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Canada’s Indigenous Tribes’ Organization Extorted for C$20,000 in Bitcoim

An organization representing indigenous tribes in Canada recently paid a ransom in bitcoin worth thousands of dollars in order to regain access to computer files that had been encrypted by a hacker.


According to the Canadian Broadcasting Corporation (CBC), over C$20,000 worth of bitcoin was paid out by the Federation of Sovereign Indigenous Nations (FSIN) to an anonymous hacker who had breached the organization’s computer systems. FSIN, which represents 74 First Nations in the Canadian province of Saskatchewan, was reportedly first contacted five months ago when the hacker emailed a staff member demanding to be paid bitcoin worth over C$100,000 in order to allow access to encrypted files.


Ransom Paid Without Authorization

Per sources who spoke with the CBC, the hacker not only managed to gain control of the federation’s email system and internal files but also stole some data including files related to internal land claims, youth athletes as well as their coaches. Additionally, the hacker who managed to remain undetected for an unknown period of time, also accessed the treaty card numbers, social insurance numbers as well as the health claims of the federation’s staff and executives.


After the computer security breach was detected a meeting of the audit committee and the treasury board of the FSIN was held with some of the proposals being put forward being informing the police as well as going public about the attack. However, none of the suggestions were effected but the audit committee and the treasury board warned members of staff and the executives of the FSIN not to pay the ransom arguing that there were no guarantees the hacker would keep his side of the bargain and release the files.

Despite the committee’s warning, negotiations with the anonymous hacker continued quietly with the ransom eventually getting paid. According to the CBC, three members of the committee sought an explanation over the action that had been taken behind their back but they did get any. It is understood that a private cybersecurity firm has since then been contracted by the FSIN.


Town of Midland

The move by FSIN’s executives to pay the ransom is similar to that taken by a Canadian town last month. Early in September, the town of Midland in the province of Ontario paid an unknown amount in bitcoin following a cyberattack which crippled the processing of marriage applications, reloading of transit cards, issuance of permits, email services and the processing of payments.



Unlike in the case of FSIN and Midland though, cyber thugs did not meet with the same luck when they hacked the computer systems of Carleton University in Canada’s capital, Ottawa, almost two years ago. As CCN reported at the time the educational institution simply refused to pay up the two bitcoin per machine that was being demanded and instead relied on its own IT department to secure and restore the affected network.

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Newsflash: CNBC’s CryptoTrader Claims Coinbase is Preparing for an IPO

CNBC’s Ryan NeuNer, who hosts CryptoTrader, has promised to release details on the anticipated Coinbase Initial Public Offering.



CNBC previously reported that Coinbase was likely to  take the “most obvious path” and become a public company.


According to screencaps published along with the tweet, Coinbase has approximately 25 million users, around 600,000 of whom trade monthly. Coinbase earned almost half a billion dollars last year, 80% of which was from consumers. The firm’s recent announcement that it had been approved as an independent custodian in New York will likely only improve its revenues.




The IPO prospects of Coinbase are interesting. It will be one of the first major stock symbols to be directly tied to the value and performance of crypto assets, in that the performance of the company very much relies on the health of the crypto economy. At the same time, it raises the question as to why investors wouldn’t simply invest in the currencies themselves as opposed to investing in one of a host of companies who facilitate acquisition, stewardship, and trading of such currencies.


In recent months, crypto companies have floated the idea of pursuing initial public offerings, including Bitmain. The new reality offers Wall Street investors a chance to play in cryptocurrencies without actually getting their hands dirty in them. It also opens up new capital for the industry, which for years has been limited primarily to existing crypto holders in terms of pools of potential capital.




Ironically, the chaos and corruption of the traditional stock market and banking industry played a major role in the development of Bitcoin. Satoshi’s first block famously included a headline from a recent newspaper of the time:




Now a decade later, companies built on, born and bred of Bitcoin and other cryptos are, in some senses, returning to the fold, offering traditional stocks to traditional investors and financial outfits. We come full circle and the new reality perhaps provide a degree of uncertainty for those who thought they’d figured the market out already.

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Crypto Market Stagnant as Bitcoin Price Fails to Breakout, Back to $6,390

Throughout the past 24 hours, Bitcoin price seemed to be demonstrating momentum above the $6,400 mark, showing signs of a potential breakout.


However, an abrupt fall from $6,430 to $6,370 put an end to the breakout, as BTC failed to breach a minor resistance level.




With the volume of BTC at around $3.4 billion on CoinMarketCap, the chance of a major breakout in the next 24 to 48 hours remains relatively low.


Stability of Bitcoin: Same Range Over and Over Again

On October 15, heavily affected by speculation around Tether (USDT) triggered by the issues between Tether LLC and its US dollar bank, the price of the BTC-to-USDT pair rose to around $7,700 on Bitfinex.


As a consequence, the Bitcoin price on fiat-to-cryptocurrency exchanges such as Coinbase, Bitstamp, and Kraken also surged substantially to around $6,800.

Since then, the price of BTC has fallen to the range of $6,350 to $6,450, stuck in the same range for more than 10 days since October 16.


The sudden increase in the price of BTC on October 15 from $6,120 to $6,800 served as an important short-term catalyst to drive the recovery of Bitcoin. Influenced by the price movement of BTC in mid-October, throughout the past week, BTC has been able to defend the $6,300 support level well despite its insufficient volume and low trading activity in the cryptocurrency exchange market.


Cryptocurrency trader and technical analyst Hsaka emphasized that in a period like this, taking leveraged trades and high-risk options is of extreme risk and presents relatively low returns.


“Still range-bound. Not taking any leveraged positions here. Weekly open (white) is acting as support now. Both sides of the range have been tapped often enough now to serve as good levels playable on a break and retest.”

The stability in the price of Bitcoin and the sideways market of crypto have negative affected the short-term price trend of small market cap tokens, which usually benefit from the stability of the dominant cryptocurrency.


Decred, Power Ledger, Loom, Qtum, and Aeternity recorded losses in the range of 5 to 10 percent as the worst performing cryptocurrencies in the global market on October 25.


The volume of Bitcoin is low but the daily trading volume of tokens and small market cap cryptocurrencies are continuing to record yearly lows. Tokens could initiate a strong recovery as they have done throughout 2018 if BTC recovers with solid volume. In the weeks to come, analysts do not expect investors to engage in high-risk trades.


Ripple and Bitcoin Cash Struggling

In recent months, Ripple (XRP), Bitcoin Cash (BCH), EOS, and Stellar (XLM) have demonstrated a price trend which reflects that of tokens and small market cryptocurrencies. The four major cryptotucrrencies recorded losses in the range of 1 to 3 percent against the US dollar.


In the upcoming days, it is likely for the crypto market to see stability in the price of BTC and a gradual increase in its volume until BTC tests a major resistance level in the higher region of $6,000.

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Academics Analyze Crypto Pump and Dump Schemes in New Paper

Three university scholars – two from the University of Florida and one from Princeton – have concluded what many veteran cryptocurrency enthusiasts have long known and loudly preached: pump-and-dump schemes are bad.


