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Blockchain for 35 Million Users: Korea’s Biggest Insurance Firm SK Partners With ICON.

ICON, South Korea’s most valuable blockchain project, has partnered with the country’s biggest telecommunications conglomerate SK, to possibly utilize blockchain technology and crypto in compensating users of its mileage system.


SK Planet, a subsidiary of SK that signed a memorandum of understanding (MoU) with ICON, operates the most widely utilized mileage system in the country that has nearly 35 million users, more than half of the country’s population.




In the months ahead, SK Planet is expected to collaborate with the ICON team to utilize its blockchain technology in supporting mobile services as well as its mileage system OK Cashbag.


Monumental Partnership

In July, Hani, a mainstream media outlet in South Korea, reported that OK Cashbag, the mileage system of SK, has initiated the process of developing a blockchain-based system to handle mileage payouts and various business models.


“OK Cashbag has approved the initiation of OKX Project, a blockchain technology-based project, and is currently in a phase of reviewing various business models and incentivization methods. But, SKPlanet will not engage in any initial coin offering (ICO) or fund raising pertaining to OKX Project,” Hani reported.




At the time, SK Planet did not provide any additional information on the technical intricacies of its blockchain project nor any partners the company intends to work with to streamline the process of integrating blockchain technology into its existing infrastructure.


The MoU signed between ICON and SK Planet has demonstrated the long-term strategy of SK to actively pursue its plans to integrate blockchain technology. Experts have suggested that the partnership between ICON and Line, one of the biggest messaging apps in Asia, encouraged SK to work with ICON to release its first blockchain product.


J.H. Kim, the council member of ICON Foundation said:


“Through cooperation with SK Planet, which has OK Cashbag and Syrup services already being widely used by the public, ICON will keep up the hard work to popularize blockchain.”


SK Planet executive JM Park added that the conglomerate will cooperate with small and medium-size enterprises to commercialize the blockchain across Asia. He explained:


“Blockchain appears to be one of the key technologies that will promote market transformation in existing industry for the medium and long term. SK Planet will work with ICON to derive synergies in various fields so that we can offer differentiated benefits to our customers.”


Major Conglomerates are Going Full Crypto and Blockchain

In South Korea, LG, Samsung, SK, and many other multi-billion conglomerates have continued to show increasing interest towards the blockchain, possibly due to the acknowledgement of the technology the government of South Korea as one of the three pillars of the fourth industrial revolution, alongside AI and big data.


Samsung has been operating a foundry to manufacture crypto ASIC miners, SK has financed major cryptocurrency exchange Korbit, and Kakao has been supporting Upbit, the country’s largest cryptocurrency trading platform operated by Dunamu.




The partnership between ICON and SK Planet can be considered as the first major step towards materializing the plans of the conglomerate of utilizing crypto to compensate the users of OK Cashbag mileage system.

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Crypto: Is Relative Value Investing Time Finally Here?

For at least the past six months you have been kind enough to listen while the topic of relative value in cryptocurrencies has repeated more than once.  Could it finally be happening? Things are certainly in place. It seems to show every time the price of Bitcoin or any of the altcoins suddenly spikes for no apparent reason.


That is the time when investors buy crypto simply because there is no better value in things like stocks, bonds, real estate, gold or currencies.  So far this has not happened all that often, but things could finally be changing. The fact that crypto prices remain near 2018 lows, and with certain exceptions, the news has been pretty good, helps set the stage.


Until now investors in conventional assets have been simply too content.  And why not, the economy in the US is humming at a 4.2% annual rate. The S&P 500 has tacked on another 8.5% so far and seems to be cruising through the traditionally volatile month of September to reach new records.  


And here is the real tattle tale, the CBOE VIX is near 2018 lows around 11. Without going into all the details, the VIX is Wall Street’s traditional measure of investor fear.  During the 2008 financial crisis, the VIX hit 60. Back in February it was at 37. That was about the time the S&P 500 fell 10%. So get the idea: today, investors are too content.  That needs to change before crypto’s relative value shines through. Here is something to focus on.


The key to the above average S&P performance has been the contribution of the tech sector. When you take out the near 22% increase from the market cap weighted S&P, well, you cut well over half of that performance down to only about 3%.  That still not bad, but it indicates a far more narrow market than smart investors should be comfortable with. What would happen to the VIX if the tech sector suddenly took a dive of 10%?


Sound crazy? Hardly, a 10%+ correction in tech stocks has taken place three times just since 2016, so this isn’t a far fetched idea.  In fact Barbara Kollmeyer at MarketWatch just penned an article titled: Bad news is building for this once-hot tech sector.  If her views prove out, this could be the key to driving investors to some of the values offered by crypto.


It all starts with the social media companies that form the backbone of the FANG stocks. Here is a sample. She opens with the thoughts of Tony Greer who heads TG Macro and who has a sour message on Twitter (TWTR) and Facebook (FB). According to Tony: “It’s finally time to be short social media” pointing out a “massive topping pattern.”


While the stock market generally may not be experiencing traditional levels of volatility, lately tech stocks have charted a different course.  In referring to that change, Greer identifies September as a time of big change.


“That period of volatility put in a big top and a double top in the social media ETF. Now it has broken its steepest ascending trend line, it’s broken down below all the major moving averages and they’re starting to curl over on top of it, which to me is going to cause another leg of a waterfall.”


The final proof of technical weakness is shown in the Global X Social Media ETF that contains a handful of social media names from Facebook, Twitter and Alphabet. This little gauge is actually down around 3% this year.


In addition to his technical observations, he points the negativity surrounding the Cambridge Analytica scandal, subsequent upbeat earnings, then news that the platform was losing users.


Technology Is More Than Social Media

Lest we look for just any reason to be buying crypto it is only fair to mention the obvious. So far this year the tech sector has managed to add 22% even with the substantial underperformance of social media.  Any notion of painting the world coming to an end would be misleading.


However, technology has many interrelated links and sometimes when one sector is under pressure it can spread.  In the meantime the gap between overvalued stocks and depressed crypto prices is setting the stage for the search for value to have its day in the sun. So keep one eye on the VIX.

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How the Recent $60 Million Crypto Hacking Attack Will Impact Japanese Market.

Zaif, a major crypto exchange in Japan, was hacked this week, losing nearly $60 million in user funds in a high profile security breach.


Local publications including Japan Times reported that 6.7 billion yen was stolen by an unknown group of hackers, 2.2 billion yen in corporate funds and 4.5 billion yen in user funds were lost during the breach.




Tech Bureau, the company behind Zaif, told its customers that all of the investors affected by the hacking attack will be reimbursed in cryptocurrencies. Due to the scale of the attack, Zaif reached a deal with Tokyo-based financial markets research firm Fisco, which has given the company 5 billion yen in return for majority stake in the exchange.


