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India Sends Officials to US, Japan and Switzerland to Study Cryptocurrency and ICOs

The Securities and Exchange Board of India (SEBI) organized tours to other countries for its officials to study cryptocurrencies and initial coin offerings (ICO), according to its 2017-18 annual report.

The Indian regulator reports that authorities have already undertaken “study tours” in particular to study cryptocurrency and ICOs at Japan’s Financial Services Agency (FSA), the U.K. Financial Conduct Authority (FCA) and the Swiss Financial Market Supervisory Authority (FINMA).

The overseas study trips reportedly took place to help officials “engage with the international regulators and gain deeper understanding of the systems and mechanisms,” the document states.

The report is not the first time that Indian authorities have expressed their interest in the way other countries approach cryptocurrency. For instance, the Reserve Bank of India (RBI) also published its annual report 2017-18 in which the authority draws attention to different types of crypto regulation worldwide, focusing on Japan and South Korea in particular.

As Cointelegraph reported August 30, citing the annual report, RBI is currently considering the feasibility of issuing a rupee-backed central bank digital currency.

The SEBI report comes against a background of a controversial RBI decision that came into effect July 5 and implies a ban on banks' dealings with crypto-related businesses and persons.

The Indian Supreme Court had upheld RBI’s restriction until the July hearing, which was later postponed till September 11. The court also ruled not to grant interim relief to those affected by the ban.

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Microsoft Is Connecting Its Major Products to Blockchain – Here's Why

Three years ago, Microsoft Azure was the first to bring blockchain to the cloud. Now it's connecting the technology to just about everything else.

The software giant has quietly been building bridges between its blockchain services and other, widely used infrastructure and platforms, such as Office 365 Outlook, SharePoint Online, Salesforce, Dynamics 365 CRM Online, SAP, and even Twitter, according to Matt Kerner, the general manager of Microsoft Azure. The idea is to allow Microsoft customers to port their data from these platforms into the cloud, and from there onto a blockchain.

Why? In addition to the usually touted blockchain efficiencies, one of the less-discussed benefits of distributed ledger technology (DLT) in a cloud environment like Azure, according to Microsoft, is that it amasses data from multiple companies in a standardized format at scale. The potential to mine data for all sorts of insights then becomes limitless, the company reckons.

Hence, the company is integrating tools such as Microsoft Flow and Logic Apps – which offer hundreds of connectors to thousands of applications – into Azure Blockchain Workbench, a service it launched in May to make the creation of blockchain apps easier (Workbench currently has ethereum Proof of Authority configured as the consensus protocol).


It's all a part of the evolution of Big Data, Kerner explained. Prior to blockchain, he pointed out, cloud computing enabled departments within the same company to break out of their data silos and collaborate on heterogeneous data sets, increasing smarts through machine learning (ML) and artificial intelligence (AI).  

"Blockchain empowers the next step – enabling a single, authentic data set shared across counterparties. This is already improving the way transactions happen," Kerner told CoinDesk, adding, "We believe the same will be true with data analytics."

Stepping back, many would argue that data is now the most valuable naturally occurring resource on the planet. As the race to prove the best data analytics intensifies, firms are springing up whose sole purpose is to structure and format data to run AI algorithms on.  

But with enterprise blockchain, you get the structured and formatted data part thrown in for free, as Kerner said many Azure customers were discovering.

"What blockchain is doing is creating a multi-party business process that is moving out of email, phone calls, spreadsheets and into a single system with a single view on the data that all of the participants can rely upon and trust," he said.

Looking ahead, Kerner said bringing vast amounts of unstructured and siloed data into a context where it could be leveraged and even shared would drive exponential change. He said:

"Even the fiercest of competitors can onboard and mutually derive benefit from that system and find new revenue streams."

Taking on IBM

A good example of Azure connecting and balancing components in a large and complex production environment is Insurwave, which simplifies maritime insurance for shipping hauls carried by Maersk.

The platform was built using R3's Corda platform with help from EY and Guardtime and is now in commercial production with insurers such as Willis Towers Watson, XL Catlin, and MS Amlin.

Insurwave, which tracks cargos and adjusts insurance premiums in real time, collates all sorts of data, everything from internet of things (IoT) sensors monitoring temperature, to whether the ship is going to hit a storm, or enter a war zone or an area heavily populated with pirates. Once this data is shared on the blockchain, Power BI, a Microsoft business analytics tool, can be used to gain insights about shipping hauls, Kerner said.

Further, Ricardo Correia, a managing director and head of partner management at R3, said its relationship with Microsoft is a good deal more than Azure being Corda's default preferred cloud.

In addition to a one-click Corda capability, Correia pointed to integrating Corda into modules within the Azure marketplace.