In a new paper currently in progress by Tao Li, Donghwa Shin, and Baolian Wang, the scholars provide evidence that market manipulation schemes “are detrimental to the liquidity and price of cryptocurrencies.”


CCN readers may have an interest in the context of the paper in relation to the recent activity at YoBit, in which the exchange itself openly promised to inject a ton of money into random coins in order to inflate their price.


What Is A Pump-And-Dump Scheme?

For the uninitiated, the term “pump-and-dump” might be foreign. Therefore we should first point out that these schemes did not begin with cryptocurrency and they will be around forever. That’s right: there is no eliminating the pump and dump scheme so long as people are free to make trading decisions on their own.


In any case, a “pump” is when a great deal of value is injected into a given stock, symbol, or, in our case, cryptocurrency, in a market sense. A hype cycle is often involved, and new products are especially likely to be P&Ds. A lone investor with a lot of capital or a small group of colluding entities can make a huge difference in weak markets. The examples in the cryptosphere are endless. One or two bitcoins can purchase a large amount of literally thousands of different coins, and if there are only a few exchanges listing a given token, the “price” will see a significant rise.

The “dump” part of the scheme is when the people acquiring the asset and necessarily driving its price to ridiculous highs sell off their stake to people who are none the wiser. The people buying at rates which previously would have been unreasonable believe they are buying long-term, solid assets. There is also a psychological element to both gambling and investing in which a dominant part of the human brain believes that things will be the way they are today tomorrow. The reality is that pump and dump schemes are hard to regulate without hard facts and informants because often enough, on the surface, they can appear like healthy boom-time trading.



The cryptocurrency sector has been rife with pump-and-dump schemes.

High-risk instruments trading has one goal: get out at the top, or nearest to the top that you can. Experienced traders understand that any asset can turn to absolute crap overnight. Traditional stocks can dive on the news cycle. The fundamentals are what matter. But with even more high-risk instruments, such as speculative technologies and the tokens that power them, the fundamentals are incredibly difficult to gauge. This reporter has dedicated a substantial portion of his life to covering the happenings around cryptocurrencies, tokens, and the like, and still he is overly cautious in most investments surrounding them due to the simple fact that the future is unwritten, and something entirely unexpected can overshadow the basket you dump all your eggs into.


All of which is to say: trading amidst a pump and dump conspiracy is like being caught in a building victimized by arson. The arsonist is most likely to get out with barely even any smoke in his lungs, if he gets burned at all. The rest of the people suffer by degrees. The last person to sell loses the most money.


Hype Is Important

The hype cycle is important to most of these schemes, but it is not absolutely necessary for success. A pump-and-dump expert could potentially fool a market mostly made up of trading robots. Inside information such as the said bots’ trading triggers would help a great deal. A pump-and-dump scheme can go for weeks or months, or it can last a few days. Often, hundreds of smaller traders participate in private Telegram groups with the intent of making each other richer.


As the scholars write:


In the cryptocurrency market, manipulators often organize “pump groups” using encrypted messaging apps such as Telegram. They create Telegram channels and invite other investors to join. They frequently advertise on social media platforms to attract investors. A Telegram channel operator can post messages for other members to read. For a planned pump, the operator announces the target date, time, and exchange, usually at least one day in advance. However, they do not disclose the identity of the target token until the scheduled time. Members also receive multiple reminder messages before the announcement of the token symbol. As we show in this paper, a typical cryptocurrency P&D lasts for only several minutes. Therefore, it is reasonable to believe that Telegram channel members are important participants in P&Ds.


What it really boils down to is having enough money and the know-how to raise the price of a given asset. We don’t use the word “value” because the actual value of a token is relative to much more than what people on markets are trading it for that day. As an example, if Bitcoin dove 75% again tomorrow, its actual “value” would probably not be reflected in the market price. Likely as not, it would cost more to mine it, for a time, than it would to buy it. But the value of Bitcoin is much more than what people are willing to pay for it at a given second. The price is a separate thing.


The most successful schemes happen at the launch of a token or a coin and are perpetuated by the creators or “team” themselves. Entire blockchains have been created and abandoned in the pursuit of sometimes small amounts of Bitcoin.


What Can Be Done?

As earlier stated, pump and dump fraud is like any other unsavory activity: it will always be there. How much and how often it is allowed to affect the rest of society is where positive action is possible. The study done by the authors reviewed a specific case, Bittrex, and its tactics attempting to mitigate or eliminate pumping and dumping on its platform. The results were apparently positive in nature:


Messages about pump groups on Telegram show that traders involved in P&D tactics had taken notice of the warning. Many scheduled P&D events were immediately canceled. For example, one prominent pump channel, “Trading signals for crypto,” canceled its P&D event on November 26, 2017. Some message groups solicited feedback from group members regarding whether to switch to other exchanges. Many message groups eventually ceased to pump tokens traded on Bittrex and/or switched to alternative exchanges such as Yobit.


Another conclusion of the paper is that newcomers are often looted of their initial investment. Again, in so many ways crypto trading parallels gambling: a new poker player might be bullied off his small stake by insane bets on the part of a bluffing veteran, or simply not know what they are doing and lose their money that way. The major difference is that a gambler understands it’s a just a game, whereas most investors are earnestly trying to make money, and often they are influenced by false information or downright lies. Resultantly, there is and may for the foreseeable future be “significant wealth transfer” from newcomers to immoral scam artists masquerading as investors.


And as long as there is a market for something, there will be a provider. We can’t stress enough how absurd it is for an exchange itself to openly “pump” coins at random, as Yobit have done. The next step is the exchange operators simply running off with the money, which has happened before. Perhaps it’s better than exchanges which do it on the sly, as most every exchange has been excused. Yet, there was long speculation that Crytpsy was pumping the price of Paycoin and other tokens using customer funds, and look what happened there.

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Cryptocurrency is Illegal, President of India’s Primary IT Body Claims

The president of India’s influential IT industry body Nasscom has said that cryptocurrencies are illegal from the association’s perspective.


In a week where Indian authorities have arrested the co-founders of a leading cryptocurrency exchange for operating a bitcoin ATM, National Association of Software and Services Companies (Nasscom) president Debjani Ghosh has opined it is “very clear that cryptocurrencies were illegal,” according to a  Business Line report on Thursday.

The IT industry association, whose remit includes safeguarding technology startups in India against regulatory and legal hurdles, has instead urged the nascent crypto sector to take up any grievances directly with the government.


Ghosh reportedly stated:


“It is the law of the land and hence, we have to work with it. If we do not agree, we have to go back to the government and speak about why cryptocurrencies aren’t correct [legal].”


For clarity, cryptocurrencies like bitcoin aren’t recognized as a legal method of payment or a financial instrument in India. However, it’s crucial to note that they haven’t been ruled illegal either.


The ambiguity has even seen petitions land at the Supreme Court, garnering a clarity-seeking response by the country’s highest court to little avail. India’s central bank, the Reserve Bank of India (RBI), has gone on to enforce a restrictive policy barring banks from providing services to the cryptocurrency sector, earlier this year.