“The firm originally said about ¥6.7 billion was hacked, but the actual amount has yet to be confirmed as the server that was attacked has not been rebooted for security reasons,” Japan Times  reported.


What Impact Will it Have on Japan?

In April of last year, the Japanese Financial Services Agency (FSA) implemented strict policies to oversee cryptocurrency exchanges. As a part of a larger initiative, FSA created a national licensing program, requiring crypto trading platforms to file a license to operate within the country.


Recently, the FSA stated that it has decided to expand its crypto team handle a large amount of applications which are expected to be filed by the end of 2018. 160 companies are currently planning to file licenses to operate as regulated digital asset exchanges in the country.






Subsequent to the $500 million security breach of Coincheck, which was triggered due to poor security systems of the exchange, the government of Japan strengthened regulations overseeing digital asset trading platforms. The breach of Zaif is expected to lead the government to implement stricter policies regarding security and internal management systems.




As CCN previously reported, poor security systems employed by cryptocurrency exchanges like Bithumb and Coinrail led the government to legitimize and regulate the cryptocurrency exchange market.


While the government of South Korea refrained from recognizing crypto and blockchain as a legitimate sector, the occurences of high profile hacking attacks left investors requiring investor protection, which the government of South Korea could no longer refuse.


The $60 million hacking attack of Zaif will lead the Japanese government to cooperate more actively with exchanges, leading government agencies to be involved in the security and internal management systems of exchanges to ensure that investor funds remain safe.


In South Korea, the government is considering the imposition of a policy that will require exchanges by law to obtain insurance so that exchanges do not need external capital, similar to the case of Zaif, to cover investor funds.


How Will Japan FSA Respond?

The FSA has stated prior to the Zaif hack that it will add a dozen officials onto the crypto department of the agency. With 160 firms on the waiting list to file applications with the FSA, the agency will most likely revise requirements for companies pertaining to security.

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SEC Director Vows ‘More Substantial’ Enforcement Against Illegal ICOs.

U.S. Securities and Exchange Commission (SEC) co-director of enforcement Stephanie Avakian mentioned in a Sept. 20 speech that the regulatory agency is most likely going to recommend “more substantial remedies” against those who fail to follow proper initial coin offering (ICO) registration requirements in the future


According to a transcript of the speech posted on the SEC’s website, Avakian articulated the specific set of principals that guide the agency’s decision-making when it comes to regulation, and then delved into how the SEC was tackling in “misconduct” in the ICO and virtual asset space.


Balancing The Risks and Rewards of ICOs

In the speech, Avarkian mentioned that the “novelty of ICOs” and the possible “utility of the underlying blockchain” makes these types of offerings exciting for certain investors.


However, she noted  the market “exuberance” for ICOs can mask the reality that they are “often high-risk investments,” since they could lack viable products, have flawed business models, or just simply be “outright frauds.”




According to Avarkian, the SEC has tried to be cognizant about how to deal with ICOs registration cases that are not fraudulent. The agency wants to affirm valid ways to raise money while still making sure investors can enjoy the legal protections already in place.


She noted that the agency has issued a number of public statements to inform investors about concerning activity in the ICO space, particularity highlighting one last November that discussed the rise in ICO promotion by celebrities and other public figures.


Avarkian said the “anecdotal evidence” in the wake of the announcement pointed to a “dramatic decline” in the amount of celebrity-endorsed ICOs.


Overall, Avarkian said any issues related to ICOs and cryptoassets must be in the crosshairs of the Division of Enforcement, and pointed out that current work related to the space and other cyber-related issues was already “paying dividends.”


Staying Active On The Cryptocurrency Front

The recent speech by Stephanie Avakian seemingly caps off what has been a busy week for the SEC when it comes to virtual currency.


The regulatory agency also said on Thursday that they are starting a formal review process for the bitcoin ETF proposed by VanEck and SolidX.




The proposed ETF has made headlines since it would hold actual vitcoin in lieu of virtual currency futures contracts, and would maintain “comprehensive insurance” to safeguard investors against loss or theft of the bitcoin.


Just a couple of days before, SEC Commissioner Hester Peirce, often referred to as “CryptoMom,” asserted that the government should not hold back new products from coming out in the cryptocurrency market due to the perceived weaknesses associated with bitcoin.

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Kraken CEO Powell ‘Thanks’ New York AG For Its Crypto Research.

Jesse Powell, CEO of Kraken, doesn’t like the way the New York State cryptocurrency regulators have treated him, but he doesn’t think their research is without its merits.

After calling the regulators abusive in an earlier tweet today, he followed up by tweeting that the agency’s research in a recently released report has saved his product team a lot of time by providing information on his competitors. He commends the report for its overview of issues and a suggested list of questions for customers to ask.

Powell also thanked New York taxpayers for funding the research. The report, “Virtual Markets Integrity Initiative,” was based on a questionnaire former New York Attorney General Eric Schneiderman sent to 13 exchanges, including Kraken, to completed by early May.

AG Attacks Crpyto Platforms

In tweeting about the report on Sept. 18, the New York AG said they found the cryptocurrency platforms vary significantly in their operations, their safeguards to protect consumer assets and their internal controls. The AG further observed many platforms do not have the necessary policies to ensure integrity, security and fairness, and many have not deployed efforts to stop abusive trading. The tweet also said few platforms monitor bots and automated algorithmic trading on their venues.

In response to the AG tweet, one tweeter asked when they plan to investigate the forex, oil or metals markets.

Report Slams Non-Participants

Besides warning readers about the shortcomings of exchanges in general, the report contains numerous highlighted notes warning people about doing business with exchanges that did not participate in the study, especially Kraken.

One such note said that while the OAG could not review the practices of non-participating platforms including Huobi,, Binance and Kraken, it called the Kraken’s platform’s public response alarming because it said market manipulation “doesn’t matter to most crypto traders” while acknowledging “scams are rampant” in the industry.

Another highlighted note said customers of non-participating platforms should consider the fact that these platforms could have gotten compensated for listing virtual currencies on their platforms, and evaluate if this should impact whether or not they should trade on those platforms.

Also read: New York like an ‘abusive, controlling ex’: Kraken CEO Jesse Powell

Kraken Fights Back

Kraken tweeted that it took exception to the implication that because the company did not respond to the request that the company could be operating illegally.

Kraken also pointed out that the report was published the day before the CBOE futures contract expired, and wondered what actions were being taken to prevent manipulation by the AG.

While Kraken was among the cryptocurrency companies that left New York after the state adopted its “BitLicense” regulatory framework in 2015, the AG report nevertheless alleged Kraken could be serving the New York market illegally.

