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HTC Launches Blockchain Smartphone ‘Exodus’ with Flagship Specs

A decade on from the launch of the first ever Android phone, Taiwanese consumer electronics giant HTC has taken the wraps off its blockchain-powered smartphone, dubbed ‘Exodus’.


HTC has officially announced the early access release of Exodus 1, the company’s first-ever blockchain phone. Available for preorder on its website, the phone will ship sometime in early December and can only be purchased using cryptocurrency, specifically bitcoin and Ethereum.



With a 6-inch, QHD+ display at an 18:9 aspect ratio and a Snapdragon 845 processor with 6 GB of RAM and 128 GB of internal storage, the Exodus 1 also packs a 3,500mAh battery with IP68 waterproof rating, comparable to mainstream Android flagships currently sold in the market by Samsung and Google and other mainstream phone makers. The device is being sold at 0.15 BTC or 4.78 ETH, about $960 – also comparable to the Samsung Galaxy Note 9 or the Google Pixel 3 XL.


Announced with much hype as the ‘world’s first native blockchain phone’ earlier in May, HTC Exodus enables support for decentralized applications (DApps) like CryptoKitties and doubles as a hardware wallet for cryptocurrency adopters.

The phone’s “secure enclave” – a locked area secluded from the rest of the phone and the Android operating system – holds the user’s private cryptocurrency keys, HTC explained. Further, a ‘Social Key Recovery’ mechanism allows the user to regain access to their crypto funds in the event of losing their private keys by picking select trustworthy contacts.


HTC is inviting cryptographers to test the early access version of its device and is also releasing APIs for third-party developers.


Speaking to  CNBC, HTC’s decentralized chief Phil Chen stated:


“We believe blockchain is the new paradigm for smartphones and it will form part of HTC’s wider smartphone strategy. This marks a change in HTC, with increased focus on software and IP.”


The phone is available for pre-order in 34 countries including the US, the UK, Hong Kong, Singapore and a number of European nations, with the notable exception of China, where cryptocurrency trading and exchanges are effectively banned.


The HTC Exodus already has a competitor in its niche category, with Swiss startup Sirin Labs expected to release its own $1,000 blockchain smartphone Finney – to be manufactured by iPhone-maker Foxconn – before the end of the year.

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Police Filings Mount as Crypto Investors Demand Funds from WEX Exchange

Users of the long-troubled cryptocurrency exchange WEX have begun filing police reports after more than three months of being unable to withdraw major cryptocurrencies or fiat, CoinDesk has learned.

A WEX trader named Ruslan, who has been encouraging other users to seek an official investigation, told CoinDesk that as many as 35 such reports have been filed thus far online through the website of the Russian Interior Ministry. At least seven such reports have been filed since October, based on confirmation numbers reviewed by CoinDesk and checked against the Interior Ministry's website.

The fact that users of a cryptocurrency exchange that has operated at the fringes of the market would seek help from the government is itself notable. WEX was built on the ashes of BTC-e, the mysterious, long-running exchange that ultimately collapsed after U.S. officials seized its domain and then slapped BTC-e and its suspected operator with a massive $110 million fine.

But this summer, the initial enthusiasm around what was effectively a rebirth of BTC-e gave way to growing complaints around withdrawals, which manifested in sky-high prices well beyond those reported on more well-known exchanges. Those issues continue to this day, with the price of USDT – a controversial stablecoin that lost its parity with the U.S. dollar last week – trading for a whopping $6.99 on WEX.

As such, WEX traders – after months of demanding answers (WEX's last public message on Twitter was posted in late August) – are taking matters into their own hands, seeking an investigation in an effort to get their money back. What's more, recent developments continue to further stoke questions over who is actually running WEX and, by association, who is safeguarding user funds.

Ruslan told CoinDesk that he hoped to make law enforcement take measures against WEX's CEO Dmitri Vasiliev and "his conspirators" to prevent them from initiating any new projects in crypto.

"The main idea has been to show other users that they are not alone, that we can act together and fight for our rights by legal means," he said.

