with their latest venture, Project Atlas, which will blend blockchain technology with BitTorrent’s massive peer-to-peer infrastructure.

TRON acquired BitTorrent in July 2018, along with its 100 million active monthly users. BitTorrent is an established peer-to-peer network with a developed and tested infrastructure, but only time will tell how well the collaboration will work.

It’s an intriguing move, but what does it mean? Peer-to-peer file sharing has always been a popular way of exchanging information and media online, with around 27 million people using it to share or download files every day.

It’s clearly an important space and dates back to the early days of the internet. File sharing advocates are quick to call attention to its value in promoting democracy, openness, and the free exchange of ideas. Its detractors, of course, will point to the misuse of file sharing and torrenting platforms by pirates and criminals.

Still, many projects in the space are committed to making the internet a fairer and more decentralized place, where users can interact directly with one another instead of relying on centralized third parties. In this sense, it has something in common with the world of blockchain.

Project Atlas is an attempt to fuse the two spaces, with the aim of improving how file sharing works.

The aim is to improve the way BitTorrent works by introducing blockchain technology and tokens. BitTorrent already has reward systems in place to encourage users to share files for longer and be responsible members of the community, but TRON hopes to use tokens to further this.

The system will use tokens to reward users who seed files for longer and use faster nodes, as well as those who share more of their bandwidth and storage space. This way, they hope to increase download speeds and make the file sharing experience smoother and more pleasant.

It’s also backward compatible, which means the original BitTorrent software will continue to work while new changes are being made. The team has promised to keep BitTorrent products free, which should be a relief for the software’s user base.

The project could help encourage more responsible usage of torrenting and improve user experience. On the other hand, torrenting has found it hard to shake off its shady reputation, and turning this around could be a challenge.

https://www.ccn.com/tron-launches-project-atlas-to-bring-bittorrent-users-into-its-blockchain/

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BitMEX Taps Former Hong Kong Regulator as Chief Operating Officer.

BitMEX, one of the largest cryptocurrency trading platforms, has named Angelina Kwan, formerly managing director and head of regulatory compliance for Hong Kong Exchanges and Clearing Limited (HKEX), as its chief operating officer. Kwan, who joins the company as it rides exceptional growth, will work with regulators worldwide to develop rules that will support cryptocurrency’s continued growth.

24 Years of Leadership Experience

Kwan, who will be based in Hong Kong, said she hopes her experience working with regulators worldwide will help her in developing a “constructive dialogue” with regulators, she told the South China Morning Post.

China and South Korea last year banned digital coin sales while other markets such as Hong Kong have not fully regulated cryptocurrency. Norman Chan Tak-lam last month said cryptocurrency trading carries high risk while the city’s investment regulator, the Securities and Futures Commission of Hong Kong, has warned about fraud and manipulation in the cryptocurrency market.

“I believe Angelina’s decision to join us is a signal that the global markets are shifting focus to the rapidly-expanding domain of crypto-coins,” said Arthur Hayes, BitMEX CEO and co-founder. “Angelina’s vast experience in regulation, trading platforms, business development, restructuring, and investor and stakeholder relations will be pivotal as we continue the push towards mainstream cryptocurrency adoption and broaden our community.” Kwan brings vast experience in both regulation and traditional finance, Hayes added.

hong kong

Hong Kong | Source: Shutterstock

Kwan, who spent eight years at the Securities and Futures Commission of Hong Kong, brings more than 24 years of experience in leadership roles for financial products in Asia and the United States. She has worked at global financial services firms, covering retail securities trading and asset management.

“My most memorable accomplishments — from successfully restructuring and relisting a bankrupt financial services company, spearheading the establishment of new operations or companies, to serving on a number of boards and committees — have been joining organizations that are at the cusp of making a major breakthrough, so it’s with a sense of great excitement that I take on the challenge of driving BitMEX to new market heights,” Kwan said. “In addition to being a true market leader among trading platforms, BitMEX shares my value of gender inclusion, particularly in STEM fields. Cryptocurrency markets present an exciting new opportunity for women to get involved in the intersection of finance and technology, two fields in which they are chronically under-represented.”

BitMEX Rides Major Growth

In the third quarter of 2018 alone, BitMEX broke the industry record for 24-hour bitcoin trading volume on two separate occasions.