"This enables Corda to plug into a number of different capabilities including Azure SQL, active directory for identity access management and key vault for key management," he said.

Some of this is already in place because of Insurwave, with deeper integration also happening in a number of use cases. Notable ones include the webJet blockchain, which aims to reconcile hotels and other travel arrangements on a single ledger, and was cited by R3's CTO Richard Brown as an example of Corda extending beyond mainstream finance.

Widening the lens, the ability to track items in real time and share things like IoT data using a blockchain has made global trade and supply chain a leading light in terms of domains to chase. From a strategic point of view, Insurwave challenges IBM's bid for global trade dominance, which also has Maersk in the position of flagship, so to speak.

IBM has openly stated that this was its No. 1 target. However, Correia said Microsoft is also making its mark in supply chain – perhaps with a little less fanfare. "It's in their interest given they too have very large supply chains with a number of their product offerings," he said.

In terms of offering blockchain as a service, IBM has championed Hyperledger Composer for the past couple of years. However, there may be some question marks over the design of Composer, at least from an IBM perspective.  

Azure's Kerner was tactfully equivocal about Microsoft's enterprise blockchain rivals, adding that everything is built with an eye towards enabling a consortium that's not exclusively on Azure.

"It's got to be open. Any meaningful consortium is going to have members who have different choices that they have made around their cloud provider and who they choose to work with," he said.

Microsoft image via Shutterstock.


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Against the 'Putrid' Euro, Naples' Mayor Plans to Launch Autonomous Cryptocurrency

Naples’ mayor, Luigi de Magistris, has posted an impassioned pledge to launch an autonomous municipal cryptocurrency that, he says, would unshackle the city from “anti-southern discrimination” and “unfair” debt, on his Facebook public profile September 2.

De Magistris argued for the new currency as part of a threefold plan of action that would reclaim political and fiscal autonomy for Naples — the capital of Italy’s southern Campania region.

While yesterday’s rhetoric-laden post did not explicitly outline details, the mayor’s previously discussed plans to launch a municipal cryptocurrency tied to the city’s economy has led to a ferment of local blockchain activity: details of the Municipal Administration’s work group for blockchain and crypto are even announced on the city’s official page.

The mayor’s latest post has contextualised this vision for a municipal cryptocurrency within a political effort to enfranchise southern regions and bolster self-determination against the “potentates who rule in Rome.” As the mayor notes, this push for greater local power has been preempted on the other side of Italy’s north-south faultline — in the north, “the separatists screamed first.”

The central government, in his view, has been working to the north’s advantage:

“Before a government with obvious anti-south traction, [which is] strengthening the Lombard-Veneto axis… and is work[ing] to hijack most of the resources towards the rich, giving [only] alms to the south, we must launch an historic challenge, never thought nor implemented so far.”

The mayor also made a forceful rebuke to the city’s creditors, saying that Naples does not recognize its debt — due in a “putrid” currency, the euro  — inveighing, “we in fact are victims and should be compensated, rather than paying debt to the usurpers!”

De Magistris’ post further highlighted Naples’ considerable capital that derives from tourism, pledging to encourage innovative forms of popular shareholding — a sentiment that echoed calls to upend traditional economic structures with blockchain-enabled, distributed and incentivized (tokenized) ecosystems.

As Cointelegraph has reported, the synergy between the cryptocurrency revolution and autonomous governance has been recognized by many — with crypto actively being proposed as a system that would unfetter secessionist movements from being held ransom by sovereign governments.

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Coin Race: Top 10 Winners/Losers of August

The bear run of August left many traders mauled, but a cautiously optimistic sentiment remains. The month ended with many coins trying to get on an upwards slope, although only three of them registered a positive net change within those 31 days. Let’s have a closer look at the top 50 coins by market capitalization and how August treated them.

Top 10 Winners:

Dogecoin’s rally took it soaring into the heights as the coin gained 87.55% on its price. It is followed by NANO and ETP (Metaverse), with a net increase of 61.34% and 59.57% respectively. The others are winners only in the sense that they lost the least: the last of the winners is EOS, having lost 12.6%. Bitcoin is also near the end of the list. July and August share only Dogecoin and Bitcoin in this list, where Dogecoin has moved up and Bitcoin down.

Top 10 Losers:

Meanwhile, the losers all lost more than 30% in total, with the biggest victim being Global Utility Token (OKB) at 49.12%. Ethereum is another major coin with a downtrend of 34.48%. Augur’s REP coin has also suffered a significant loss at 34.58%. Golem, Qtum and Bytom mark another month in the top 10 losers list. All three suffer even bigger losses than in July.

Winners & Losers from Top 100/200:
The biggest winner in the top 100 coins by market cap has more than doubled its price: a whopping 157.29% increase belongs to TaTaTu (TTU). In the top 200, even TTU is overtaken by Switcheo (SWH) who marks a net increase of an incredible 278.01%.