Neither WEX's CEO Dmitrii Vasilev nor WEX's official Twitter account responded to CoinDesk's requests for comment for this story.

Questions amid eye-watering prices

To be sure, users say they've been able to withdraw certain coins from WEX since the troubles began – but at a very steep cost.

Specifically,  tether (USDT), zcash, namecoin and peercoin have been available for withdrawal. But their prices on WEX are extremely high compared to the rest of the market, so buying them just to get money off the platform is an expensive proposition.

Other cryptos also maintain extraordinarily high price tags on WEX, with bitcoin trading at $8,602 (compared to about $6,450) and ether at $319 (versus roughly $204).

At some point, around late July, fiat withdrawals were opened but with commissions ranging as high as 45 percent. Even at that price, some users in WEX online chats said they were considering taking their money out, since the longer they waited, the less they trusted the exchange's management. But now, even this option is no longer available, users have told CoinDesk.

It was around that time that it became public that the owner and CEO, Dmitrii Vasilev, was going to sell the exchange to Dmitry Khavchenko, a militia fighter in Eastern Ukraine, according to a report by Russian media service RBC. Withdrawals were frozen in the wake of that report, and Vasilev later told CoinDesk he hadn't been in control of the exchange and that the administrators weren't communicating with him. The identities of the exchange's administrators, as well as those who actually custody user funds, has never been openly disclosed.

Khavchenko told CoinDesk last week that the deal was signed and the money passed to the seller. Yet according to the Accounting and Corporate Regulatory Authority of Singapore, where WEX is registered, as of Monday, Vasilev was still listed as the owner.

With traders devastated by the situation, trading volume on WEX, once in the tens of millions, has plunged to less than $1 million daily.…rom-wex-exchange/

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Caspian ICO Raises $19.5 Million for Institutional Crypto Trading Platform

Cayman Island-based fintech startup Caspian has completed an eight-figure ICO ahead of schedule.


Founded earlier this year, Caspian ties together the biggest cryptocurrency exchanges in a single user interface. The full-stack crypto asset management platform also offers compliance, algorithms, portfolio management, risk, and reporting. Its co-founders David Wills and Robert Dykes plan to channel 40 percent of the raised $19.5 million towards research and development.

The other 25 and 15 percent would go towards sales & marketing and application support, respectively. The founders have also allocated a considerable sum towards building new partnerships, managing accounts and legal, and miscellaneous administration costs.


“Selling out the crowd sale is a huge milestone in the growth of our company and our journey to build the first institutional grade full-stack crypto trading and risk management platform for professional traders and investors,” Caspian is a critical tool to assist the rapidly growing number of financial institutions seeking to trade cryptocurrencies.”

The news arrives at a time when a majority of ICO rounds have failed to raise capitals for their blockchain projects. The bearish mood of the crypto market has further made it difficult for projects to attract funds. Caspian nevertheless has managed to strike the right chords among investors for plenty of reasons.


Clients and Partners

Caspian is serving to the need for tools that could simplify crypto trading for an always-rising influx of investors. The platform explicitly targets institutional grade users, including crypto trading companies and hedge funds. Fidelity Investments, for instance, will be integrating the Caspian crypto asset management solution into its custodial solution. The company would utilize the platform to manage its customers’ digital assets, believing it would be more intuitive and user-friendly for their kind of work.


Including Fidelity, Caspian revealed that around 170 customers are waiting to sign up on their platform. The company has already added 15 names to its onboarding process, including Lykke, Bletchley Park, and ex-Point 72 manager Travis Kling’s Ikigai Asset Management. Caspian has also added 15 global institutions, including Techemy, Blockstars, OSL, and Galaxy Digital, which are live and trading on its platform.

US-based crypto exchanges Coinbase and Gemini have also entered a strategic partnership with Caspian, which will enable them to offer its sophisticated trading and portfolio management functionalities to their customers. Hong Kong-based p2p crypto exchange BitMEX has also integrated Caspian for the same services.


Notable crypto figures like Mike Novogratz, Mona El Isa, and Ari Paul have also joined the Cayman Islands startup as advisors.