Pressed about the ongoing situation wherein Indian authorities arrested the co-founder of Unocoin, one of India’s biggest and best-funded crypto exchanges, earlier this week, she said NASSCOM is yet to ascertain the details of the case.


Pointedly, she said:


“The genesis of this problem, however, lies in the failure of policy making not keeping pace with rapid technological changes.”


Nasscom will look to “synergise technological development and policy making” she added.


Despite disputing the legality of public cryptocurrencies, Nasscom has markedly invested in developing blockchain technology with a special interest group established in the nation’s capital of New Delihi, last year. In February, the influential organization partnered Canada’s Blockchain Research Institute with a focus to usher in the digital economy with decentralized technology as the core driver.

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Newsflash: UK Govt. Halts Royal Mint’s Plans for Gold-Backed Cryptocurrency

The UK government has blocked a Royal Mint plan to create a “digital gold” token that would trade on a cryptocurrency exchange.


According to sources cited in  Reuters, the British finance ministry refused to approve the 1,100-year old Mint’s plans to issue as much as $1 billion worth of “Royal Mint Gold” (RMG) tokens, which would have been backed by gold assets stored in the government-owned Mint’s vaults.

“Sadly, due to market conditions this did not prove possible at this time, but we will revisit this if and when market conditions are right,” a Mint spokesperson was cited as saying.


Initially, The Royal Mint had planned to list the tokens on a blockchain-based exchange operated by U.S. derivatives exchange CME, which also manages the largest regulated bitcoin futures market. However, the CME backed out of the partnership just prior to the scheduled launch date late last year, delaying the project and forcing the Mint to pursue a cryptocurrency exchange listing to save the venture. That was a bridge too far for the finance ministry, who considered such a partnership too risky for the Mint, and, by extension, the government.


Without approval to move forward with the project, Mint CEO Anne Jessop — who was appointed in Feb. 2018 — shut the project down, leading to four employees being laid off and another 7-8 “made redundant.”

Had the full $1 billion in RMG been issued on a public blockchain, the token would have been numbered among the world’s most valuable cryptocurrencies. At current valuations, it would have ranked just outside the top 15 largest cryptoassets, trailing closely behind NEO and ethereum classic (ETC).


The sources cited in the report suggested that CME, which launched bitcoin futures in Dec. 2017 and has seen minor-but-growing volumes in this market, may be “cooling” toward this nascent asset class. “CME’s management changed, and they walked away, didn’t want to get involved,” one source told the publication.


CME, on its part, told Reuters that it was “continuing to assess client demand with our partner and have nothing new to report at this time.”


CCN had first reported the Royal Mint’s plans to create a blockchain asset back in 2016.

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Sony Develops Cryptocurrency Hardware Wallet Tech, Plans to ‘Commercialize’ it

Electronics giant Sony has developed technology that it believes will help cryptocurrency users store their assets more securely, and that technology might just be coming soon to store near you.


The Japanese tech conglomerate this week announced that its Computer Science Laboratories division (Sony CSL) had developed a cryptocurrency hardware wallet that could be used to store bitcoin and other digital assets in a secure offline environment while retaining the convenience of less-secure online crypto storage systems.

Unlike conventional cryptocurrency hardware wallets like the Trezor One and Ledger Nano S, which connect to the user’s PC or mobile device using a USB cord, Sony CSL’s wallet would store the user’s private keys on a contactless IC card, enabling the user to easily sign transactions from an NFC-enabled mobile device.


Sony explained:


“This IC card type hardware wallet is small, portable and useful, unlike typical existing hardware wallets that connect to PCs via USB. In addition, it is possible to securely generate and store a private key with a highly reliable tamper-proof module within the IC card.”


The release further noted that this type of wallet card would have “multiple possible applications,” including allowing a user to sign a blockchain transaction authorizing the use of their personal information.


Perhaps most notably, Sony’s development of cryptocurrency tech does not appear to be a mere research project, or, as is often the case, an instance of a company seeking to position itself as an innovator in cutting-edge technology, even though it has no plans to convert its research into real-world products and applications.

Earlier this year, Sony applied to patent a system that uses blockchain technology for digital rights management (DRM). Just this month, the company unveiled the production version of that system, which will build on Sony Global Education’s already-existent DRM platform for sharing educational data.


In its latest announcement, the firm said it plans to work toward the “commercialization” of its cryptocurrency wallet, with the ultimate aim of furthering the spread of blockchain technology.


The company said, “Sony CSL will continue advancing towards the commercialization of that ‘cryptocurrency hardware wallet technology’ that allows for safe and secure transactions of digital assets including cryptocurrencies with the aim of further…adoption of blockchain technology.”

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Japan Considers Significant Caps on Cryptocurrency Margin Trading

Japan’s primarily financial regulator is mulling a leverage cap on the amount of funds investors can borrow for margin trading with cryptocurrencies.


In a marked effort to clamp down on speculative trading to minimise volatility risks for investors, the Financial Services Agency (FSA) is considering leverage caps on margin trading, the Nikkei reported on Thursday.

There are presently no restrictions on margin trading borrowing currently in domestic Japanese markets, enabling some exchanges to offer traders up to 25 times the deposit as leverage, the default upper limit margin for foreign exchange trading. By contrast, the financial regulator is reportedly considering caps between two to four times the deposits, with limits as low as 2:1 also proposed.


According to the FSA’s own data from April this year, Japan is home to over 3.5 million active cryptocurrency traders, with a majority aged from 20 to 40 years.


While annual domestic trading in bitcoin – the world’s first and most traded cryptocurrency – rose from $22 million in 2014 to $97 billion in 2017, a majority of the total domestic trading volume in 2017 occurred in derivatives trading. Margin traders represented a significant majority behind the $543 billion traded in 2017.

The Nikkei report adds that seven of the sixteen licensed cryptocurrency exchanges provide margin-trading platforms. Incidentally, a self-regulatory body representing those licensed exchange operators has already enforced a 4-to-1 limit on margin trading earlier in July.


“This is just a provisional measure — I don’t think a ratio of 4 is adequate,” Japan Virtual Currency Exchange Association (JVCEA) chair Taizen Okuyama said.


The JVCEA now has the ability to monitor and self-regulate the sixteen licensed exchanges after being approved as a “certified fund settlement business association” following scrutiny over a two-month review by the FSA yesterday.

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Woman Arrested for Stealing XRP Worth $65,000 in Australia’s Biggest Crypto Theft

A 23-year-old woman has been arrested by the Sydney police for stealing $65,000 worth cryptocurrencies from a 56-year-old man.


Brisbane Times reported that the woman hacked the victim’s email account in January 2018. She used the two-step verification feature by changing the password and verifying it with her mobile number. She then sent 100,00 XRP to her account in China from the crypto accounts connected to the email account. The XRP were converted into Bitcoins and transferred to multiple e-wallets. The victim was able to acquire his account after two days, however, the woman had drained all his funds by that time.