The loss department is not too different from the top 50. In the top 100, the biggest loss belongs to Aurora (AOA), while CasinoCoin (CSC) holds that position in the top 200 at 78.23% in red. CSC held that very same position in July too.

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Almost All Top 100 Cryptocurrencies Solidly in Green, Dogecoin Skyrockets Over 40%

Saturday, September 1: crypto markets are multiplying recent gains today, with 97 out of the top 100 cryptocurrencies by market cap solidly in the green, as data from Coin360 shows.

Bitcoin (BTC) continues to climb steadily over the $7,000 mark, seeing 2.52 percent gains over the past 24 hours, according to CoinMarketCap. Bitcoin is trading at about $7,216 at press time, up 7.2 percent over the past week. 

The largest cryptocurrency by market cap broke the $7,000 point for the second time this week amidst news from the U.S. Commodity Futures Trading Commission (CFTC) reporting a decline in bearish positions for non-commercial Bitcoin futures contracts.

Ethereum (ETH) is grazing the $300 price point, trading just under it at $299.66, up almost 6 percent over the 24 hour period. The largest altcoin has, like Bitcoin, also seen about 7 percent growth on the week, though it is still facing 28.7 percent losses on the month. 

Total market capitalization of all cryptocurrencies has reached $238.4 billion point for the first time since August 8 and is continuing to grow, seeing a slight spike during the hours to press time.

Of the top 25 cryptocurrencies, Dogecoin (DOGE) has seen the most notable growth, up a whopping 41 percent over the past 24 hours, according to CoinMarketCap. Altcoin Dogecoin has seen a significant upswing since August 30, up a stunning 135 percent in the past three days.

DOGE is currently ranked in 21st place on CoinMarketCap, trading at $0.0061 and with a market capitalization of $708 million.

To explain DOGE’s massive growth this week, commentators on Twitter point to an impending infrastructure development for the project dubbed Dogethereum, the demo for which is set to take place Sept. 5. The protocol refers to a smart contract that will act as a so-called bridge letting people move Dogecoins to and from the Ethereum blockchain.

In the top ten coins, Bitcoin Cash (BCH) and Litecoin (LTC) have seen the most growth, up 14.7 and 8 percent respectively.

The wave of green across crypto markets has increased as the reports surfaced that the Chicago Board Options Exchange (CBOE) is planning to launch Ethereum futures by the end of 2018.

Also this week, the central bank of India, the Reserve Bank of India (RBI), confirmed its plans to set up an inter-departmental group to evaluate the feasibility of issuing a rupee-backed central bank digital currency.

Earlier this week on August 29, Cointelegraph reported announced that Yahoo Finance was displaying buy and sell options for several major cryptocurrencies on its website. The company then confirmed to Cointelegraph that the new service will be only available on its iOS app and will let users trade cryptos including Bitcoin, Ethereum, Litecoin and Dogecoin on their preferred exchanges via an integrated third party service.

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Russian Police Seize 22 Cryptocurrency ATMs under Central Bank Request.

Russian police have recently seized cryptocurrency ATM machines under orders from the country’s central bank.

According to local publication RBC, the ATM developer impacted by the seizure plans to appeal the action, and has incurred economic damage and costs to its reputation, said Sarkis Darbinian, an attorney for the Center of Digital Rights, which defends the company.

Artem Bedarev, head of BBFpro, told RBC the company does not understand the action and did not receive any preliminary inquiries from the prosecutor.

Bedarev said one of the employees conducting the seizure said an investigation will take place for six months. The employee also said the Prosecutor General’s Office took the action based on a letter from the Bank of Russia.

22 Terminals

The company operated 22 terminals in stores, bars and shopping centers in nine cities. An official from Snegir, a shopping center where a unit was installed, confirmed the seizure on Aug. 29.

A Central Bank representative did not answer questions about the seizure. The representative did say the regulator performs systematic actions to determine and correct illegal financial activities. The chance for uncontrolled cross-border transfers brings the risk of cryptocurrency involvement in illegal financial activities, the representative said.

Darbinian, the attorney for the Center of Digital Rights, said there is no rule against buying cryptocurrency, and that the company abides by statutory procedures, identifies users and pays taxes.

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Rakuten Seeks to Acquire Bitcoin Exchange in $2.4 Million Deal.

Japanese e-commerce giant Rakuten is planning another step into the cryptocurrency industry with the acquisition of a local bitcoin exchange.

The company said in an announcement that it has inked a share transfer agreement for 100 percent of an exchange called everybody’s Bitcoin on Friday. The acquisition appears to be costing the firm 265 million yen, or $2.4 million, when it goes through on Oct. 1.