BitMEX recently occupied Cheung Kong Center’s 45th floor, one of the most expensive offices in the world, with an average per-square-foot rent of $28.66, which is more than nine times that of the $3.18 the company was paying at its previous headquarters in Hong Kong’s Victoria Harbor, a warehouse district. The company’s expansion plans caused it to require the entire floor, rather than the half-floor it had originally intended to occupy.

https://www.ccn.com/bitmex-taps-former-hong-kong-regulator-to-head-compliance-efforts/

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Brazil Gives Investment Funds Green Light to [Indirectly] Buy Bitcoin.

Brazil’s securities regulator, Comissão de Valores Mobiliários (CVM), has reportedly authorized investment funds to indirectly put their money in the cryptocurrency ecosystem, through the acquisition of derivatives and foreign funds.

Brazilian Funds Can Now Gain Exposure to Cryptocurrency

According to a circular issued by the Finance Ministry of Brazil, first spotted by local news outlet Portal do bitcoin, funds can also invest in “other assets” traded in other jurisdictions, as long as these are regulated where they’re traded.

Per the news outlet, this means investment funds can now purchase share in a foreign fund whose portfolio consists mainly of cryptocurrencies like bitcoin, ethereum, and litecoin.

The Ministry of Finance’s circular points out there’s room for fraud. Money laundering or other illicit activities exist in the space and, as such, funds should invest in cryptocurrency products through regulated exchanges. These platforms, it adds, should be subjected to “the supervision of regulatory agencies that have powers to restrain such illegal practices.”

It further claims funds should take certain precautions before purchasing cryptocurrencies to avoid buying tokens issued by fraudulent ICOs. The circular points out six basic precautions, which include verifying whether their technology is “transparent, accessible, and verifiable by any user,” and whether the token has sufficient liquidity.

Interestingly, it also says that funds should check “whether there are arrangements that raise conflicts of interest or the concentration of excessive powers on the issuer or promoter of the cryptoasset, or the use of aggressive sales techniques.”

The government organization’s document adds it may be hard to assess the “right price” for each cryptoasset. It reads:

“One possible parameter, in this sense, is the investment in cryptoassets that contain the permanent disclosure of globally recognized price indices prepared by independent third parties.”

In a previous circular, the superintendent of institutional investor relations at CVM, Daniel Maeda, made it clear investment funds aren’t allowed to directly invest in cryptocurrencies. Investment funds that put their money in the cryptocurrency ecosystem, per the CVM, will also have to make it clear how they’ll approach hard forks and airdrops.

Brazil Warms to Bitcoin

brazil bitcoin cryptocurrency

Notably, the Brazilian government has increasingly been supporting crypto-related businesses, at a time in which Grupo XP, the largest independent brokerage in Brazil, revealed it plans to launch a bitcoin and ethereum trading platform by the end of this year.

Brazil’s antitrust watchdog, the Administrative Council for Economic Defense (CADE), has also launched an investigation into whether banks are purposefully harming cryptocurrency exchanges in the country by restricting their operations.

Despite the government’s seemingly pro-cryptocurrency attitude, it also earlier this year sent local cryptocurrency exchanges a 14-point questionnaire to learn more about their businesses and study their potential use in money laundering.

Editor’s note: Some statements in this article have been translated from Spanish.

https://www.ccn.com/brazil-gives-investment-funds-green-light-to-indirectly-buy-bitcoin/

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Coinbase Will Achieve $8 Billion Valuation Following Hedge Fund Investment: Report

Tiger Global, a U.K. hedge fund that invests mainly in global consumer brands, is reportedly considering a $500 million investment in Coinbase, which would boost the startup’s valuation close to $8 billion and strengthen the cryptocurrency market’s legitimacy, according to sources that spoke to Recode. The investment would make Coinbase one of the highest valued U.S. startups.

The investment in part would buy out existing shareholders, although the specific numbers have not been determined.

Valuation More Than Quadrupling

Last summer, Coinbase was valued at close to $1.5 billion. The valuation came right before a spike in consumer interest in cryptocurrencies at the end of 2017. Since then, the company’s business has weakened due to a decline in cryptocurrency prices. Coinbase CEO Brian Armstrong and others have been quick to point out that they do not focus on short-term trading volume as much as opening the financial system up for the world.

Coinbase claims it is profitable and, per the report, has been negotiating with investors for most of the year concerning a secondary stock sale to allow them to cash out without forcing the company to raise new funds. The company warned people at one point to stop soliciting shareholders, and an agreement was never reached. The company declined to answer Recode’s questions on the topic.

Also read: Binance, Coinbase on hiring spree despite bear market, sign of rapid growth

Possible IPO?