Kraken further noted that the New York Department of Financial Security knows the exchange left the state in 2015 and has no clients in the state and is therefore not under the department’s jurisdiction.

Kraken was not the only exchange not active in New York to receive the OAG questionnaire, but Powell was unusual in his willingness to protest it. He even criticized other exchanges that responded for “kowtowing” to the regulators’ demands.

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Charlie Lee Defends Litecoin Against ‘FUD’ from Short-Sellers.

Litecoin creator Charlie Lee is striking back at what he calls a “concerted effort to suppress” the LTC price on the party of bearish traders and hedge funds who are attempting to short the coin.

Writing in a thread posted on Twitter, Lee — who created LTC in 2011 and now develops it full-time — said that he wanted to clear up “FUD” circulated by groups that “see Litecoin as a threat.”

Lee was apparently responding to an explosive report from cryptocurrency hedge fund Multicoin Capital which, among other things, said that litecoin was a “significantly overvalued” and a “relic” from an earlier period of cryptocurrency development.


In the report, which was authored by managing partner Tushar Jain, Multicoin laid out its justification for being short LTC, alleging that the coin faces a number of “negative catalysts” without a sufficient number of bullish factors to offset them.

Specifically, Jain alleged that the cryptocurrency market is maturing and that assets like litecoin that — in his view — do not have compelling use cases will be left out of the next bull rally.

He further argued that litecoin faces severe sell pressure, not only from LTC mining but also from cryptocurrency mining firm Bitmain, who is reportedly sitting on upwards of 1 million LTC while also actively promoting bitcoin cash, a coin that is competing with litecoin to be the cryptocurrency of choice for everyday payments.

Charlie Lee Litecoin

LTC creator Charlie Lee | Source: YouTube/Crypto Channel

Responding to these criticisms and others, Lee argued that, unlike many altcoins, LTC is incredibly secure due to the fact that it is the dominant coin that uses the Scrypt mining algorithm, making it unprofitable for miners to attack the network.

He further said that, far from rendering litecoin obsolete, the advent of second-layer scaling solutions like the Lightning Network (LN) will further support LTC, since they render the coin interoperable with bitcoin.

“Litecoin will always be the cheapest and fastest on ramp to Lightning Network. And with solutions like submarine swaps, you can use on chain LTC to pay for a BTC lightning invoice!” he said. “We will also have decentralized exchanges using atomic swaps. The possibilities are endless”

At present, litecoin is the seventh-largest cryptocurrency with a circulating market cap of $3.2 billion. LTC is trading at $54.75, which represents an 85 percent decline from the coin’s all-time high at $375.29, per data from OnChainFX. Though stark when viewed in isolation, that performance is comparable to the wider large-cap cryptocurrency index, with most major altcoins having experienced peak-to-trough declines ranging from 77 percent to 96 percent.

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Bitcoin Price Intraday Analysis: BTC/USD Gaining Towards $6500-Fiat.

Bitcoin on Thursday improved its bullish bias by rising over 1.5 percent against the US Dollar.

The BTC/USD on BitFinex is trading at 6421-fiat while continuing its bullish retracement from 6100-fiat, our intraday low. The pair kickstarted the Asian session while forming lows towards 6382-fiat. It consolidated sideways throughout the said session within a strict trading range. 6400-fiat continued to be the level of interest, meanwhile. BTC/USD never slipped too below the stated level, nor surged too far from it. During the European session, the pair once made higher highs towards 6460-fiat, only to adequate selling pressure.

The stability in Bitcoin value appeared despite a majorly depressive fundamental, the hack of 6,000 BTC at Zaif, a Japanese crypto exchange. The attacker seems to be shying from dumping all the stolen funds. But the danger lurks in near-term if the sheer amount of stolen Bitcoins – and their sizeable equivalent value in USD – is concerned.

BTC/USD Technical Analysis

The near-term symmetric triangle discussed in our previous analysis got broken following the latest volatile action and squeezed out decent profits from our long and short positions. Today, we decided to zoom out a bit to revisit our medium-term descending triangle. There is indeed an upside action awaited towards the upper trendline, which should coincide with the 61.8% Fibonacci retracement level of the last swing from 5748-low to 8488-high.

BTC/USD is still trending below its 50, 100 and 200H SMA indicators. The RSI and Stochastic are looking to enter towards their neutral zones following the latest upside correction. In RSI particularly, we could expect an extended bullish action if we break above 47. On daily charts, the bias remains bullish.

BTC/USD Intraday Analysis

The range we are watching for today is defined by 6474-fiat as interim resistance and 6375-fiat as interim support. We are first waiting to put our breakout strategy in place. That said, a break above 6474-fiat will have us enter a long position towards 6548-fiat. At the same time, putting a stop somewhere around 4-pips below the entry position would improve our risks in case a pullback occurs.

Looking the other way, a break below 6375-fiat will have us put a short towards the 200H MA indicator of the 1-hour chart. A stop loss somewhere 2-pips below will protect us from additional losses should the price reverses.

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Kraken Trolls NY Regulators, Accuses OAG of Manipulating Bitcoin Futures.

Cryptocurrency exchange Kraken is not backing down from its standoff with the New York attorney general’s office (OAG).

Crypto Exchange Asks Whether OAG Employees Manipulated Bitcoin Futures

In a series of tweets published over the last two days, the San Francisco-based company, which operates the world’s largest 16th-largest cryptocurrency exchange as measured by daily volume, has trolled the OAG in response to its recently-released report on crypto trading platforms.

That report, a culmination of its five-month “Virtual Markets Integrity Initiative,” levies several allegations against Kraken, including that it may be operating in New York unlawfully and has conveyed an “alarming” disregard for potential price manipulation in the cryptocurrency spot markets.

In its latest jab, Kraken’s social media team cheekily accused OAG employees of attempting to manipulate the bitcoin price by releasing its report just one day prior to the expiration of options exchange CBOE’s bitcoin futures contracts.

The exchange said:

“Is it a coincidence that this was published the day before the expiration of the @CBOE futures contract? Who traded on insider information and what is being done to prevent manipulation by @NewYorkStateAG employees? Quis custodiet ipsos custodes?”

In subsequent tweets, the exchange — alluding to the OAG report’s suggestion that Kraken may be operating unlawfully since it declined to fill out the agency’s questionnaire — said that because the OAG had not responded to its questions about whether it has taken formal steps to prevent employees from engaging in insider trading, the firm must conclude that regulators might be engaging in unlawful bitcoin futures trading.