Arthur Katsogiannis, Cybercrime Squad commander, said, “It’s a very significant crime and it’s the first we know of its type in Australia where an individual has been arrested and charged for the technology-enabled theft of cryptocurrency.”


Katsogiannis said that even though this crime is the first of its kind, it will become a norm in the coming years. He added that such incidents will prove to be dangerous for investors interested in cryptocurrencies.  reported that the Public Order and Riot Squad (PORS) caught the woman at her parent’s house in Ebbing and seized all of her electronic devices. The woman is set to appear at Burwood Local Court on November 19.


Crypto Crimes Continue to Haunt Authorities

Last month, Oklahoma police arrested two men for allegedly stealing $14 million worth CMCT tokens from blockchain-based IT company Crowd Machine. The men got hold of the victim’s SIM card and replaced it with a fake one to use the former to access the crypto wallet.


In September 2018, Japanese crypto exchange Zaif lost 6.7 billion yen ($60 million) worth cryptocurrencies stored in hot wallets. This hack bore a resemblance to crypto exchange Coincheck’s hacking incident earlier this year. The exchange lost $530 million worth NEM stored in hot wallets, while the funds stored in cold wallets remained safe. Following the hack, the Financial Services Agency (FSA) of Japan sent business improvement orders to 6 crypto exchanges including Zaif.


Japan’s National Police Agency (NPA) recently published a report which explained that 158 crypto crimes were reported in the first half of 2018 alone. The agency added that 60% of these cases occurred due to the use of similar account and password details in various online accounts. With a total of 60 billion yen (approximately $534 million) stolen this year, XRP and BTC are considered the most targeted cryptocurrencies.

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Spain Approves Law Requiring Citizens to Disclose all Crypto Holdings

The Spanish Ministry of Finance has closed a legal loophole allowing holders of bitcoin and other cryptocurrencies to skirt asset declaration laws. Announcing a draft anti-fraud law approved by the Council of Ministers earlier today, Finance Minister María Jesús Montero explained that the new law will mandate “the identification of the holders and the balances contributed by these virtual currencies,” obligating crypto asset holders to declare all cryptocurrency asset holdings.


Spanish daily newspaper reports that Montero further stated that all Spaniards with offshore currency holdings in fiat or crypto must declare these holdings in an annual declaration to Spain’s Agencia Tributaria.


New Spanish Taxation Measures Affecting Crypto Holders

The draft law is intended to raise a further 850 million euros in tax revenue at a time when Spain is in desperate need of extra government revenue to fund investment and welfare spending in a country with 33.8 percent youth unemployment.


To assist revenue generation efforts, the Spanish government has introduced a draft bill to impose a 0.2 percent tax on purchases of listed shares valued at more than a billion euros. Whether this will have any impact on cryptocurrency investment remains unclear at the moment as no further information was forthcoming at press time.

In what may possibly be significant news for crypto traders depending on the Spanish government’s interpretation of crypto trading as a commercial activity, the so-called “Tobin tax” provision in the draft bill states that intraday net transactions will be taxed, which means that users buying and selling several assets in the same session will only be taxed based on their position at the start of trading and at close, regardless of the number of trades that took place during the period in question. also reports that a taskforce made up of 200 officials will be mobilized to monitor tax evasion and tax defaulters who owe the Spanish Treasury 600,000 euros or more, which is significantly down from the previous threshold of 1 million euros. This effort will be assisted with the creation of a framework for supplying VAT information immediately. The list of countries designated as tax havens will also be expanded as the Spanish government looks to block all available loopholes for tax avoidance.

In July, CCN reported that five countries namely, the UK, US, Australia, Canada and the Netherlands created the Joint Chiefs of Global Tax Enforcement (J5) partnership aimed at combating transnational tax evasion and money laundering.

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Kenyans Pay Local Restaurant Bitcoin for Meals and Classes on Cryptocurrency

Mount Kenya provides visitors with a picturesque appeal reminiscent of the ambiance in a world of utopia. Beyond the charm and aura lies a tech-savvy Kenyan restaurant that has  incorporated  cryptocurrencies for facilitating payment.


Betty’s place puts its culinary skills into effective use in “nyama choma,” a tantalizing goat meat barbeque that many Kenyans savor.

Situated in the rural town of Nyeri, roughly 150km (90 miles) from the sprawling federal capital, Nairobi, it is one of the few startups in the country that has embraced blockchain technologies by allowing customers make payment with two cryptocurrencies – Bitcoin and Dash.


The Proprietress of the restaurant enthused on her ability to latch onto the big picture.

“Since the world is becoming more global, my place is also becoming a global restaurant,” she said.


The dividends of her ingenuity include the traffic of visitors who stop by at her restaurant from different parts of the world.


“I attract different customers from different parts of the world, whichever coin they have. As long as it’s a viable coin, we accept it.”


Ms. Wambugu ventured into trading in Bitcoin some years back, and within the space of 24 months, her working capital became large enough to purchase the two-story Nyeri hotel which she renamed Betty’s Place.


Strategically located along Nyeri’s major road axis, Betty’s Place has a commanding aesthetic appeal with its bright mustard-colored walls and magnificent windows. The design itself is a luring invitation to the libido that wells in the stomach. Hungry patrons fall to the bait of such irresistible aroma of meat on the grill. When you add the melodious symphony of the Kenyan orchestra, you can imagine why many have found the place as a resort.


Bitcoin Tutorials

Betty’s Place is not just a place where you enjoy the unique culinary cuisine of Kenyans, and it is also becoming a citadel for learning the rudiments of Bitcoin. Ms. Wambugu prides herself as a crypto-currency pioneer, and it will be out of place if she is faulted since she is putting her nous into effective use.


She introduced tutorial sessions on bitcoin for interested individuals, and the classes hold every Sunday at her restaurant.

“I’ve set aside one day where I can teach my customers. Whoever asks about cryptocurrencies: How does it work? What is Bitcoin? I train them.” she said.


Blockchain Technology Used In Housing Scheme

Cryptocurrency adoption in Kenya keeps rising despite a recurrent warning by the country’s apex bank, advising its citizens on the dangers of dealing with digital assets. While the country’s central bank has warned citizens against cryptocurrencies, the State’s Housing and Urban Development has rolled out plans to incorporate blockchain technology for the distribution of Government housing units.


The latest innovation is aimed at developing a scheme that will efficiently allocate houses using sophisticated ledger for proper management.

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Australian Stock Exchange to Roll out Blockchain Settlements in 2021

Australia’s leading market operator, ASX Limited disclosed plans being put in place to release blockchain technology for settlements in 2021. The company, however, does not feel overwhelmed by the deja-vu that has trailed the nascent technology, according to a Bloomberg report.


ASX Limited has subscribed to the Clearing House Electronic Subregister System (CHESS) over the years but is now ready to replace it with the more novel and innovative blockchain, a digitized, decentralized and distributed ledger technology. The overhauling is part of the exchange’s upgrade which deputy chief executive officer Peter Hiom described as an approach that has barely deviated from the norm.