“Cryptocurrencies will play an increasingly big role with institutional players, yet to date, the sophisticated trading and portfolio management tools have not been available for this asset class,” Mona predicted. “It is exciting to see Caspian fill this gap with high-quality crypto-tools.”


Caspian will see a full-launch by the first quarter of 2019.

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Hong Kong Stock Exchange Proposes Framework for Regulating Cryptocurrency

The Hong Kong Stock Exchange (HKEX) believes that legal frameworks around finance and cryptos should be the same.


The world’s sixth largest stock exchange in its research paper looks at the need for regulators to keep up with the pace of financial technologies. And if they lag behind, the existing laws of finance should be applicable to the companies in the FinTech space, based on their resemblance with the traditional services. Blockchain, for instance, could be brought inside the space of investment, trading, clearing, and settlement. Similarly, issuing digital assets on blockchain could be governed by an existing securities regulatory framework.


“Despite the difference in Fintech regulations among countries,” HKEX added, “the principle of consistency generally applies, i.e. financial services with the same nature are subject to the same regulations under the existing legal framework, so as to maintain fair competition, ensure regulatory effectiveness and prevent regulatory arbitrage.”


Supervisory Sandbox

Crypto innovations can improve a system as much as it can hurt it. The HKEX paper takes instances from other countries and their blockchain testing labs. Known as “supervisory sandbox testing,” the process aims to minimize risks by deploying blockchain and crypto innovation among a privately-governed network of users with minimal adaption requirements and regulatory restrictions. A full-scale deployment ensues only after the crypto product passes on the serviceability, the security, and the regulatory front.


Noting that supervisory sandbox practices are only limited to the banking sectors in its current format, the HKEX report recommends that these testing models should be extended to non-banking sectors such as blockchain and cryptos as well. Excerpts:


“Given that Fintech Supervisory Sandbox (FSS) is timely and flexible in making a regulatory response to market innovations, it can encourage Fintech innovations and minimize the negative impact of regulatory uncertainties with effective risk prevention and control. It is, therefore, the most suitable regulatory tool for Fintech.”


RegTech: When Regulators Innovate Their Own Practices

The HKEX research paper proposes that Hong Kong regulators establish an effective regulatory technology (RegTech) system by incorporating more use cases of AI and big data. The system would include a better, face recognition-enabled KYC process, sentiment monitoring, and identifying corporate relationships.


In the context of crypto and blockchain startups, a working RegTech system would allow them to approach legalities and auditing faster than usual. They would be able to put their business papers, including “registration information, annual reports, notices/announcements and information on its shareholders/legal persons and connected companies,” online to seek approvals in a timely fashion.

“There are now some business search engines (e.g. “Handshakes”) in the market which can help regulators analyze the nexus of commercial transactions and relationships in the financial market,” the HKEX paper added.


“These business search engines can analyze public information of listed issuers faster and in greater depth with the help of technologies, providing the accurate connections between companies and discovering possible insider dealing. This would be the primary application of big data in RegTech.

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How Binance is Legitimizing the Crypto Market by Eliminating Money Laundering

Binance, the world’s largest crypto exchange, has voluntarily engaged in an initiative to eliminate money laundering on its platform.


For years, despite the inherent lack of privacy measures on major public blockchain networks like Bitcoin and Ethereum that discourage the settlement of illicit transactions, a widely pushed narrative against crypto has been the suspected usage of digital assets by criminals.


Eliminating Easily Refutable Claims

Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, and many other major cryptocurrencies are not anonymous by nature. With Know Your Customer (KYC) and Anti-Money Laundering (AML) systems integrated by cryptocurrency exchanges, it is extremely difficult for criminals to utilize digital assets to settle the transfer of illegal proceeds.


Authorities and government agencies across the globe are well aware of the non-anonymous characteristic of blockchains, which could have motivated governments like the US, Japan, and South Korea to legitimate and recognize the cryptocurrency market.

This week, Binance has started to cooperate with Chainalysis, a leading blockchain analysis company that evaluates suspicious transactions and addresses, to improve its AML system and to further legitimize the cryptocurrency sector.