Coinbase reportedly tried to value itself at $8 billion in its acquisition of Earn.com this year, its largest to date, and is said to have been scaling for a possible IPO.

The cryptocurrency industry giant recently named Chris Dodd of Charles Schwab to its board, having lost Facebook’s David Marcus as an independent director over the summer. The company also recently hired Michael Li, a senior executive and head of analytics and data science at LinkedIn, as its new vice president of data.

https://www.ccn.com/coinbase-will-achieve-8-billion-valuation-following-hedge-fund-investment-report/

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John McAfee-Linked Bitcoin Mining Firm Hit with Lawsuit over Pump-and-Dump Scheme.

MGT Capital Investments, a bitcoin mining and cryptocurrency investing firm formerly associated with John McAfee, has been hit with a class-action lawsuit over allegations that its former CEO participated in a pump-and-dump scheme that manipulated the price of MGT shares.

Bitcoin Mining Firm Faces Class-Action Suit

The suit, which was filed by Rosen Law Firm on behalf of current and former MGT shareholders who purchased MGT securities between Oct. 2015 and Sept. 2018, follows a Securities and Exchange Commission (SEC) investigation into a stock-pumping scheme that involved former MGT Capital CEO Robert Ladd, who stepped down after being named in the complaint.

That pump-and-dump operation, as CCN reported, consisted of a group of 10 investors and corporate executives including Ladd, former Riot Blockchain CEO John O’Rourke (who also tendered his resignation), and billionaire Phillip Frost, who allegedly conspired over a period of several years to generate more than $27 million in unlawful stock sales by manipulating the prices of penny stocks.

Though not explicitly named in the SEC order, it is clear from the agency’s complaint that the pump-and-dump group used dishonest promotion and manipulative stock trading to drive up the price of MGT shares, enabling them to net more than $9.4 million during a period of just two weeks.

John McAfee Named as Defendant

Some of that alleged dishonest promotion was related to MGT’s acquisition of a company owned by an unnamed “Cybersecurity Innovator,” almost certainly John McAfee. Upon joining MGT, McAfee served at various times as executive chairman and CEO up until his resignation in August 2017. While McAfee was not named as a defendant in the SEC’s complaint, he is listed as a defendant in the class-action lawsuit.

Citing copiously from the SEC order, the Rosen Law Firm’s complaint alleges that MGT and the other defendants violated the Securities Exchange Act on four counts, all involving various components of the pump-and-dump scheme.

The suit requests that the court order MGT to pay damages to shareholders affected by the manipulation of MGT shares, cover the plaintiff’s court costs, and award further relief to aggrieved parties.

When reached for comment, an MGT spokesperson told CCN that the firm has the “utmost confidence” that the suit is without merit.

“MGT has the utmost confidence that the suit filed against them is without merit,” the spokesperson said. “This is not a departure from normal affairs in securities markets when share prices are down. Previous cases along a similar vein were thrown out without prejudice.”

Read the full complaint below:

MGT Capital Complaint by CCN on Scribd

 

https://www.ccn.com/john-mcafee-linked-bitcoin-mining-firm-hit-with-lawsuit-over-pump-and-dump-scheme/

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Bitcoin Price Manipulated by Cryptocurrency Trading Bots: WSJ

Bots that manipulate bitcoin price are not new, and they aren’t going away, according to The Wall Street Journal. The problem continues to draw regulatory scrutiny, as it was cited by the Securities and Exchange Commission (SEC) when it rejected several bitcoin ETF applications in August.

Andy Bromberg, president and co-founder of CoinList, which issues tokens, told the WSJ that the bots are rampant marketwide, at least at the present time.

Stefan Qin, the managing partner at cryptocurrency hedge fund Virgil Capital, uses its own bots to battle “enemy” bots on dozens of cryptocurrency exchanges worldwide. His company has built error handing functions to identify activities that are potentially illegal, referencing the crypto sector as the “Wild West of Crypto.”

How One Bot Manipulates The Market

Virgil, which specializes in arbitrage, suffered a “harassing bot” earlier this year that targeted certain ether trades, Qin told the publication, causing losses.

Virgil was checking prices every minute looking for arbitrage opportunities with cryptocurrency prices. The hostile bot would post and order to sell ether at a price lower than what other sellers were offering, prompting Virgil to try to make a buy. Right before Virgil completed the purchase, the bot would cancel its sell order. As a result, Virgil posted buy orders that never got executed, which increased the price on other exchanges, according to Qin.