CHESS is still being used to facilitate the legal ownership of a security from a seller to a buyer and also for processing monetary transactions involving the two parties. In spite of being an electronic book register, the innovation which blockchain is expected to bring on board will yield more efficiency.


“We’re not entering the fourth dimension here,” Hiom stated in an interview.


“It’s a database that lets you do a bunch of things more efficiently than you can do at the moment.”


Blockchain application should provide the required backup ensuring data are kept up to date and synchronized in such a way that removes the inconsistency. Hiom attested to this fact saying:


“There is a blockchain that is synchronizing my data store with yours, but the data store itself is a database that exists today. The innovation is the decentralized ledger that lets a client see ASX’s data. It’s taken an awful lot of risk and cost out of your back office because it is never the case that what you’ve got doesn’t match what I’ve got.”

Meanwhile, the Australian Stock market today closed 0.2% lower at 5269, recording a decline for a fourth consecutive season. The recent slump has been ascribed to the fall in the price of crude oil and plummeting shares of some other notable companies on the exchange.


While ASX executives are not willing to make any fuss about their imminent transition to the blockchain, there are a good number of other organizations who see such development as a big deal that could help ease the process of stock issuance and trading.


Earlier this week, Canada’s stock exchange operator TMX Group Limited adopted distributed ledger technology in clearing and settling securities on an integrated platform which is part of a more significant project known as the Jasper Research Initiative.


ASX sees it as an improvement but not necessarily as a feat. “It’s a very clever architecture, but it is just a database architecture. It doesn’t sound very sexy when you say it that way, but that’s kind of what it is,” Hiom added.

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Shark Tank’s Kevin O’Leary Invests $100,000 in Bitcoin Investing App

For several decades, banks and financial advisors have searched for ways to get those without vast resources to invest and save their money. An early example was Bank of America’s Keep the Change program, which rounded up purchases and moved the change to savings accounts.


The Need for Passive Investment

A few years back, the Lawnmower app came to fruition, enabling users to do a similar thing, except their spare change went to buy a small amount of Bitcoin. It later expanded to allow for numerous blockchain assets, though it is no longer available. In the traditional investing space, the Acorns app is all the rage, enabling users to do the same thing with the traditional stock market.


Everyday Americans have been increasingly interested in venture capitalism since the dawn of the dotcom boom, and CNBC’s Shark Tank, now in its tenth season, while a poor example of how VC meetings go, has the popularity to demonstrate this fact. Occasionally, technological innovations cross the stage of Shark Tank, and this week’s episode featured a creation of interest to crypto enthusiasts: the Bundil app, a Lawnmower-style application that enables users to invest their spare change in cryptocurrency.

Passive investment options like Bundil and Acorns are an important part of the 21st-century financial landscape. In the past, the best an everyday person could do was hire someone they hoped could manage their money successfully. Too many examples of fraud and theft took place in that era to list. Whenever you put a great deal of value in a centralized location and give one person or a small group of people in full control of it, bad things can and will happen. The era of the blockchain makes such instances rarer.


Kevin O’Leary Goes in for $100K



Of Shark Tank’s investor lineup, Mark Cuban is the most likely to invest in blockchain technologies. However, already having money in several including the untraceable messaging platform Dust and being an advisor on the Mercury protocol, he said he’s already invested in a similar platform to Bundil and passed on the offer.


Perhaps the heel of the show, Kevin O’Leary is often mocked by his fellow Shark Tank investors and rarely actually strikes a deal on the show. Being that all the other sharks backed out, O’Leary was Bundil creator Dmitri Love’s last hope. Love was offering a 10% stake in his company for $100,000, thereby valuing the application at $1 million.

O’Leary asked a surprising question for a balding millionaire investor: “Which cryptos does it support?” Love responded that it supports Bitcoin, Litecoin, and Ethereum. O’Leary was no nicer to Love than he is to anyone, and demanded 50% of the company in exchange for $100,000, effectively devaluing the company by 80%. He said, “You are going to fail within 36 months.” Matt Higgins suggested that Love should partner with existing exchanges to expand his reach, and Cuban notably said this was a good way to kill the business while trying to grow it. Higgins said that competing products were too easy to build.


After all the other sharks had backed out, O’Leary reiterated that he would be a 50/50 partner at $100,000, or he would also back out. Love seemed displeased with the offer, noting that “50% is a lot,” but ultimately accepted the investment from Kevin O’Leary. This effectively means that Bundil now has the star power and reach of a famous investor.

Love created Bundil as an answer to friends and family who continually pestered him about the perils of investing in cryptocurrency. It’s hard to convince people that they should risk real money on something they hardly understand. Acquiring Bitcoin and other cryptocurrencies comes with its own set of hurdles, so by the time an only-casually-interested party gets to where they can actually buy some coin, they’ve probably lost interest. In this way, passive investment apps are extremely important for the viability of cryptocurrency as a whole.


Love told the sharks:


“I thought, ‘Man, you know, anyone that’s trying to invest in cryptocurrency has to go through all these steps to try to figure out how to buy it. And I thought there could be an easier way for it to be done.”


Bundil costs $3 per month or $24 per year. It connects to your chosen payment method and slowly grows your Bitcoin balance. For those cautious or cash-strapped, it and other similar methods are potentially the only realistic way to introduce themselves to the important new world that is cryptocurrency.

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Logistics Firm Completes First Truckload Shipment Using Bitcoin Smart Contracts

DexFreight, a blockchain start-up that is building a freight transportation platform using Rootstock (RSK), has announced that it successfully facilitated a shipment of frozen food between Medley and Sunrise, Florida. DexFreight’s smart contracts, which rely on the Bitcoin blockchain rather than the more-often used Ethereum, enabled the successful delivery and automated the payment to the carrier, Arel Trucking.


From their press release on the subject (emphasis added):


“For this first truckload shipment, dexFreight partnered with Netuno USA, one of the fastest growing seafood wholesalers, Arel Trucking, Inc., an asset-based motor carrier with over 180 trucks, and RSK, the first smart contract platform secured by Bitcoin. Funds for the transaction were held in escrow by the smart contract on the integrated RSK platform and were automatically released to the carrier upon delivery.“


This last part is perhaps the most important part for the trucking industry. In two respects, it represents major possibilities. The first respect is that carriers who down the road integrate the technology can be paid reliably. The second respect is that of transparency and competition. Although the platform is nascent, it could eventually develop into a thriving and competitive market where smaller outfits can compete for business they could not have previously procured due to the tendency of shippers to stick with who they know.


A merit-based system where real-time statistics of delivery times, damages, and the like would give any company an equal chance at competing for business. Moreover, smaller outfits that cannot necessarily wait weeks or months for contracts to be paid out would no longer have to do so, and bidding becomes a realistically easy process — potentially as easy as sending an e-mail.

The truckers appear to be excited about the prospect, with Arel Trucking CFO Robert J. Julia being quoted as saying:


“dexFreight solves the issue of false documentation by making our transactions with shippers completely transparent, and so we can get paid for the service we provided. This technology is the way of the future for the whole trucking industry.”