“Cryptocurrency businesses of all sizes face the same core challenge: earning the trust of regulators, financial institutions and users. We expect many to follow Binance’s lead to build world-class AML compliance programs to satisfy regulators globally and build trust with major financial institutions,” said Jonathan Levin, co-founder and COO of Chainalysis.


In 2018, some of the world’s most influential banks were cracked down for money laundering. Danske Bank laundered $243 billion from criminal groups, and as CCN reported on October 20, Nordea Bank, the largest financial group in the Nordic countries, is said to have taken several illicit payments from banks in the Baltic region.

With the institutional market of cryptocurrencies growing exponentially, the tightening of AML systems employed by public exchanges is expected to solidify cryptocurrencies as a recognized asset class and the digital asset market as a well-regulated sector.


Wei Zhao, the CFO at Binance, said that maintaining the firm’s vision of increasing the freedom of money globally, the exchange will continue to adhere to regulatory mandates in the countries it operates in.


“By working with Chainalysis, we are able to continue building a foundational compliance program that enables the next phase of our growth. Our vision is to provide the infrastructure for a blockchain ecosystem and increase the freedom of money globally, while adhering to regulatory mandates in the countries we serve.”


Importance of Compliance

The cryptocurrency sector is entering a new phase of development and growth, as Zhou explained.


During the 2017 bull market in which the valuation of the cryptocurrency market surged to $800 billion, the asset class obtained significant mainstream awareness in both countries that support crypto and regions that have established impractical regulatory frameworks to prevent local blockchain markets to flourish.

In a period in which governments are introducing increasing efforts to embrace crypto and blockchain businesses as a part of the fourth industrial revolution, voluntary initiatives by companies like Binance to legitimize the industry will ease the process of governments in regulating and acknowledging the global market.

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NYSE Owner’s Bitcoin Futures Market Will Open in Mid-December

Intercontinental Exchange (ICE), the owner of the New York Stock Exchange (NYSE), will list its highly-anticipated bitcoin futures contract in less than two months, on December 12.


Known as a physically-settled daily futures contract, the contracts will be backed by actual bitcoins held in ICE’s Digital Asset Warehouse. According to a press release, each futures contract will be validated through ICE Clear U.S., the firm’s clearing venue.


The press release states in part:


“Each futures contract calls for delivery of one bitcoin held in the Bakkt Digital Asset Warehouse and will trade in U.S. dollars and others. One daily contract will be listed for trading each Exchange Business Day.”


Launched in a partnership between ICE — the operator of 23 leading global stock exchange, including the NYSE — and other household names including Starbucks and Microsoft, the Bakkt venture aims to create an open, compliant ecosystem for digital assets.


Bakkt was created to be a “regulated ecosystem” that provides protection for institutional investors who want to get exposure to cryptocurrency. At the time of the announcement in September, Bakkt had said the physical bitcoin futures would be traded against the U.S. dollar, British pound sterling, and euro.

“A critical element to price discovery is physical delivery. Specifically, with our solution, the buying and selling of bitcoin is fully collateralized or pre-funded. As such, our new daily bitcoin contract will not be traded on margin, use leverage, or serve to create a paper claim on a real asset,” Bakkt had said at the time, responding to criticisms that the contracts could mask “hidden leverage.”


For every one purchase of a USD/BTC futures contract, there will be a delivery of one bitcoin into the owner’s account at settlement. That contrasts with the bitcoin futures markets on CBOE and CME, which are cash-settled, meaning that no actual cryptocurrency assets exchange hands at expiration.


Investors in Bakkt’s platform include Mike Novogratz‘s Galaxy Digital, Pantera Capital, and others.

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SEC Suspends Cryptocurrency-Related OTC Stock for False Claims

The Securities Exchange Commission (SEC) this morning suspended trading in the securities of American Retail Group, Inc (OTC: ARBG) as a result of allegations that the company made false statements involving cryptocurrency, including that it had partnered with an “SEC-qualified custodian.”