This practice of faking orders and then canceling them is known as “spoofing,” the purpose of which is to create the impression that supply or demand for an asset is higher than it actually is. U.S. futures and stock markets outlawed the practice in 2010, but there have long been allegations that it is taking place in the cryptocurrency markets.

‘Manipulation’ Has Defenders

bitcoin price

BTC/USD | Bitfinex

Some bitcoin supporters who oppose to cryptocurrency regulation don’t consider market manipulation as wrong and openly support it.

Trader Kjetil Eilersten developed a program called Quatloo Trader which he bills as the leading cryptocurrency market manipulation tool. He told the WSJ that he thinks it is pointless to outlaw manipulating digital currencies. He said it would be better to provide sophisticated manipulation tools to small traders as a way to level the playing field. If everyone manipulates, no one manipulates, he said.

Other crypto traders see manipulation as undermining its adoption.

Also read: Mt. Gox trading bots manipulated the bitcoin price

WSJ: Bots Enable Pump-and-Dump Schemes

Bots also enable pump-and-dump schemes, whereby traders promote a cryptocurrency’s price before dumping it to make a profit. Those investors who bought at the top price end up losing the most.

Quatloo Trader has a tab called “whale tools” that execute abusive strategies. One such tool, “ping pong” allows users to execute buy and sell orders to themselves, giving the illusion of extensive activity for a cryptocurrency. The practice, known as “wash trading,” is illegal in futures and stocks.

Crypto “pump groups” did at least $825 million in a six-month period, the Wall Street Journal reported in August.

Regulators have taken note. The Commodities Futures Trading Commission (CFTC) and the U.S. justice Department are investigating cryptocurrency manipulation while the SEC has been battling the issuing of fraudulent tokens. The CFTC in particular has issued a consumer warning on pump-and-dump schemes involving cryptocurrency and has offered cash rewards for whistleblowers who provide evidence of such operations.

https://www.ccn.com/bitcoin-price-manipulated-by-cryptocurrency-trading-bots-wsj/

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Brave CEO Tells Senate that U.S. Needs GDPR-Style Data Privacy Rules.

The chief executive of cryptocurrency-funded web browser Brave has penned a letter to the U.S. Senate calling for legislators to adopt data privacy regulations comparable to those recently implemented in Europe.

Brave CEO Calls for a U.S. GDPR

Writing in the letter dated Sept. 28 and addressed to the U.S. Senate Committee on Commerce, Science, and Transportation, Brave CEO Brendan Eich said that Congress should adopt rules similar to the European Union’s General Data Protection Regulation (GDPR), a regulatory framework that governs how businesses must handle the data of EU citizens.

Adopted in 2016 and implemented earlier this year, the GDPR purports to strengthen privacy regulations and give EU consumers more control over how their personal data is used.

Calling the GDPR “a great leveler,” Eich said that — contrary to the assumption that increased regulation favors incumbents — these policies will make it easier for startups to enter the marketplace since entrenched heavyweights will have a more difficult time collecting user data for one purpose and using it for another.

Arguing that “the character of GDPR is congruent with the United States’ understanding of privacy,” he wrote:

“As regulators broaden their enforcement of the new rules in Europe, the GDPR’s principle of ‘purpose limitation’ will begin to prevent dominant platforms from using data that they have collected for one purpose at one end of their business to the benefit of other parts of their business in a way that currently disadvantages new entrants. In general, platform giants will need ‘opt-in’ consent for each purpose for which they want to use consumers’ data. This will create a breathing space for new entrants to emerge.”

The Javascript creator and Mozilla co-founder further contradicted the narrative that privacy-hostile advertising policies such as behavioral tracking and micro-targeting are necessary for online publishers, alleging that the increasing prevalence of ad-blockers — he claimed that 615 million devices were using ad-blocking software as of late 2017 — demonstrates that this advertising model is fundamentally broken.

“Contrary to some of our industry colleagues, I believe that it is not tenable for any platform, publisher, technology vendor, or trade body, to claim that they must track people in order to generate revenue from advertising,” he wrote. “Trust will only return as the GDPR-like laws begin to curtail the online advertising industry’s worst practices.”

Cryptocurrency-Funded Brave Makes Strides

As CCN reported, Brave — which was bootstrapped through an initial coin offering (ICO) in 2017 — plans to upend the digital advertising model, in part through the use of the Basic Attention Token (BAT) cryptocurrency. The browser accomplishes this by blocking ads by default, then allowing users to opt-in to non-tracking ads that are based on browser-side intent signals. Publishers then receive a portion of that revenue that far exceeds what most third-party advertising services currently offer.