“They have so far refused to comply with our inquiry in to the matter. Only conclusion we can make at this time is that they might be engaged in unlawful activity,” Kraken wrote, adding that while it had “no direct evidence” of insider trading the lack of response raises “red flags,” apparently poking fun at a Bloomberg reporter who had used that term in reference to Kraken.

Kraken Thanks OAG for Exposing Info on Competitors

Previously, Kraken published a tweet “thanking” the OAG for performing this market research at taxpayer expense, providing them with otherwise confidential information on their competitors. The firm said, “Thanks to the NY taxpayer for funding this research — saved our Product team a lot of time, and we got some interesting non-public info on our competitors.”

Meanwhile, Kraken CEO Jesse Powell issued a more pointed criticism of the OAG report, alleging that the state was like an “abusive, controlling ex” for continuing to stalk the company even though it left New York three years ago.

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Crypto Exchange Coinbase: We Don’t Engage in Proprietary Trading.

Cryptocurrency exchange operator Coinbase has denied that it engages in proprietary trading and that these activities account for a large percentage of the firm’s overall trading volume.

CCN reported yesterday that an investigation into cryptocurrency exchange policies and operations, published this week by the New York attorney general’s office (OAG), found that proprietary trading, through which an exchange operates a trading desk that trades on its own platform against its customers, is common within the crypto industry.

Per the report:

“The OAG found that significant variation exists in the amount of trading activity attributable to those platform operators. Circle reported that it accounted for less than one percent of the executed volume on its platform Poloniex during the most recent time period reviewed. BitFlyer USA indicated that its own activity accounted for approximately ten percent of the executed volume on its platform. Another, Coinbase, disclosed that almost twenty percent of executed volume on its platform was attributable to its own trading.”

The OAG noted that, though this practice is also common within traditional securities markets, it raises “serious questions about the risks customers face on those platforms,” since it could mislead traders about the exchange’s true liquidity and hinder their ability to execute trades during periods of peak market volatility.

However, writing in a blog post published Wednesday, Mike Lempres, chief policy officer at Coinbase, said that the exchange operator does not engage in proprietary trading and that the volume cited in the OAG report stems from the company executing trades on behalf of its retail brokerage customers.

He explained:

“Coinbase does not trade for the benefit of the company on a proprietary basis. In order to provide an easy-to-use customer experience, Coinbase Consumer quotes a price and then quickly fills the order from our exchange platform (Coinbase Markets). This takes advantage of the liquidity provided by the entire Coinbase ecosystem.”

When customers use the company’s traditional brokerage platform, now known as Coinbase Consumer, they see a single buy and sell price for each of the assets listed on the platform, rather than a full order-book as they would see on a centralized exchange.

After a customer places an order through the brokerage, the company fills the order from Coinbase Markets, its centralized exchange platform, though this action is hidden from the client, who simply sees the funds enter or leave their personal wallet.

Lempres further clarified that Coinbase neither operates an in-house trading desk nor acts as a market maker, through which a firm places buy and sell orders to increase a trading pair’s liquidity.

He said, “The volume figure stated in the report has been misreported in the media as ‘self-trading,’ which is inaccurate. The figure represents customer-driven volume via Coinbase Consumer. Coinbase does not operate a proprietary trading desk, nor does it undertake market making actions.”

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Ripple Surges by 36% in 48 Hours as Crypto Market Adds $2 Billion.

Over the past 24 hours, major cryptocurrencies in the global market including Bitcoin, Ethereum and EOS increased by 2 to 5 percent, as Ripple led the market with a solid 10 percent gain.

Since September 18, within 48 hours, the price of XRP, the native cryptocurrency of the Ripple blockchain network, rose by more than 36.5 percent.

Technical analysts in the cryptocurrency community have expressed their optimism towards the trend reversal demonstrated by XRP in the last 24 hours.

What’s Behind Ripple Rally

Unlike previous rallies of XRP, the abrupt increase in the price of RIpple was not triggered by a specific series of events. Rather, similar to the rapid recovery of ETH, the native cryptocurrency of Ethereum, it is likely that the steep decline in the price of XRP throughout July and August led the market to demonstrate oversold conditions.

Since late June, XRP experienced an intensified movement on the downside in comparison to other major cryptocurrencies like Bitcoin. The price of XRP was around $0.54 on June 21 and within two months, XRP fell to $0.29, by 46 percent.

Meanwhile, during the same period, the price of Bitcoin only fell by 9 percent, from $6,700 to $6,100.

In the past seven days, social media activity of the keywords XRP and Ripple increased significantly, possibly due to Ripple’s announcement of a new cryptocurrency product by October. Increasing social media activity around Ripple likely led to a rise in hype of XRP.

Marcus Treacher, the global head of strategic accounts at Ripple, recently revealed that RippleNet has experienced rapid expansion throughout 40 countries, deploying a faster and transparent payments system internationally.

“RippleNet’s newest corridors have a combined potential market that totals over $2 Billion in inflows over the last year: InstaReM and RationalFX opened up new corridors from the United Kingdom to Malaysia, Vietnam, Indonesia, Sri Lanka and Bangladesh. Remitr and FlutterWave established a RippleNet corridor to Nigeria from Canada, the first connection on RippleNet in Africa. BeeTech and InstaReM created corridors from Brazil to Spain, Italy, Germany, France and Portugal,” Treacher said.

A combination of RippleNet’s rapid growth, Ripple’s scheduled announcement of a product release in October, and a short-term trend reversal demonstrated by the cryptocurrency exchange market led XRP to increase by such a large margin in a short period of time.

State of the Market

On September 19, CCN reported that the volume of Bitcoin will have to remain above the $4 billion mark in order for the dominant cryptocurrency to sustain momentum throughout the upcoming days.

Over the past 24 hours, the volume of Bitcoin has remained above $4.2 billion while the volume of the global cryptocurrency exchange market increased from $10 billion to $12 billion.

With the volume of the market and prices of both major and small market cap cryptocurrencies recovering, a gradual increase in the valuation of the crypto market is expected throughout September.

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Coinbase Refutes Claims in New York Attorney General's Exchange Rep

Hackers have reportedly stolen $59 million worth of cryptocurrencies from Japanesecryptocurrency exchange Zaif, Cointelegraph Japan reports September 19.

According to a local report, as a result of a security breach on September 14, hackers managed to steal 4.5 billion yen from users hot wallets, as well as 2.2 billion yen from the assets of the company, with total losses amounting to 6.7 billion yen or around $59.7 million.

Tech Bureau Inc, which operated Zaif, stated in press release that the exchange detected a server error on September 17, after which Zaif suspended deposits and withdrawals. On September 18, the exchange realized that the error was a hack, and reported the incident to the Japanese financial regulator, the Financial Services Agency (FSA). Hackers stole 5,966 bitcoins (BTC) in addition to some Bitcoin Cash (BCH) and MonaCoin (MONA).