The accompanying statement from the agency references two August 2018 press releases from the Nevada-based firm, wherein the company claimed that its cryptocurrency products would be offered “under SEC regulations” and that its token sale was “officially registered in accordance [with] SEC requirements.”


Cracking Down

This comes after both the SEC and Commodity Futures Trading Commission  (CFTC) expressed concerns about the fact that more companies are making fraudulent claims regarding the organizations. Specifically, an investor alert was issued from the two organizations’ respective offices, the SEC’s Office of Investor Education and Advocacy and the CFTC’s Office of Customer Education and Outreach. The agencies warned about the use of their seal, or advertising advance knowledge of the markets. In addition, the alert pointed out that officials from either agency would never suggest or demand payment, or endorse any investment, product, or service, in any way.


The SEC can suspend trading in a stock for 10 days, or until reporting requirements are met, according to federal law. Robert Cohen, Chief of the SEC Enforcement Division’s Cyber Unit, said of the suspension, “The SEC does not endorse or qualify custodians for cryptocurrency,” and cautioned investors to “use vigilance” with regards to initial coin offerings.


False Claims



While many believe that the main issues with regards to trading in cryptocurrency are volatility and vulnerability to hacking , false claims about regulatory organizations seem to be a growing trend. Earlier this month, the CFTC filed charges against two men for actually impersonating regulators and forging documents in an attempt to deceive investors. The complaint, filed in the U.S. District Court for the Northern District of Texas, levied charges against two persons, Morgan Hunt and Kim Hecroft, and the complaint made clear that it was unsure whether the fraud involved two individuals, or one individual utilizing two aliases.


The defendants, who operated two businesses, called Diamonds Trading Investment House and First Options Trading, contacted clients and deceived them into believing that their funds could not be withdrawn unless a tax was paid to the CFTC. Hunt not only had an associate impersonate a CFTC investigator during a phone call conversation but also subsequently forged a document that bore the official CFTC seal.

The OTC sector is much different in that the companies are not required to disclose as much information as firms listed on securities exchanges, and the SEC had made similar investor warnings in the past regarding marijuana in 2014, when many marijuana-related OTC companies were making false claims in their press releases.


Read the full order below:


American Retail Group Trading Suspension by CCN  on Scribd

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Slush Pool: Don’t Upgrade Your Bitcoin Miners to Bitmain’s AsicBoost Patch

Bitcoin mining pool operator Slush Pool is urging miners not to upgrade their Antminer S9 devices to a new firmware patch released this morning by manufacturer Bitmain, as it will render the devices incompatible with Slush Pool.


“Dear Miners, we strongly recommend you DON’T UPGRADE your S9 devices with the new Bitmain firmware. It is not compatible with BIP310 standard and as a result also not compatible with @slush_pool,” the pool operator said. “We are working hard on providing our own fix asap and will keep you posted.”



CCN reported this morning that Bitmain had released a new firmware patch that allows Antminer S9 owners to activate overt AsicBoost, a technological upgrade that could result in a 13 percent increase in energy efficiency.


Bitmain released the firmware just days after braiins, the software development group that operates Slush Pool, published research demonstrating that Antminer S9 hardware was capable of running overt AsicBoost, though activation would require a software patch. The firm, which recently released an open-source bitcoin mining firmware system, said that it would integrate support for overt AsicBoost into that software, dubbed Braiins OS.



Slush Pool currently accounts for nearly 11 percent of the BTC hashrate. | Source: Coin Dance

According to Slush Pool, Bitmain’s firmware upgrade is not compatible with the BIP310 standard, which outlines a generic mechanism for specifying stratum protocol extensions. Consequently, users who upgrade their S9s will not be able to mine on Slush Pool until the firm is able to develop and implement a workaround.


In the meantime, miners would have to shift to other mining pools that are compatible with the upgraded firmware, such as and AntPool — both of which are owned by Bitmain.

Consequently, the timing of Bitmain’s firmware release, along with its lack of support for BIP310, has raised questions about whether the China-based bitcoin mining giant is seeking to take punitive action against Slush Pool for developing alternative Antminer firmware and encouraging users to disable the default firmware distributed by Bitmain.