Decision to Use RSK/Bitcoin Instead of Another Token Platform



An immutable ledger such as the Bitcoin blockchain (or any blockchain with sufficient hashrate/security) presents important possibilities for various industries, especially those which involve the moving and tracking of physical goods. While on a consumer level this means knowing beyond a shadow of a doubt where one’s package is or where your home goods are when you move, on an industrial level this means a much more robust ability to track performance and productivity. Trucking and shipping companies in particular stand to benefit from the transparency of an immutable ledger.


A ledger in and of itself isn’t good for much beyond tracking transactions, generally of a monetary sort. However, when you build on smart contracts, basically anything is possible. This is the model that Ethereum  followed, building the Ethereum Virtual Machine from the outset complete with its own Turing-complete programming language so that it could process more than just transactions.

The popularity of the Ethereum platform incentivized the development of numerous other token platforms, from NEO (general purpose) to WaltonChain (aimed at industries which use RFID tracking technology). It has also encouraged developers to create smart contract platforms which could harness the amazing power of the Bitcoin blockchain itself — possibly the most powerful computing platform in history (and perhaps one of the most expensive to use, historically speaking). RSK  is one such platform, and it is the basis of the dexFreight application. Another option developers can consider is Qtum, which is the Ethereum Virtual Machine adapted to run on the Bitcoin network (the best of both worlds.)


Such platforms work in a similar way to Ethereum. The base token of the platform is required to operate smart contracts and applications on their network, and these are generally exchangeable for the blockchain’s native token — in the case of Rootstock, Bitcoin.

The dexFreight platform itself, as a service, plays an important role to both consumers and providers in the freight transportation industry. Firms can pay a fee to the dexFreight network to have the tokens they’ve earned exchanged into fiat cash. As a result, the barrier to entry is drastically lowered. Another important service that they are developing is the use of machine learning to help clients select providers.


“The way of the future for the whole trucking industry,” among several other industries, indeed.

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The Next 10 Years: Crypto Market to Eclipse $20 Trillion as Bitcoin’s Influence Fades

It’s been 10 years since bitcoin creator Satoshi Nakamoto published his white paper on bitcoin, and the global economy hasn’t been the same since. The original cryptocurrency now boasts a market cap of more than $112 billion, while bitcoin’s dominance hovers at more than 53%.


But if you ask Nigel Green, founder and CEO of financial advisory firm deVere Group, which boasts $10 billion in AUM, the next 10 years will look a lot different than bitcoin’s first decade. He’s quick to attribute the “crypto revolution” to bitcoin, saying that it has changed the way money is transacted forever. Green’s outlook, however, is a mixed bag, with bitcoin’s “influence and dominance of the cryptocurrency sector” expected to “drastically reduce” while the value of the broader crypto market is poised to expand by 5,000%, which would attach a combined market cap of $20 trillion in the coming decade. Green stated in a press release:


“[While] I don’t wish to rain on anyone’s parade, I believe that Bitcoin’s influence and dominance of the cryptocurrency sector will drastically reduce in its second decade. This is because as mass adoption of cryptocurrency grows, more and more digital assets will be launched – by organizations in both the private and the public sectors. This will increase competition for Bitcoin and dent its market share.”


Ripple (XRP) and ETH to Steal Bitcoin’s Shine


Source: CoinMarketCap

Green, whose firm is based in Dubai but has offices around the world, pointed to other reasons for the forecast, such as better technology, features, and solutions to problems that competing cryptocurrencies will provide, coins like ripple (XRP) and ethereum. He told CCN:


“I believe that…XRP will be one of the main digital assets to dent Bitcoin’s market share over the next few years due to its apparent focus on integrating with banks and other financial institutions.”


XRP already muscled ETH out of the No. 2 spot for cryptocurrencies on CoinMarketCap more than once this year, though it has since fallen back to the No. 3 spot. Meanwhile, despite the fact that ETH has fallen out of favor with the crypto community of late, Green remains bullish on the future though he falls short of calling for a “flippening” event.


“Another one would be its current main challenger Ethereum.  This is because a growing number of platforms are adopting Ethereum as a means of trading; there’s an increasing use of smart contracts by Ethereum; and due to the decentralization of cloud computing.”


Even if bitcoin’s dominance fades, Green says there is a clear shift among retail and institutional investors away from fiat money and into crypto, one whose momentum will only intensify in the coming decade. As a result, he expects “the market will have grown beyond recognition when Bitcoin celebrates its 20th anniversary.”

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German Court Ruling Raises Questions about Bitcoin’s Legal Status

Until recently, Germany’s Federal Financial Supervisory Authority (BaFin) classified bitcoin as a financial instrument, but a subsequent court ruling disclaimed this categorization and decided that the cryptocurrency does not meet this definition under the terms of the German Banking Act (KWG).


Bitcoin Unrecognizable to German Legal Framework

The Berlin Court of Appeal in September dismissed a criminal proceeding against the operator of a local bitcoin trading platform. The German enforcement had arrested the administrator for facilitating the trades of financial instruments like bitcoin without obtaining a BaFin permit. While the Berlin-Tiergarten had sentenced the accused for providing financial services, the Berlin Regional Court reversed the judgment, stating that BaFin misinterpreted the legal status of bitcoin. According to Mondaq, The 4th Criminal Division of Berlin Court of Appeal favored the regional court’s ruling, confirming that the German regulators extended the scope of criminal law to bitcoin without synchronizing it with the banking acts.


Citing Section 1(11) of the KWG, the appeal court stated that neither the central bank nor any public authority issues bitcoin. The digital currency lacks general recognition and a stable value that could allow its use to compare goods or services. Therefore, it cannot gain the status of units of account – or financial instruments — contrary to what was enforced by the BaFin in May 2018.


The judgment also shed light on the matters related to the sale and purchase of bitcoin in Germany. The court, reading Section 1(32), ruled that bitcoin trading is not subjected to permits or licenses, and consequently – per Section 1(54) – was not a criminal offense. Due to these facts alone, BaFin couldn’t extend the scope of criminal penalties on the accused.


The appeal court also criticized the financial regulator for crossing the boundaries of federal authorities, stating that it was not their responsibility “to exercise a modifying influence (in particular) on criminal laws.”


Regulatory Inconsistencies Deepen


BaFin had classified bitcoin as a financial instrument. Following a recent court ruling, however, its legal status is less clear.

The court ruling has deepened the inconsistencies in the ways each European country interprets bitcoin law. The European Union has passed a motion in 2016 that enabled taxation of cryptocurrency holdings, investments, and profits. The provision, however, didn’t settle any definition for cryptocurrencies as a whole. Individual countries in the Eurozone awarded bitcoin a legal status in their jurisdictions, but the digital currency never attained a particular Europe-wide regulatory framework for itself.


Jörg von Minckwitz, President of Bitwala, a blockchain banking service based out of Germany, believes each European country should get on the same page before writing the first bitcoin bill.