Explaining the move, Rakuten said it believes "the role of cryptocurrency-based payments in e-commerce, offline retail and in P2P payments will grow in the future," adding:

"In order to provide cryptocurrency payment methods smoothly, we believe it is necessary for us to provide a cryptocurrency exchange function."

Further, the firm indicated that the acquisition is in response to demands from a growing number of foreign exchange customers on its securities business arm, who have been calling for the offering of a cryptocurrency exchange service.

Launched in March 2017, Everybody's Bitcoin is one of the several unlicensed crypto exchanges in Japan that came under scrutiny from Japan's Financial Services Agency after the Coincheck hack in January, as the regulator sought business and security improvements.

With the planned acquisition, Rakuten aims to assist the exchange in enhancing its internal systems in an effort to meet with the regulator's requirements for obtaining a license.

According to today's announcement, Everybody's Bitcoin reported a net loss of around $444,000 in the fiscal year ended March 30, 2018.

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Yahoo Finance Now Offers Trading of 4 Cryptos on Its iOS App.

Yahoo Finance, one of the world's largest news sites for real-time stock quotes and market information, has added a feature allowing cryptocurrency trading on its platform.

According to a blog post on Thursday, the company now supports trading of four types of assets – bitcoin, ethereum, litecoin, and dogecoin – on its iOS mobile app.

The announcement came amid various tweets online yesterday indicating the service appeared to be also available on the desktop version of Yahoo Finance – although, the feature is not visible on desktop browsers at the moment. Yahoo Finance said in the announcement it plans to extend the service to Android, desktop and mobile web platforms in the future.

For the new feature, Yahoo partnered with TradeIt, a platform that integrates with brokerage services to act as a hub for trading financial assets. TradeIt notably integrated with the U.S. crypto exchange Coinbase last year, according to a statement at the time; though it isn't yet clear which brokerage Yahoo is connected with for the new offering.

The financial news service first started its partnership with TradeIt in September 2017, letting users carry out in-app trading of traditional financial assets. The exposure to cryptos at the time was limited to data on prices and portfolio performance.

The site first started tracking bitcoin's price in 2014, as CoinDesk reported. Last year, the company expanded its price tracking service to cover over 100 cryptocurrencies across all its platforms globally.

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California Legislature Passes Blockchain Working Group Bill

The California Legislature has passed Assembly Bill 2658, which provides a legal framework for the recognition of blockchain technology in the state’s insurance code.

Introduced by Democrat Ian Calderon, the bill sought to amend Sections 1624.5, 1633.2, and 1633.75 of the Civil Code, Section 25612.5 of the Corporations Code, Section 16.5 of the Government Code, and Section 38.6 of the Insurance Code, with relation to blockchain technology, electronic signatures, and smart contracts.

New Inclusions and Definitions

Under previously-existing California law, the Uniform Electronic Transactions Act offered legal protection and enforceability to the use of electronic signatures in creating contracts, specifying that in the events of a requirement for writing or a signature, an electronic record or signature should suffice.

No mention was made, however, of electronic records or signatures secured using blockchain technology, which was a point of legal ambiguity for blockchain-based businesses. The new bill expands the definition of “contract” under California law to include “smart contract,” which provides legal basis for use of blockchain-based electronic signatures in sealing contracts.

It also specifies that any individual doing interstate or foreign commerce using blockchain technology to secure information they own or have rights to has access to the same ownership and usage rights in California.

Under the bill, Section 1633.2 of the Civil Code is amended to include a legal definition of blockchain technology, and Clause “e” in the section is amended to read as follows:

“‘Contract’ means the total legal obligation resulting from the parties’ agreement as affected by this title and other applicable law. ‘Contract’ includes a smart contract.”

Clause “h” is also amended to read as follows:

“‘Electronic record’ means a record created, generated, sent, communicated, received, or stored by electronic means. A record that is secured through blockchain technology is an electronic record.”

Clause “i” is amended to include the sentence: “A signature that is secured through blockchain technology is an electronic signature.” Clause “p” is also added to give a legal definition of “smart contract” under California law.

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Crypto Exchange Huobi Acquires Public Firm for $70 Million

Crypto exchange Huobi has become the largest shareholder of a public firm listed in Hong Kong, inching a step closer to a possible back-door listing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

Pantronics Holdings, the acquired firm, released a statement on Aug. 29 saying Huobi Group had completed the deal by purchasing about 199 million of its shares via two of the group's subsidiaries – Huobi Capital and Huobi Universal.

With that amount, Li Lin, chairman of Huobi Group and controller of the two subsidiaries, now own 66.26 percent of Pantronics and is effectively the largest individual substantial shareholder.