According to Tech Bureau Inc, the firm Fisco Digital Asset Group will help Zaif cover lost customer assets by providing 5 billion yen ($44.5 million). Tech Bureau made an agreement with Fisco to dismiss more than half of its directors and corporate auditors in addition to Fisco becoming a majority shareholder in the company.

Zaif exchange is the 101st largest cryptocurrency exchange in terms of trade volume, according to CoinMarketCap.

Earlier this year, Zaif admitted to a “system glitch” that allowed users to temporarily acquire trillions of dollars worth of Bitcoin (BTC) for free in February. 16 customers were accidentally able to “trade” yen for cryptocurrency at a rate of 0 yen per coin.:…-losses-reported/ 


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Japan Cryptocurrency Theft Cases Tripled in H1 2018, $530 Million Stolen: Police.

Barely before the ink had dried on the news that Japanese cryptocurrency exchange Zaif had been hacked and slightly less than US$60 million stolen, the National Police Agency (NPA) of Japan has released a report highlighting the vulnerability of Japan’s crypto space.

According to the NPA, the number of incidents involving the theft of funds from cryptocurrency exchanges and individual accounts tripled in the first half of this year compared to a similar period last year. Initially reported by The Asahi Shimbun, the amounts stolen so far this year are far in excess of what was looted last year.

During the entire 2017, a total of 149 cases were reported and more than 660 million yen was stolen but so far this year more than 60 billion yen has been stolen with the reported incidents in the year’s first half reaching 158. Most of the cryptocurrency holdings stolen this year were seized in the hacking of the cryptocurrency exchange Coincheck which lost about 58 billion yen to hackers in January this year.

Poor Security Safeguards

In the cryptocurrency thefts targeting individual accounts, over 60% of the incidents involved the use of similar login details across online accounts and platforms, according to the National Police Agency. With regards to the cryptocurrencies stolen, XRP was among the most targeted digital asset with 1.52 billion yen worth of the digital stolen seized in 42 cases.

Bitcoin was also highly targeted as 94 incidents were reported where 860 million yen worth of the flagship cryptocurrency was stolen. In the Coincheck hacking, the NEM cryptocurrency was the main target as CCN reported earlier in the year.

After the Coincheck incident in January the industry regulator Financial Services Agency (FSA) intensified efforts aimed at disciplining cryptocurrency exchanges. Though it remains to be seen, the hacking of Zaif is likely to have an impact on the ongoing regulatory review of the sector by the FSA. This is especially so in light of the fact that earlier this year regulators had slapped Tech Bureau Corp, Zaif’s parent company, with two business improvement orders.

Hot Wallet Vulnerability

And just like in the case of the Coincheck theft, Zaif is also understood to have kept the affected cryptocurrency holdings in a hot wallet. Most of the digital assets that were stolen belonged to clients – worth around 4.5 billion yen while less than half of that (worth about 2.2 billion yen) belonged to the cryptocurrency exchange. After the hacking Tech Bureau Corp revealed that Fisco Ltd, a company listed on the JASDAQ, would be acquiring a majority stake in the firm for approximately 5 billion yen.

“We will prepare measures so that customers’ assets will not be affected,” said Tech Bureau Corp in a statement.

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Europol: Privacy crypto will take over the dark money markets.

Decentralised exchanges are coming in as a potent addition to privacy coins.

Cryptocurrency is still not as widely used by criminals as fiat is, Europol notes in its 2018 Internet Organised Crime Threat Assessment (IOCTA) report, but it's becoming increasingly popular. At the same time, bitcoin retains its prominence as the cryptocurrency of choice among criminals, but its supremacy is also quickly giving way to the field of privacy coins.

Privacy coins will quickly make tumblers and mixers obsolete, Europol says, and points out that cryptocurrency know-how will have to be a core skill for any cybercrime investigator who wants to get anywhere.

  • Tumblers and mixers are both a type of vessel used in the creation of cocktails.

    They're also a way of laundering bitcoin and similar easily traceable cryptocurrencies. Both are the same thing, and as the name suggests, they're a way of mixing up bitcoin from different sources, and redistributing them to help cover their tracks.

    Generally, they involve multiple rounds of trading bitcoin for an equal or slightly lesser amount of bitcoin from somewhere else, and just mixing them all up.

"Previous reports indicated that criminals increasingly abuse cryptocurrencies to fund criminal activities. While Bitcoin has lost its majority of the overall cryptocurrency market share, it still remains the primary cryptocurrency encountered by law enforcement," Europol said. "Money launderers have evolved to use cryptocurrencies in their operations and are increasingly facilitated by new developments such as decentralised exchanges... It is likely that high-privacy cryptocurrencies will make the current mixing services and tumblers obsolete."

It's pretty clear that cryptocurrencies for criminal purposes are here to stay, and that the combination of decentralised exchanges and privacy coins will be an extremely challenging new frontier for law enforcement.

What's less clear is what to do about it.

Going forwards

The US Secret Service has previously described privacy coins as one of the greatest national security threats facing the US.

Japanese regulators have gone a step further and formalised their complete opposition to all privacy cryptocurrencies, and Japan's exchanges have dutifully pulled privacy coins from their shelves. But this naturally doesn't mean they can't be acquired.

For now, the question might be why, if they're so great/awful, are privacy coins not being more widely used by criminals? This question matters a great deal because it lets authorities look at the exact levers they can pull if they want to affect criminal use of privacy coins, while also letting speculators glimpse a potential time line for broader adoption.

In this case, the answer might largely come down to the relative unpopularity of decentralised exchanges. As they emerge and grow, it might be reasonable to expect privacy coins to grow alongside them.

Why aren't privacy coins more popular?

A crook wants the same thing in money as everyone. It should be spendable, valuable and reliable – and ideally anonymous. So given a choice, most criminals would probably still prefer cash in hand. This means most of the cryptocurrency activity is relegated to the dark web and other more international criminal stuff.

But as researchers have noticed, the dark web is mainly filled with Russian and Eastern European users, most of whom aren't anywhere near as worried about the authorities as its US users. This can be seen in polls where dark web markets will ask users about their preferred currency, where the answer is largely dependent on the respondent's nationality. For many market participants, the need for reliably valuable and spendable currency still far outweighs the need for additional privacy.

Plus, as any exchange will tell you, integrating different cryptocurrency payment systems is a lot of work. Bitcoin is generally the quickest and easiest, while the more exotic currencies can be slower and more difficult.