“In the past years, Bitwala has repeatedly spoken out in favor of legal clarity and a regulatory level playing field in the EU,” he said in a statement provided to CCN. “As digitization affects society across borders, this can only be done in unison. Currently, every EU country seems to have their interpretation, which results in regulatory arbitrage to the detriment of German consumers and innovators.”


BaFin, after the court ruling, cannot penalize people holding or trading cryptocurrencies unless it joins hands with lawmakers to create new legal provisions to modify the KWG. As for now, bitcoin and similar digital assets will be subjected to European regulations.

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5 Reasons Why VanEck’s Bitcoin ETF Should be Approved by the SEC in 2019

At a meeting with the US Securities and Exchange Commission (SEC) commissioner Elad L. Roisman, representatives from SolidX, VanEck, and CBOE presented five major reasons why the commission should approve the Bitcoin exchange-traded fund (ETF) filing of VanEck and SolidX.


VanEck, an investment management firm headquartered in New York that has decades of track record in the traditional finance sector and hundreds of ETFs filed under its name, outlined the following points the SEC should consider in approving its Bitcoin ETF:


There now exists a significant regulated derivatives market for bitcoin

Relevant markets – CBOE, bitcoin futures, OTC desks – are regulated

Concerns around price manipulation have been mitigated, consistent with approval of prior commodity-based ETPs

CBOE’s rules are designed to surveil for potential manipulation of Trust shares

Promotes investor protection

Significant Volume and Trading Activity in the Futures Market

Previously, the SEC rejected the Winklevoss Bitcoin ETF primarily due to its reliance on a public cryptocurrency exchange in Gemini to find the base price of BTC. The SEC deemed cryptocurrency exchanges to be insufficiently regulated and liquid to handle an ETF.


As a response to the rejection of the Winklevoss Bitcoin ETF, ProShares and two other companies filed 9 ETFs, basing the BTC price of the ETFs on the futures market operated by CBOE and CME Group. At the time, the filling of ETFs by the three companies was considered a smart move as it considered the SEC’s concerns regarding cryptocurrency exchanges.

However, the SEC rejected the 9 ETFs and stated that the futures market is not of significant size to support an ETF.




During its presentation, VanEck, SolidX, and CBOE representatives told the SEC that the futures market is able to handle the operation of an ETF through the Depository Trust & Clearing Corporation (DTCC), which was especially relevant given the involvement of CBOE in the filing.


VanEck also emphasized that the approval of an ETF would reduce counterparty risk for investors and it would provide a simple solution for investors seeking price exposure, by increasing the stability of the market.


“As of now, no CCPs support the clearing of bitcoin Investors are left facing absolute counterparty risk. Such risks are often unacceptable to many investors An ETF provides a straightforward solution for investors seeking price exposure without facing counterparty risk, as the ETF would be cleared through DTCC Furthermore, in creations and redemptions, the Trust always requires APs and trading counterparties to settle their leg of the trade before the Trust will do so.”


The claim of VanEck directly supports the statement of SEC commissioner Hester Peirce, who previously stated that the current structure of the cryptocurrency exchange market only allows a selected group of investors with specific know-how and knowledge in the market to trade and benefit off of the liquidity in the market.


“This complexity means that only a very particular type of investor can pursue the diversification opportunities such assets can provide. Entrepreneurs are developing new products through which people can access cryptocurrencies indirectly or hedge their cryptocurrency holdings. Bitcoin futures, for example, began to trade recently,” she explained.


VanEck Has the Highest Chance

Throughout the past several months, analysts have given VanEck and SolidX the strongest chance of having an ETF introduced in US markets given the history of VanEck in successfully filing hundreds of ETFs with the SEC.

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Why New Generation Stablecoins are Crucially Based on Ethereum

TrueUSD (TUSD), Circle Coin (USDC), Gemini Dollar (GUSD), and Paxos (PAX), new generation stablecoins competing against Tether (USDT), are all based on the Ethereum blockchain network.


Crucially, all of the three above mentioned stablecoins are fully audited, transparent, and regulated, which allow them to obtain stable banking services and guarantee the ability of consumers to redeem the tokens based on a 1:1 ration with the US dollar.


Ethereum-Based Tokens

Deploying a stablecoin on top of the Ethereum blockchain protocol instantaneously improves the compatibility of the asset with existing infrastructure. For instance, users of GUSD, PAX, and TUSD can utilize hardware wallets like Trezor and Ledger along with software wallets such as Metamask to send and receive stablecoins.


“Improved send and receive. Two Ethereum wallets can quickly send and receive any amount of USDC at any time of day. Large transfers for business purposes become as easy as small e-commerce payments. Consumers can use the Coinbase app to send USDC to someone, while remaining confident the value is stable,” the Coinbase team explained, which recently integrated USDC with Circle.

It also allows exchanges to easily integrate stablecoins without the necessity of creating a new infrastructure to support stablecoins.


The Coinbase team emphasized that the usage of the Ethereum blockchain network enables developers to program the dollar, which allows fintech companies to develop programs that can easily and securely facilitate stablecoin transactions.


“A programmable dollar. For developers and fintech companies, a digital dollar like USDC is easier to program with. For example, given the private keys for USDC, a program can easily send and receive them back and forth using the public Ethereum blockchain.”


Most importantly, with stablecoins launched on Ethereum, users can track the circulation of the tokens with block explorers like Etherscan. Because the tokens are stored in smart contracts, users can track the amount of US dollars stored in a particular stablecoin, increasing the overall transparency of the currency.

Subsequent to its launch, the Gemini team heavily emphasized the fact that GUSD is built on the Ethereum network with compliance with the ERC20 token contract standard, due to the various benefits the compatibility with Ethereum can provide.


“To date, there has been no trusted and regulated digital representation of the U.S. dollar that moves in an open, decentralized manner like cryptocurrencies. Enter the Gemini dollar — a stable value coin (often called a “stablecoin”) that is (i) issued by Gemini, a New York trust company, (ii) strictly pegged 1:1 to the U.S. dollar, and (iii) built on the Ethereum network according to the ERC20 standard for tokens.”


Cryptocurrency is in a Growth Curve

The cryptocurrency market and industry are in a growth curve. In the years to come, as infrastructure surrounding the cryptocurrency market strengthens, opaque, inefficient, and unregulated platforms, assets, and projects will be replaced with more practical, transparent, and regulated alternatives.


The stablecoin market has seen the emergence of new competitors against Tether that are transparent, regulated, and compliant with the existing infrastructure in the market.

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Unocoin Co-Founder Arrested Over Non-Functional Bitcoin ATM in India

Indian authorities have arrested the co-founder of Unocoin, an upstart Bitcoin exchange in India.


According to Times of India, Harish BV, co-founder of Unocoin, was taken into custody for illegally operating the “first” Bitcoin ATM in the world’s second-largest nation, located in Bangalore. The BTM was located in the Kemp Fort Mall.