The deal could further give Huobi the opportunity of a back-door listing in the future – a process where a private firm enters the secondary financial market by purchasing a major number of shares of a public company.

Based on the announcement, the transactions were made at an average price of HK$2.72 (or $0.35) per share with a total amount close to $70 million. However, the number of shares acquired appears to fall short of what the exchange intended.

As CoinDesk previously reported, in a disclosure of interests filed by Pantronics on Aug. 21, Huobi was seeking to purchase 73.73 percent of the firm's ordinary shares which would have cost a total of $77 million. Pantronics' shareholding disclosures were further amended on Aug. 28 to reflect the change.

A spokesperson for Huobi Group declined to comment on the issue and said the firm is not authorized to disclose information other than what was in the announcement.

Further, the latest document on Wednesday offered a peek into Huobi's corporate structure, such as the stakes held by notable investors of Huobi.

Based on the document, while Huobi Capital is fully owned by Li himself, Huobi Universal's largest owners include Techwealth (58.44 percent), Sequoia Capital CV IV (23.32 percent) and Zhen Partners Fund I (7.46 percent). Among them, Techwealth is an investment company, of which Li owns 89.09 percent.

Meanwhile, Sequoia Capital CV IV is a fund that's solely owned by Sequoia Capital China and Zhen Partners is a venture capital firm launched by Chinese entrepreneur Xu Xiaoping together with Sequoia Capital China.

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India is Exploring a Central Bank Digital Currency for Payments.

The Reserve Bank of India (RBI) joins a growing list of global counterparts in exploring a central bank digital currency (CBDC) that would constitute the digital equivalent of the Indian rupee.

The RBI has established an inter-departmental group to explore the demand and plausibility of a blockchain-based digital currency to be used in domestic payments, the central bank said in its Annual Report 2017-18 [DPF] released on Wednesday.

The monetary regulator cited “rapid changes” in the global payments industry bought on by disruptive factors like the “emergence of private digital tokens and the rising costs of managing fiat paper/metallic money” as factors for the RBI exploring its own digital asset.

The central bank said:

“[A]n inter-departmental group has been constituted by the Reserve Bank to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency (CBDC).”

As reported by CCN earlier this week, the RBI discreetly established the new internal unit with a mandate to research cryptocurrency and blockchain technology under its roof. It is also believed that the unit has been operational for over a month and will also take an interest in drafting regulations for the usage and trading of public, decentralized cryptocurrencies like bitcoin.

The developments come at a time when Venezuela launched the world’s first state digital currency ‘petro’, a controversial token which Venezuelan president Nicholas Maduro claims is backed by the country’s vast oil reserves.

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Charlie Lee Recommends Buying Bitcoin in Bear Market.

The cryptocurrency market has now been in a bear cycle for more than two-thirds of the past year, and, as August prepares to roll in September, predictions from past months that the bitcoin price would test its all-time high in 2018 appear less and less likely.

However, even after this prolonged decline, Litecoin creator Charlie Lee says that the flagship cryptocurrency is still a good buy.

According to Lee, HE said that the dropoff in prices has created an excellent investment opportunity for long-term bulls that have cash-in-hand that they can afford to lose.

“It’s always good to buy on the way down to dollar-cost average your buy-in,” he said. “As long as you don’t spend money that you can’t afford to lose, I think that’s fine.

The former Google and Coinbase engineer cautioned against using borrowed funds to invest in bitcoin, a practice that became disturbingly common during last year’s fevered Q4 rally, noting that it’s incredibly difficult to predict short-term price movements and bear markets can in some cases endure for years.

He said:

“It’s hard to predict prices. I’ve been in this space for seven years now. I think sometimes it comes back within six months to a year, and sometimes it takes three or four years.”

Lee further noted that, at present, cryptocurrency prices primarily reflect speculative interest, not actual consumer adoption.

“It’s all about speculation these days, but, in the future, the price will reflect the success of the currencies,” he said, adding that there has been quite a bit of adoption this year even as prices have waned.

However, when asked if he would be buying back into litecoin (he sold all his LTC back in December, citing a conflict of interest in having the ability to swap price movements with his public statements), Lee said no:

“I sold because of conflict of interest, so I’m not going to buy my litecoins back anytime soon — or at all.”


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Bitcoin Exchange Mt Gox CEO Mark Karpeles Disputes U.S. Fraud Lawsuit.

Mark Karpeles has urged a U.S. federal judge in the state of Illinois to dismiss a fraud lawsuit brought on by former customers of the now-defunct bitcoin exchange Mt. Gox, by insisting that the U.S. court has no personal jurisdiction over him in Japan.