And as the IOCTA report notes, dark web marketplaces tend to have a very short lifespan, even without police intervention. Law enforcement shut down three major dark web marketplaces in 2017, but in the same time, nine others closed their doors "either spontaneously or as a result of their administrators absconding with the market's stored funds. The almost inevitable closure of large, global Darknet marketplaces has led to an increase in the number of smaller vendor shops and secondary markets..."

Dark web marketplaces flit in and out of existence quite quickly, and the default payment system is almost always bitcoin. This is self-reinforcing because it means bitcoin is also more reliably spendable. The idea is that whatever else happens, there's always going to be someone who takes bitcoin.

This is one of the reasons decentralised exchanges are such a significant accoutrement to privacy coins. They introduce the ability for people to quickly, easily, safely and anonymously convert other cryptocurrencies to and from bitcoin, even in relatively large amounts.

Decentralised exchanges are a key ingredient in the impending obsolescence of tumblers and mixers. They essentially let other coins seamlessly interface with the bitcoin-centric dark web economy, giving both buyers and sellers a reason to more readily use and accept privacy coins.

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With the relatively recent addition of reliable decentralised exchanges, privacy coins are on track to roll in to the dark web markets like any other product angling for a market share.

Fortunately, even though dark web users seem to be working towards privacy coins, Europol found that terrorists tend to remain hopelessly non-technical and still favour conventional banking and remittance services.

"None of the attacks carried out on European soil appear to have been funded via cryptocurrencies," the report said. "The use of cryptocurrencies by terrorist groups has only involved low-level transactions. Their main funding still stems from conventional banking and money remittance services."

What happens next?

Interpol recommends an approach to educate legitimate consumers about cryptocurrency because although most of the attention is focused on the dark web elements of cryptocurrency, there's still an ongoing uptick in crimes against cryptocurrency users. As a source of criminal revenue, these are just as worth halting as any other profitable crime.

The same kinds of electronic attacks which used to target banks and institutions can now end up focused on a single ill-prepared individual, Europol says, so "prevention and awareness campaigns should be tailored to include advice on how users of cryptocurrencies can protect their data and wallets."

Investigators should also start educating themselves and building relationships with local cryptocurrency related businesses.

"Investigators should identify and build trust relationships with any cryptocurrency related businesses operating in their jurisdiction, such as exchangers, mining pools or wallet operators. Member States should increasingly invest or participate in appropriate specialist training and investigative tools in order to grow their capacity to effectively tackle issues raised by cryptocurrencies during investigations.

"Investigating cryptocurrencies must become a core skill for cybercrime investigators."

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Coinbase Refutes Claims in New York Attorney General's Exchange Report

A recent report published by the New York Office of the Attorney General (OAG), which claimed several cryptocurrency exchanges it investigated are vulnerable to market manipulation, has drawn backlash from industry players.

In a blog post published Thursday, Coinbase's chief policy officer, Mike Lempres, wrote that the OAG's assertions in the report have led to misrepresentation of the exchange's business in the media.

The OAG wrote in its original report: "Coinbase disclosed that almost 20 percent of executed volume on its platform was attributable to its own trading."

In response, Lempres clarified that Coinbase does not "trade for the benefit of the company on a proprietary basis."

He continued:

"When Coinbase executes these trades, it does so on behalf of Coinbase Consumer customers, not itself."

Lempres further explained that the 20 percent figure represents consumer-driven volume on Coinbase Consumer, a service that executes users' orders with its own exchange, as oppose to what was described as "self-trading" in the report.

Jesse Powell, the founder of the U.S.-based Kraken exchange, which was named by the OAG as possibly in violation of state law, vented his anger on Twitter, describing the environment in New York generally as "abusive."

"NY is that abusive, controlling ex you broke up with 3 years ago but they keep stalking you, throwing shade on your new relationships, unable to accept that you have happily moved on and are better off without them. #getoverit," he tweeted.

Echoing that, Shapeshift's Erik Voorhees further tweeted:

"And those kinds of people never seem to realize their behavior is what led to the breakup... NY is going to lose its position at the head of global finance if it doesn't change soon. Keep up the good work."

Both Powell and Voorhees have been vocal in criticizing the high regulatory bars imposed by New York as stifling crypto growth in the global financial center.

Voorhees said in May at CoinDesk's Consensus 2018 event in New York:

"Here we are two miles from the Statue of Liberty and you cannot sell CryptoKitties in the state without that license. That's the absurdity of what's happened here."…-exchange-report/ ‎

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Hackers stole $60 million from a crypto exchange in Japan's second major bitcoin heist this year.

Hackers have stolen 6.7 billion yen ($60 million) in Bitcoin and two other cryptocurrencies from the Japanese digital exchange, Zaif, owned by startup Tech Bureau Corp, the company said on Thursday.

  • 6.7 billion yen ($60 million) in cryptocurrency has been stolen by hackers from a Japanese digital exchange called Zaif.
  • Tech Bureau Corp, the Osaka based company that owns the exchange, said hackers gained access for a timeframe of over two hours on September 14 and stole money from Zaif’s ‘hot wallet’ where Bitcoin and other digital currencies are stored, Reuters reported.
  • Server problems were detected on September 17, with the company sounding the alarm to authorities the following day. The exchange was taken offline, and efforts have been underway to get it working again.


Hackers have stolen 6.7 billion yen ($60 million) in Bitcoin and two other cryptocurrencies from the Japanese digital exchange, Zaif, owned by startup Tech Bureau Corp, the company said on Thursday.

In a statement following the hack, Tech Bureau said that its Zaif exchange was hacked in a window of over two hours on September 14. They detected server problems on September 17, confirmed the hack and sounded the alarm to authorities the following day, Reuters reported.

Tech Bureau Corp said the perpetrators gained access to its 'hot wallet' where the digital coins are stored. The platform has been taken offline, but it said efforts were underway to get it working again.

Japan has been a leader in cryptocurrencies and has set up a system of licensing digital exchanges with the government to regulate the market and protect consumers. The system is designed to make Japan a world leader in the financial technology.

Bitcoin has been legal tender in Japan since April 2017, and some retailers in the country already accept the digital payments, The Washington Post reported. But Thursday’s hack and others before it show the technology is still having teething problems.

The digital exchange, Coincheck, which is based in Tokyo, reported that 58 billion yen ($547 million) in cryptocurrencies disappeared earlier in the year, in what was suspected to be another theft by hackers.

Coincheck had been applying for a government licence since 2012, but still didn’t have at the time it was hacked, sparking debate in the industry. Zaif was registered by the government last year.

On Thursday, after the hack, the company said it had accepted a 5 billion yen ($45 million) offer of investment from Tokyo based company Fisco, for a majority stake in Tech Bureau.