Bitcoin ATM Not Even Working At Time of Arrest

As earlier reported, Unocoin had been taking baby steps in the implementation of its cash-to-coin (and vice versa) operations. They wrote on Twitter:


Our Machine didn’t go well with few mainstream media reports who projected it under a negative light. The machine is still under final testing mode and it will be up and running in the upcoming week.


People in the cryptosphere are no strangers to the dangers of toxic misinformation. Another founder of Unocoin, Sathvik Viswanath, told the media that the BTM was not actually even running at the time of Harish BV’s arrest. It was in “final testing mode.” A likely source of the police involvement was mall management, as according to Viswanath, the mall’s management had recently become uneasy about the BTM’s presence.


The reason for panic is because of fake videos on Kannada and English channels. Due to this, our kiosk is not operational. We’ve been trying actively to get these videos pulled down.


The Struggle Ahead for Crypto India

Bitcoin and other cryptocurrencies are hardly new, but every country and culture have taken their own paths to adoption and acceptance. Government policy on the subject is extremely important in this regard, and the Indian government appears to be like most governments: decidedly not in favor and in some ways vehemently against. Viswanath pointed to specific remarks from earlier this year from the Indian Finance Minister Arun Jaitely specifically stated that bitcoins are not “legal tender” in India and that the government would work diligently to prevent cryptos from being used in “illegitimate” activities.


Viswanath is quick to point out that not qualifying as legal tender does not make Bitcoin an illegal asset.


The minister’s statement was clear: cryptocurrencies are not legal tender in India. He did not say ‘illegal tender.’ There’s a huge difference. It means you bear the risk of your investment and there’s no regulation for the industry.


Nevertheless, a crypto businessman sits in jail today, with local police using the media to discourage people from engaging in Bitcoin activity and promising more arrests. His firm offers an Android wallet, a liquid market for Ether and Bitcoin, and it is with some degree of irony that as recently as June they were writing in defense of US regulatory practices as regards Bitcoin.


Like anything else, government over-reaction to cryptocurrencies and bullying leads to black markets, which are exactly the sort of thing the government has promised to mitigate. As such, the Indian LocalBitcoins market appears strong, with apparently better rates for acquisition. LocalBitcoins is more of a “gray” market, with peers incurring their own risk in making in-person trades on a daily basis the world over.

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Tether Market Cap Goes Sub-$2 Billion as Coinbase Stablecoin Steals the Show

Tether (USDT), the controversial USD-backed cryptocurrency that has long been the most popular “stablecoin,” continues to shed market share in the wake of its descent below dollar parity.


Tether Market Cap Drops to January Low

The tether token, which as recently as Oct. 9 had a market cap of $2.8 billion, now has a total valuation of less than $2 billion, representing an intramonth decline of approximately 29 percent. The last time USDT had a market cap below $2 billion was in January when the token eclipsed that threshold for the first time.



USDT Market Cap | Source: CoinMarketCap

The decline has largely been the result of a stampede of USDT redemptions, spurred by a combination of the token’s discount to its supposed $1.00 value, increased competition, and concerns about the stability of the issuer’s banking relationships.



Source: Omni Explorer

The latest redemption occurred on Tuesday when cryptocurrency exchange — and close associate of Tether Limited, the USDT token’s issuer — Bitfinex sent 50 million USDT to the Tether treasury address, indicating that those tokens had been redeemed for their nominal value of $50 million. Nearly 800 million USDT have been yanked from circulation in October alone, and just under 1 billion tether tokens are now sitting in the treasury address.


USDT Creeps Toward $1.00 But Still Trades at Discount


USDT/USD | Kraken | Source: TradingView

Meanwhile, the tether price has made a marked recovery since briefly dropping to $0.92 on Oct. 15. According to CoinMarketCap, USDT is priced at a global average of $0.987, though the token continues to trade as low as $0.97 on Kraken and other exchanges that offer direct pairs against physical USD.


Overall tether trading volume has also declined since the token dipped below $1.00. While USDT remains the second most traded cryptocurrency (trailing only bitcoin) with a daily volume of $1.8 billion, it has seen a steep drop off from the $3 billion+ in daily volume regularly experienced throughout late September. That said, aside from the flurry of trading that occurred in the 48 hours surrounding the loss of tether’s USD peg, the decline in USDT trading volume has largely tracked its decline in market cap.


Could Tether Itself be Redeeming USDT?


Tether redemptions have intensified in the week since USDT fell below $1.00. | Source: CoinMarketCap

Mike Novogratz, the billionaire former hedge fund manager and founder of cryptocurrency merchant bank Galaxy Digital, recently said that Tether had created a lot of its own problems by operating with an insufficient degree of transparency compared to newer competitors such as Gemini Dollar (GUSD). Nevertheless, he stressed that the rapid decline in the circulating USDT supply through redemption is an “important” signal that, as he said that he believes, the token is fully-backed by physical dollars.


Research from pseudonymous cryptocurrency analyst Hasu and Three Arrows Capital CEO Su Zhu has speculated that the redemptions may even be coming from Tether itself, which could be buying up discounted tokens and then internally crediting itself with the full $1.00 per token. This could be occurring for any number of legitimate reasons, ranging from profit-seeking, the desire to help USDT return to dollar parity, or even a long-term plan to unwind the firm’s stablecoin operation altogether.


They wrote:


“I know of several ‘non-Tether’ arbitrageurs, so Tether is certainly not the only one at it. But it’s not conceivable to me that $600M would have been withdrawn from Bitfinex in such a short time frame. If my assumption is correct, Tether is buying up USDT on the market for a discount, retiring them and internally crediting itself $1. That is fine and there is nothing shady about it. It’s no different from public companies buying back their shares when they think the market undervalues them relative to their fair price.”


Bitfinex, notably, has called the analysis “surprisingly fair given the multitude of accusations we face,” according to remarks cited in  CoinDesk.


Supporting this analysis is the fact that while tether’s stablecoin competitors have seen large inflows since their respective launches, many more dollars have been pulled from the market via USDT redemptions than have entered through other stablecoin issuances. That’s particularly significant considering that most of the major tether competitors are trading at $1.01.


Tether Sheds Market Share amid Increased Competition

However, over the long term, it would not be surprising to see USDT eclipsed by one or more of the new crop of “regulated” stablecoins, namely USD Coin (USDC), Paxos Standard (PAX), Gemini Dollar (GUSD), and TrueUSD (TUSD) — the latter of which launched earlier this year.


Most recently, crypto-kingmaker Coinbase announced that it would join fellow fintech unicorn Circle as a founding member of CENTRE, the consortium that governs the issuance of the dollar-backed USDC cryptocurrency. As such, traders can now buy and sell USDC through Coinbase’s popular brokerage service, giving the token a leg up on its peers, particularly PAX, which had taken an early lead in the post-September stablecoin sprint.

According to CoinMarketCap, USD Coin now has a market cap of $85 million, making it the largest of the three major stablecoins launched in September and the 71st-biggest cryptocurrency overall. Most of that increase has come in the day following Coinbase’s announcement, enabling the token to vault past Paxos Standard and its $79 million market cap.

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