Representatives for Mark Karpeles told U.S. District Court Judge Gary Feinerman that their defendant has no sufficient ties in Illinois, nor did he conduct any business in the state to justify a lawsuit from disgruntled former customers in the state who have accused the former Mt. Gox CEO of conversion, negligence, and fraud, according to Law360.

The accusations are in relation to Mt. Gox’s bankruptcy as a result of hacking and alleged embezzlement in 2014. At the time, Mt Gox lost approximately one million bitcoins, worth around $400 million at the time and nearly 7 billion in current day prices.

A French national living in Japan, Karpeles faced an entry of default claim against him after Judge Feinerman directed the court to name the former CEO as the lead defendant in the customer claims case on Monday, August 13. Karpeles had until Friday, August 24, to oppose the request for entry of default for a hearing that was to be held on Tuesday, August 28. On the day of the deadline, attorneys for Karpeles filed a motion to dismiss the case, claiming he did not have the required ‘minimum contacts” of established ties in the state.

In an excerpt from his motion to dismiss the claims against him, his attorneys said:

“Mr. Karpeles expressly asserts that this Court lacks personal jurisdiction over him and preserves this objection and argument for all purposes…Because this Court lacks personal jurisdiction over Mr. Karpeles, this proceeding against him must be dismissed with no further actions taken, including but not limited to the entry of any default.”

Mt Gox creditors are now being asked to submit claims for reimbursements with a deadline on October 22. 

“Plaintiffs bear the burden of establishing personal jurisdiction,” Karpeles said in his motion while arguing he shouldn’t’ be named in the suit. “Blanket, conclusory assertions that this court has personal jurisdiction are insufficient.”

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New York District Judge Rules That CFTC Can Permanently Ban Crypto Firm.

The U.S. Commodities Futures Trading Commission (CFTC) has won a court order to permanently bar the operator of the New York-based firm CabbageTech Corp. for cryptocurrency-related “bold and vicious fraud,” Bloomberg reported August 24.

Earlier this year, Patrick McDonnell, cryptocurrency promoter and operator of CabbageTech Corp., was charged with “fraud and misappropriation in connection with purchases and trading of Bitcoin (BTC) and Litecoin (LTC).” McDonnell subsequently argued that the CFTC did not have the authority to regulate his commercial operations; however, New York district judge Jack B. Weinstein rejected his claim.

In July, Weinstein reportedly held a nonjury trial where he claimed that McDonnell ran a “boiler room,” deceptively luring investors in different states and counties using “trickery, false statements and misappropriation of funds,” Bloomberg notes. Weinstein delivered a judgement that McDonnell must pay $290,429 in restitution and $871,287 in penalties.

According to Bloomberg, CabbageTech was not represented by a lawyer, as McDonnell claimed he could not afford to pay for counsel. McDonnell also stopped appearing in court during the trial.

McDonnell was also involved in a different lawsuit by the CFTC against his another company, Coin Drop Markets. The CFTC claimed in the the lawsuit that customers who paid McDonnell and Coin Drop for crypto trading advice did not receive the advice they paid for, and that McDonnell shut down Coin Drop’s website and failed to respond to customers. The lawsuit also notes that Coin Drop was not registered with the CFTC.

Last month, speaking from Capitol Hill, Congressman Bill Huizenga argued that Congress should empower financial regulators such as the U.S. Securities and Exchange Commission (SEC) and the CFTC to regulate the cryptocurrency market in compliance with the same rules governing other currencies and stocks.

In May, the CFTC chairman Chris Giancarlo said he doesn’t see comprehensive crypto legislation coming from the federal level in the near future, pointing out that the statutes by which the CFTC is operating were written in 1935. He added that embracing a modern innovation like Bitcoin within terms invented decades ago will take time.

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Bitcoin Price Could Fall to $3,000, Says One of Crypto’s Most Bullish VCs.

Anthony Pompliano, founder and partner, Morgan Creek Digital Assets has predicted that bitcoin could fall as low as $3,000 in a complete turnaround from one of the market’s most bullish positions.

In a post, Pompliano stated that his January prediction of a $50,000 year-end bitcoin price was wide of the mark by as much as four years.

Changed Timelines

In July, CCN reported that Morgan Capital Management founder Mark Yusco predicted a bitcoin year-end price of $25,000, followed by a subsequent run culminating in a price exceeding $500,000 by 2024.

Pompliano however, says that after examining more data, this optimistic position has been reviewed.

He stated:

“Parabolic increases in price continue to take longer — each parabolic run is measured from the last all-time high to the new all-time high. The first rapid price appreciation took just over 300 days (2010-2011) and the second took over 900 days (2011-2013). The last parabolic price increase peaked at ~$20,000 (2013-2017) and took almost 1,500 days to complete.”

According to Pompliano, an extrapolation of this trend shows that bitcoin is unlikely to hit another all-time high until the middle of 2023, more than 2,000 days after the previous all-time high.