Bitcoin and Manacoin were among the cryptocurrencies taken in the September 14 breach. 2.2 billion yen ($20 million) of the stolen currency belonged to the company and the rest were owned by customers, Tech Corp said.

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Licensed Crypto Exchange Zaif Plans Compensation after 6,000 Bitcoins, $60 Million Crypto Theft.

In the second major hack of a Japanese cryptocurrency exchange this year, some 6.7 billion yen ($60 million) in cryptocurrencies were stolen from the wallets of Zaif of which 4.5 billion yen ($40 million) belonged to customers.

Tech Bureau, operator of cryptocurrency exchange Zaif, confirmed the hack occurred between 1700 and 1900 local time on September 14 wherein attackers managed to breach the hot wallets (online, connected wallets) of the exchange containing Bitcoin, Bitcoin Cash and Monacoin.

According to Nikkei, the operator did not detect the hack until September 17, suspending deposits and withdrawal services upon discovery. Tech Bureau approached the Financial Services Agency (FSA), Japan’s financial regulator, to report the breach with an investigation currently underway.

While determining that 5,966 bitcoins were stolen as a result of the breach, Zaif says it is currently unable to ascertain the exact amount of Monacoin (MONA) and Bitcoin Cash (BCH) stolen.

“The reason for not being able to determine the damaged quantity at the moment is that the server is not restarted until the reliable safety can be confirmed in order to prevent secondary damage,” Zaif said in translated statements. “As soon as the quantity of the lost virtual currency is determined, we will report it promptly.”

In a quick solution to compensate customers for their losses, Tech Bureau revealed it is selling a majority of its shares to the Fisco Digital Asset Group, a publicly-listed financial services corporation in Japan. The exchange has already signed a basic agreement that will see a cash injection of 5 billion yen ($44.59 million) in exchange for a majority ownership. The funds will directly be used to replace the 4.5 billion yen ($40 million) stolen from customer accounts.

It’s notable that Tech Bureau’s Zaif was one among six licensed cryptocurrency exchanges that received a ‘business improvement order’ from the FSA in June, three months before the hack.

The domestic cryptocurrency is already under increased scrutiny by the financial regulator following a $530 million theft of cryptocurrency from Tokyo-based Coincheck, an unlicensed exchange, earlier in January.

While a dampener, the crypto thefts haven’t quelled the burgeoning appetite for cryptocurrency trading in Japan.  Last week, the FSA revealed it is expecting in excess of 160 applications from companies looking to launch cryptocurrency exchanges in a regulated market.

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Switzerland and Israel Collaborate on Cryptocurrency & Blockchain Regulation.

The Swiss Minister for Finance Ueli Maurer recently visited Israel along with State Secretary for International Financial Matters Joerg Gasser, citing their goal as gaining bank access to Israeli markets to allow Swiss banks to trade there.

Reuters reports that the two nations have now agreed to collaborate on financial technology, cryptocurrency, and blockchain regulation following their discussion with the Israeli government.

Gasser also stated that Gasser said he was preparing a report blockchain regulation methods and factors and would be submitting recommendations by the end of the year with the aim that parliament could approve in 2019 and the new regulations could be implemented the following year.

Switzerland has long been at the forefront of blockchain innovation, welcoming startups and researchers from far and wide with their blockchain-friendly regulation. Switzerland is home to Zug, a small Alpine town turned blockchain hub which is now often referred to as Crypto Valley in a nod to California’s Silicon Valley tech hub. ShapeShift exchange and the Ethereum Foundation are both headquartered in Zug along with many other companies.

While the regulatory climate is welcoming in Switzerland, the central bank has been less so. CCN reported in July that organizations in the country were trying to stem the flow companies leaving for other nations after encountering difficulty opening bank accounts over central bank concerns regarding the opaque nature of crypto-crowdfunding.

After the government launched an investigation into the possible use case of an “e-franc” state cryptocurrency, the central bank shot the idea down, stating that crypto technology was not good enough. However, a new Zug-based startup named ROCKZ is now working on a stablecoin based on the Swiss franc, highlighting to an extent that crypto-technology is progressing with or without the support of the banks.

While one could be forgiven for assuming that Swiss regulators are bringing more to the table in their information exchange, Israel is also a major tech hub. It’s the source of most Intel processor chips, and Bitcoin mining rig giant Bitmain has announced that it’s tripling its development center in western Israel to increase ASIC manufacturing. Last year the Israeli Prime Minister Benjamin Netanyahu even suggested that the era of traditional banks and banking was coming to a close altogether and that cryptocurrency may be the turning point saying:

“Is the fate of banks that they will eventually disappear? Yes. The answer is Yes. Does it need to happen tomorrow? And do we need to do it through Bitcoin? That’s a question mark.”

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Australia’s Financial Watchdog Cracks Down on ‘Misleading’ ICOs & Crypto Funds.

Australia’s financial regulator and watchdog is ramping up its scrutiny into ‘misleading or deceptive’ initial coin offerings (ICOs) and crypto-asset funds targeting retail investors.

The Australian Securities and Investments Commission (ASIC) has confirmed it has identified “consistent problems” to ultimately shut down several initial coin offerings aimed at soliciting funds from retail investors.

A radical new form of digital fundraising powered by cryptocurrencies like bitcoin and ethereum, ICOs are a source of capital for startups and companies who offer custom cryptographic tokens with an inherent benefit in exchange to investors. ICOs aren’t banned in Australia and while there is no ambiguity about their legal status, they are largely unregulated.

The “use of misleading or deceptive statements in sales and marketing materials”, running an “illegal registered managed investment scheme” without possession of an Australian financial services licenses were, in particular, highlighted by the ASIC as consistent problems found among the targeted ICOs, leading to “significant risks” for investors.

The regulator’s commissioner John Price said:

“If you raise money from the public, you have important legal obligations. It is the legal substance of your offer – not what it is called – that matters. You should not simply assume that using an ICO structure allows you to ignore key protections there for the investing public and you should always ensure disclosure about your offer is complete and accurate.”

Furthermore, the regulator also revealed it blocked ICOs from raising capital in five separate matters since April 2018 due to their lack of investor protection measures. All five ICOs are on hold while some are restructuring to comply with the mandated requirements, the ASIC said.

ICO operators who have completed their token issue are also seeing the ASIC’s scrutiny. A crypto investment fund dubbed the ‘New Dawn Fund’ was slapped with a final stop order on its Product Disclosure Statement issued by Investors Exchange Limited (IEL) after the regulator’s concerns. IEL has since consented to the final stop order, the ASIC added.

The regulator has previously identified “fundamental concerns” in the structure, status of the offeror and the whitepaper offered in specific ICOs in the past, putting the brakes on the issuance before its launch.