However, when reached for comment, a Bitmain spokesperson told CCN that the reasons for publishing the firmware upgrade were “nothing more or less” than outlined in the original announcement.


“The reasons for it are explained in a blog post that we published and are nothing more or less than what is written in it,” the spokesperson said. “It appears that majority of the global network can avail the benefits of this optimization and assuming that a portion that just happened to not be capable of doing that is the reason that we had decided to work on releasing this optimization is far from logic.”

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DJ Khaled and Floyd Mayweather Sued Over Involvement in Centra Tech ICO

As warned earlier in the year by legal experts that celebrity ICO endorsers could face court action in future, it has now come to pass as a lawsuit has been filed against two of the more prominent ICO social media influencers of last year.


According to celebrity news publication TMZ, a class action lawsuit has been slapped against music producer DJ Khaled and boxing champion Floyd Mayweather. The suit has been filed by individuals who lost their money by investing in the Centra Tech initial coin offering. The two prominently endorsed the Centra Tech ICO on social media platforms with Khaled calling it a ‘game changer’ while the boxing champ even nicknamed himself ‘Floyd Crypto Mayweather’, ostensibly fully convinced of the ICO’s prospects.

In their suit, the plaintiffs allege that partly as a result of the efforts put in by Mayweather and Khaled, Centra Tech managed to raise approximately US$32 million in the ICO which was floated last year. The plaintiffs are now seeking to be compensated for their losses plus damages by the founders of Centra Tech as well as by the celebrity endorsers and promoters.


ICO Operators Indicted

The class-action lawsuit now raises the stakes for the founders of Centra Tech who were indicted with four counts of fraud (securities fraud, conspiracy to commit securities fraud, wire fraud and conspiracy to commit wire fraud) in May this year by the U.S. Attorney’s Office for the Southern District of New York.


In the indictment citation, the operators and founders of Centra Tech namely Raymond Trapani, Robert Farkas and Sohrab Sharma were accused of making material omissions and misstatements with a view of deceiving investors:

“…the defendants conspired to capitalize on investor interest in the burgeoning cryptocurrency market. They allegedly made false claims about their product and about relationships they had with credible financial institutions…”


From US$67 million to US$18 million…

When the Federal Bureau of Investigation arrested the three men behind Centra Tech, around 91,000 ether was seized. At the time this was worth approximately US$67 million but with the bear market the value has now plunged to about US$18 million.


The class-action lawsuit against DJ Khaled and Floyd Mayweather does not come as a complete surprise as the U.S. Securities and Exchange Commission (SEC) had already warned last year that celebrity ICO endorsements could be considered unlawful if they failed to meet certain standards.



According to the SEC, celebrity ICO endorsements were potentially in violation of the federal securities laws if they failed to explicitly disclose the arrangement the endorsers have with the ICO companies.


“These endorsements may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement,” read an SEC statement as CCN reported at the time.

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Samsung SDS, ABN AMRO to Link Blockchains in Europe’s Largest Shipping Port

Samsung SDS, the IT subsidiary of Korean giant Samsung, is collaborating with Dutch ‘big three’ bank ABN AMRO for a logistics blockchain pilot tracking the shipment of a container from Korea to the Netherlands.


In an announcement on Monday, Samsung SDS revealed details of a new partnership with the Netherlands bank for a joint blockchain pilot to track the multi-modal transport of a container from a factory in Korea to the Netherlands through the Port of Rotterdam, Europe’s largest shipping port by freight volume.

Specifically, the pilot will involve the linking of Nexledger, Samsung’s enterprise blockchain, and ABN AMRO’s Corda platform, developed by New York-based industry firm R3.


ABN AMRO claims the ‘special’ project brings two different blockchains together ‘for the first time in the rather short history of this technology’, adding ‘this takes place via an overarching ‘notary’ that connects entirely separate blockchains in Korea and the Netherlands.’