Eich’s letter to Congress is the latest jab in Brave’s all-out assault on tech conglomerate Google, who the upstart firm accuses of engaging in unscrupulous business practices related to advertising and data protection — or lack thereof.

Last month, Brave filed GDPR complaints against Google in Britain and Ireland, seeking to trigger an EU-wide investigation into the company’s data protection policies. If regulators identified GDPR violations, Google could face fines as large as 4 percent of its global revenue.

At the same time, Brave dumped Google as the default search engine for users in France and Germany, replacing it with the privacy-centric Qwant. While more symbolic than anything else, the move was perhaps designed to put Google on notice that, just as its browser and search engine disrupted earlier industry heavyweights, it may one day face a reckoning as well.

Though still a small player by market share, Brave has seen rapid growth in 2018 and now reports that its browser has 4 million monthly active users across all devices. The browser also received a favorable review from Popular Science, who listed it as an attractive alternative to Chrome and Safari.

Brave’s ascent has been aided by a recent update to Google Chrome, which security experts have said is anathematic to user privacy in that it now forces users to sign into their browsers when they log into a Google service such as Gmail or Docs.

https://www.ccn.com/brave-ceo-tells-senate-that-u-s-needs-gdpr-style-data-privacy-rules/

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1Broker Shut Down, Will More Bitcoin Exchanges be Targeted by US Gov’t?

1Broker, a Marshall Islands-based securities dealer and bitcoin trading platform, was recently taken down by the US authorities.

The FBI seized the domain of 1Broker, shutting down the platform for allegedly violating money laundering regulations and distributing securities as an unregistered dealer.

The official announcement of the US Securities and Exchange Commission (SEC) read:

“The SEC alleges that a Special Agent with the Federal Bureau of Investigation, acting in an undercover capacity, successfully purchased several security-based swaps on 1Broker’s platform from the U.S. despite not meeting the discretionary investment thresholds required by the federal securities laws.”

1Broker Fights Back

On Oct. 2, the 1Broker team released a statement on social media, stating that the company is working with a U.S. counsel and its legal team to represent 1Broker in the SEC/CFTC case to potentially recover the platform.

“We are currently engaging U.S. counsel who can represent us in the SEC/CFTC case. We expect that this takes a few days. We received the green light from our lawyers to set up a read-only version 1Broker to view balances and transaction history. ETA: 48 hours,” the team said.

Prior to that, on Sept. 27, 1Broker emphasized that it will cooperate with the authorities and with the SEC to partially re-enable the platform to allow withdrawals for its users.

“Statement regarding the SEC allegation: All funds are currently secure and we will fully cooperate with the authorities. If approved by the SEC, we will enable withdrawals for US customers as soon as possible. A more detailed statement will follow.”

Currently, as of Oct. 2, the official domain of 1Broker still displays a statement from the FBI, which seized 1Broker.com after obtaining a warrant from the United States District Court for the District of Columbia.

bitcoin exchange 1Broker

Bitcoin trading site 1Broker was seized by U.S. officials.

What Does the 1Broker Case Mean to the Crypto Market?

Jake Chervinsky, a government enforcement defense and securities litigation attorney at Kobre & Kim LLP, explained that an undercover FBI agent initiated a unregistered security-based swap on March 30, 2016.

It took more than two years for the SEC and the FBI to take action and shut down the exchange of 1Broker. Given that most tokens, which are considered as securities under existing laws in the US, were released in the second half of last year, Chervinsky implied that in the months to come, many exchanges and token issuers are likely to be targeted by US authorities.

“The undercover FBI agent who investigated 1broker bought his first unregistered security-based swap on March 30, 2016. The government didn’t take action until two and a half years later. The majority of ICOs (unregistered securities?) were issued in 2H 2017. Buckle up, folks,” he said.

Several investors in the cryptocurrency space including Aurelius, a widely recognized crypto trader, stated that exchanges like BitMEX could potentially be targeted by the SEC for offering margin trading around Bitcoin and Ethereum.

As Shamoil T. Shipchandler, Director of the SEC’s Fort Worth Regional Office said:

“The SEC protects U.S. investors across a variety of platforms, regardless of the type of currency used in their transactions. International companies that transact with U.S. investors cannot circumvent compliance with the federal securities laws by using cryptocurrency.”

https://www.ccn.com/1broker-shut-down-will-more-bitcoin-exchanges-be-targeted-by-us-govt/

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