Measuring historical bear market data shows that the first bear market lasted for about 160 days in 2011, with the next one lasting 400 days between 2013 and 2014. Using that data to construct a trend Pompliano says, the current bear market is likely to go on for about 650 days.

In the event that this happens, what that would for crypto markets is that a full recovery from negative price movements is not due until the 3rd quarter of 2019, which is substantially longer than what most market participants presently anticipate.

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India’s Central Bank Quietly Forms New Cryptocurrency, Blockchain Research Unit.

The Reserve Bank of India (RBI) has reportedly established a new internal unit dedicated to researching and regulating new emerging technologies, specifically cryptocurrency, blockchain and artificial intelligence (AI).

Holding back on a formal announcement, the RBI has discreetly formed a new unit to research and possibly supervise disruptive technologies through draft rules in the future, the Economic Times reported on Monday.

The unit has been operational for a month and already sees an as-of-yet unnamed general manager leading it, according to the report citing two sources aware of developments at the central bank.

One of the sources reported added:

“As a regulator, the RBI also has to explore new emerging areas to check what can be adopted and what cannot. A central bank has to be on top to create regulations. This new unit is on an experimental basis and will evolve as time passes.”

The development comes at a time when the central bank – after years of public caution against trading cryptocurrencies like bitcoin – said it was necessary to regulate the sector during a Supreme Court hearing in July this year.

Earlier in April, the RBI issued a circular to all regulated financial institutions – including banks – to forbid them from transacting or providing services to companies associated with cryptocurrencies. The effect of the mandate has had a crippling effect on domestic cryptocurrency trading and has seen crypto exchanges oppose the banking ban that is now a matter being contested at the Supreme Court.

Senior government officials – not directly associated with the central bank – who are part of a panel discussing regulations for the sector have ruled out a complete ban, insisting that cryptocurrencies are likely to be classified as commodities.

State Cryptocurrency Powered by Blockchain

In a significant endorsement of the underlying decentralized technology powering cryptocurrencies, the research arm of the central bank insisted that blockchain technology had “matured enough” to enable the digitization of India’s fiat currency, the rupee, into a digital currency. The white paper backing those notable claims was published in January 2017.

The RBI’s executive director confirmed research toward a ‘fiat cryptocurrency’ in late 2017 with reports of naming the token ‘Lakshmi coin’ after the Hindu goddess of wealth and prosperity.

The RBI is also developing a blockchain platform of its own to enable and support multiple commercial banking applications in the country. As detailed previously, the central bank has already determined various areas in banking, financial and registry services ripe for blockchain implementation.

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Central Bank, Gov’t Caution Public over Fake Cryptocurrency Schemes

Multiple Chinese authorities issued a stark warning about illegal fundraising attempts claiming affiliation with the cryptocurrency industry in a bulletin Friday, August 24.

Sounding the alarm on “lawless entities” attempting to amass funds “using the banner of ‘financial innovation’ and ‘blockchain’” and distributing “so-called ‘virtual currency,’ ‘virtual assets’ and ‘digital assets,’” the document urges the public to be “rational” about blockchain-related information.

Its authors include China’s Banking Regulatory Commission, Ministry of Public Security and the People’s Bank of China (PBoC).

“Such activities are not really based on blockchain technology, but rather the practice of speculative blockchain concepts for illegal fundraising, pyramid schemes, and fraud,” it reads.

The document comes just days after authorities in Beijing announced they would ramp up efforts to block domestic access to cryptocurrency businesses located offshore.

A fresh batch of 124 platforms would be added to China’s Great Firewall, while the government is also taking steps to ban other activities which could be tantamount to endorsing cryptocurrency.

“The funds for these illegal activities are mostly overseas, and supervision and tracking are very difficult,” the most recent document meanwhile admits.

Despite focusing on genuinely illegal activities, the PBoC continues to ensure bonafide cryptocurrency businesses, ICO schemes and similar operators remain personae non gratae in China since bans on various facets of the industry came into force last year.

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Japan’s New FSA Chief Backs Crypto Industry Growth.

The new head of Japan’s primary financial regulator has backed the domestic cryptocurrency sector to grow while ruling out ‘excessive’ regulation for exchanges.

In statements certain to encourage the domestic cryptocurrency sector, Toshihide Endo, the newly appointed commissioner of Japan’s Financial Services Agency (FSA), told Reuters that the authority is aiming to ‘strike a balance’ between protecting consumers while promoting innovation within the sector without restrictive policies targeting cryptocurrency exchanges.

The regulatory chief told Reuters:

“We have no intention to curb [the cryptocurrency sector] excessively. We would like to see it grow under appropriate regulation.”