A year ago, nearly to the day, the ASIC released guidelines on ICO fundraising to remind operators of their obligations before a token issuance.

The regulator said at the time:

ASIC recognises that ICOs have the potential to make an important contribution to the options available to businesses to raise funds and to investment options available to investors.

In April, ASIC commissioner Price confirmed the ICO space will be “a key focus” area for the regulator going forward. He stressed that the regulator will keep an “open mind” to new financial innovations but not at the expense of “basic consumer protection” policies.

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Cardano price analysis 20 September: ADA token scores modest gains in early trading.

Cardano jumps up, while other coins remain flat or fall.


Key takeaways

  • Cardano's price has been see-sawing but remains up in early trade.
  • Trading volumes are up around 16% over the past 24 hours.
  • ADA and XRP are the only two top ten cryptocurrencies by market cap showing gains this morning.

Cardano is one of the few cryptocurrencies in the green today, trading around 3% higher over the last 24 hours.

The coin, like many others, saw a spike in value during trading yesterday, rising from US$0.068 to US$0.074. Overnight ADA slipped back down to its previous price of US$0.068 but regained some losses this morning.


Despite the positive sentiment, the token's price remains significantly lower than its monthly high of US$0.108, recorded on the first day of September.

In January 2018, ADA hit a peak value of US$1.320.

At the time of writing, ADA was valued at US$0.070.

24-hour trading volumes have jumped up (16%) from US$67 million yesterday to US$78 million today.

Ethereum World News reports that the ADA/USD trading pair made it above the major $0.0720 mark, signalling that a correction could be on its way. However, it's possible that $0.0720 could hold ground as a strong support.

Crypto Daily UK analysts suggest that Cardano finally touched the bottom of the pitchfork formation it has been trading in. Cardano has reached rock bottom against bitcoin and is seemingly set for an "explosive rise".

In related news, the United Kingdom's Financial Conduct Authority (FCA) declared that bitcoin and crypto-assets are ill-suited to retail investors, and investors in these assets should be prepared to lose all their money.

Visit these pages to learn all about different exchanges, understand exactly how to buy and sell cryptocurrencies, calculate your taxes, discover digital wallets to hold assets and explore a list of all the alternative coins on the market.

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Someone’s putting electric cars on the blockchain to mine crypto while driving.

Has science gone too far? Or has economics not gone far enough?

CoinTelegraph reports CyClean is putting electric cars on the blockchain so they can mine cryptocurrency while driving – as you do.

Electric vehicles and other more eco-friendly products are supplied to CyClean with a chip that connects to the CyClean server. It then tracks how far a vehicle travels or how many watts are used and rewards the driver or user accordingly.

CyClean currently only covers electric bicycles and motorcycles, hence the name presumably, but the expansion to electric cars is said to be coming in the near future. The chip can also be incorporated into solar panels and other clean energy systems to deliver additional rewards for the amount of power produced as well as into wrist bands to reward people for running a certain distance. The vision is to create a healthy, green, environmentally conscious and almost painfully wholesome green fitness community.

The money

The system involves a fixed amount of daily rewards, which is then divided among all the users who have travelled more than a kilometre in that day or produced more than one watt. The amount of CyClean coins will be proportionate to the distance travelled or the watts produced. The total daily amount distributed is subject to change as the system evolves, its white paper says.

It's a fascinating idea that will no doubt be subject to a lot of "oh so now we have crypto mining cars on the blockchain" type criticism, even as the economic criticisms are potentially much more valid.

The token itself is intended to be useable for renting a range of CyClean products as well as other partner products over time and will be connected to carbon credit schemes. Naturally, it's also intended to be redeemable for cold hard cash at constantly varying prices, also known as sellable.

Where's the value?

The nugget of value in the entire system is intended to be CyClean's brand name and the sense of endorsement that CyClean products are expected to carry. This is what CyClean offers partners who agree to let their products be rentable in exchange for CyClean credits rather than real money. The idea is that this, in conjunction with the CyClean rewards, make CyClean products a much more tempting option for consumers.

Seems like it could work, although the anticipated volatility of CyClean coins might make it tough for CyClean to convince partners to accept it over money.

Living long enough to become the villain

There are also some seemingly self-defeating peculiarities with the system and the intended self-driving car.

"When CyClean car is complete and launched to the market, it will be one of the strongest mining capabilities thus will be like ASIC metaphorically when mining CyClean coins," the white paper explains.

In other words, it's incentivising people to drive wherever possible rather than bike, walk or take public transport. Not only that, but it's also encouraging people to drive as far as possible in any given day. If CyClean rewards ever become valuable enough for people to drive when they don't need to, the system might be undermining its own ethos. And with more people suddenly CyCleaning around the place, the rewards for those who use it as intended start dropping.

This puts a fairly stark cap on the potential value of CyClean rewards. By necessity, they can never get high enough to actually be "worth it" and will only ever be a small side benefit to help sell a specific brand of product.

There are also some lingering questions around obvious gaming of the system and how fair it will be for everyday users. It won't be long before people find the most effective way of mimicking travel times, such as throwing their CyClean electric bike and scooter into their car before driving around wearing an armband or finding a way of hacking their device's GPS tracker.

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But even assuming everyone does use it as intended, the system is naturally geared towards those who will be covering a lot of ground every day. These are your full-time Uber drivers, taxi companies, delivery drivers and similar. Later on, it will be your autonomous vehicle owners; the CyClean car roadmap is intended to eventually lead to driverless cars.

The vast majority of the rewards will be going to these heavy users who cover a lot of ground in their cars. And not only is distance a strong factor, but CyClean rewards are also weighted by device type, so cars are worth disproportionately more than wrist bands, for example.

Without actually doing any calculations, it intuitively seems like the actual value of the system for an everyday CyClean user, someone who just rides an electric bike to or from work or goes jogging with the wrist band, would end up close to zero.

Remember, if the actual token value gets too high, it starts destroying the system by incentivising needless energy consumption and dropping rewards for everyone who can't be bothered gaming the system in this way. By necessity, the total value of the daily reward pool can never get too high.

These limited rewards are then distributed mainly to the most dedicated "miners," who drive full time in their own vehicle or are otherwise in a position to earn the highest rewards. The rewards for those everyday users, who make up the bulk of the market and help shore up the value of the CyClean tokens through their purchasing power, seem like they'll be too low for anyone to bother with.

In the end, CyClean products will still need to compete on quality and price to get anywhere, and without enough rewards to sway consumer purchasing decisions, these tracking systems and blockchain chips will just be extra overhead.

Slightly ironically, CyClean's green energy economy might not be sustainable.

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