Japan has already taken a proactive lead among the world’s major economies by becoming the first nation to enact legislation that recognized cryptocurrencies like bitcoin as a legal method of payment while regulating cryptocurrency exchanges under a national licensing program.

At the time, the FSA was led by Nobuchika Mori, the agency’s longest-serving chief who took a technology-friendly approach to emerging technologies including blockchain and fintech after losing ground to the likes of China and South Korea. “The forward-thinking approach of Mori and the rest of the FSA allowed Japan to eventually evolve into the largest crypto exchange market in the world, easily surpassing the US and South Korea,” CCN contributor Joseph Young wrote earlier in June when it was revealed Mori would be stepping down.

While China and Korea see over 50% of their societies adopting cashless payments, Japan’s rate of adoption stands at relatively meager 19%. In a marked effort to catch up, the FSA and Japan’s Ministry of Economy, Trade and Industry (METI) embarked upon a FinTech growth strategy last year to promote cashless payments, targeting a 40% adoption rate within a decade.

Earlier this year, an infamous $530 million theft of cryptocurrency from Tokyo-based cryptocurrency exchange Coincheck – an unlicensed operator – led to the FSA ramping up its scrutiny into the sector with spot checks of exchanges, business suspension orders and even a rejection of an application to register a cryptocurrency exchange.

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A Fight Is Breaking Out Over Bitcoin Cash – And It Just Might Split the Code.

With bitcoin cash developers at each other throats, the year-old cryptocurrency might just split into two.

Created from a hard fork off the original bitcoin network after the scaling debate boiled over last year, bitcoin cash stakeholders seemed unified in their goal of boosting the cryptocurrency's block size parameter in the hopes of attracting more users and enabling more transactions.

But a few cracks started to pop up in this united front over the past year, as bitcoin cash developers had one technical disagreement after another.

And a new software release by leading bitcoin cash implementation, Bitcoin ABC, has been perceived by some as a subtle declaration of war within the developer community.

The software includes a suite of upgrades, including a smart contract feature that would support atomic swaps, a way of trading one cryptocurrency for another without traditional exchanges. And while many cryptocurrency projects are excited about the idea of interoperable coins, some big names in the bitcoin cash community don't agree with the changes and have – no surprise – been very vocal about it.

Leading the opposition is Craig Wright, nChain CEO and the cryptographer who claims to be bitcoin's pseudonymous creator Satoshi Nakamoto, though he's not provided any proof of this claim so far. And he's teamed up with Calvin Ayre, an entrepreneur and founder of crypto news site CoinGeek, to lead the resistance with a new bitcoin cash implementation called Bitcoin SV.

Bitcoin SV scraps Bitcoin ABC's scripts for its own – as well as pushes the block size parameter to 128 MB (bitcoin cash's block size is currently at 32 MB).

S they'd like to see activated.

This voting system, he hopes, will help resolve not only this caustic debate but also similar situations in the future.

Meanwhile, on Thursday, Cobra announced a similar effort called the Cobra Client. But rather than allow users to vote, the client simply removes all contentious code changes and replaces them with replay protection, a code change that will protect users from accidentally losing their money in the case bitcoin cash does indeed split into two.

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China Seeks to Block Access to 124 Foreign Crypto Exchanges.

Chinese regulators are moving to block more than 100 overseas crypto exchanges offering trading services to domestic investors.

Shanghai Securities Times, a mouthpiece of the Chinese financial authorities, reported on Thursday that the China National Fintech Risk Rectification Office has so far identified 124 trading platforms with overseas IP addresses but that are still available in the country.

The office now plans to step up its efforts in monitoring the space and to block internet access to these trading platforms, the report said.

Authorized in 2016 by China's State Council, the National Fintech Risk Rectification Office is a government agency that aims to protect against financial risk related to issues like peer-to-peer lending and cryptocurrency trading.

In September 2017, the People's Bank of China notably announced a rule banning initial coin offerings (ICOs) and, in effect, crypto trading platforms in the country. Following the notice, major exchanges based in China at the time moved their businesses overseas.

Currently, internet access to several major exchanges such as Binance, OKEx, and Bitfinex appears to be unavailable in China.

Today's report also said the agency will permanently shut down domestic websites and official accounts on the WeChat messaging app if they are found to be providing crypto trading and ICO services.

The agency is also in talks with third-party payments vendors that are required to scrutinize and halt accounts that are suspected of handling cryptocurrency transactions, the report added.

Just two days ago, several Chinese cryptocurrency media outlets were banned from operating on WeChat.

WeChat's owner Tencent confirmed with news source Caixin on Wednesday that the ban was instigated because the accounts were found to have provided crypto trading and ICO services. Some of them were ordered to shut down permanently, the report said.

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