Traditionally, an international trade finance transaction involving shipments sees payments, administration and the physical transportation of containers occur in separate flows with a paper-intensive manual process. “We will be integrating all these flows in our pilot: from workflow management combined with track & trace to the digitisation of paper documentation such as waybills and the financing of handled freight or services” ABN AMRO’s commercial banking chief Daphne de Kluis explained.

The banking executive envisions “millions of euros” of savings in the long-term due to enhanced efficiency and transparency from blockchain-powered logistics chains.


The blockchain pilot will be entirely paperless and will electronically confirm receipt and payment of the trade alongside real-time sharing of documents that are viewable by the shipper, receiver and port operator.


The three parties, including the port of Rotterdam, will conduct the pilot in January. The Port of Rotterdam Authority, the operator of Europe’s largest and busiest shipping port, notably launched a ‘blockchain field lab’ in 2017 to research and develop applications based the decentralized technology.


Samsung SDS is already part of blockchain consortium comprising of a number of Korean authorities and logistics giants, working toward a unified goal to put all exports and imports in South Korea on a blockchain. In September this year, Samsung SDS entered an agreement with the Korea Customs Service (KCS) to develop a customs logistics service powered by blockchain technology.

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Dark Web Dealer ‘OxyMonster’ Forfeits $700,000 in Crypto with 20-Year Prison Term

US District Judge Robert Scola has imposed a 20-year prison sentence on 36 year-old Gal Vallerius also known as “Oxymonster” on the dark web drug hub Dream Market.


In June, CCN reported that the French-Israeli citizen was apprehended by police at Atlanta airport in 2017 while attending the World Beard and Moustache Championship in Austin Texas. He will now start his prison term in Southern Florida after being convicted of money laundering and narcotics trafficking.


Huge Crypto Seizure

In his plea agreement, Vallerius admitted to selling drugs like oxycodone, heroin, cocaine, fentanyl and Ritalin in exchange for cryptocurrencies including bitcoin and bitcoin cash on the dark web. More than 100 BTC and 121.95 BCH – equivalent to over $700,000 – seized from him as proceeds of illicit activity will now be forfeited to the government.


For many, the big question following the forfeiture is: “What becomes of this huge amount of crypto in the hands of the U.S. government?”

A development of this nature is not new. In 2015, after Silk Road creator, Ross Ulbricht was given a life sentence, the government took possession of 144,336 BTC found on his laptop. At a time when the price of one bitcoin was just over $300, the government realized a total of over $48 million selling to multiple auctions. Some later criticized the government’s hasty sale which prevented it from earning far more.


With his plea agreement, sources say Vallerius would have to “provide all necessary passwords” to enable the government gain access. It remains uncertain if the government will take similar action to that taken of Silk Road, or delay auctions till prices show upward movement. The rarity of this situation makes it hard for analysts to predict what decision the government will make.


Earlier this week, Irish native Gary Davis pleaded guilty to conspiring to sell drugs on the Silk Road under the alias Libertas. In 2017, the District Court in California also seized over $8 million worth of cryptocurrency from Alexandre Cazes who committed suicide in Thailand after being accused of running a dark web market AlphaBay. With more cases related to crime which might ultimately lead to similar forfeitures, the U.S. government might just be dealing with crypto auctions more regularly.

Some have however suggested that at a time when the U. S. Justice Department is investigating the possible manipulation of cryptocurrency prices, crypto acquired through the legal system is somewhat unlikely to last in the custody of government for long.

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Blockchain Might Make Voting Worse — Not Better: Crypto Researchers

Three researchers with the Initiative for CryptoCurrencies and Contracts (IC3) are questioning whether, as some proponents claim, blockchain technology will be able to change the internet voting sector for the better.


In an article published by Business Insider, the scholars argue that while blockchain technology might serve to revolutionize other industries, internet voting might be a sector that doesn’t benefit from the technology at all, and could potentially even be harmed by it.


Potential For Change

The researchers start off by acknowledging that they understand why blockchain technology is being considered as an option to optimize internet voting. There is little doubt in the fact that the cryptocurrency world has attracted billions of dollars for legitimate reasons and that it has clear potential to revolutionize everything from the global payments sector, to logistics, to retail, to  land ownership rights, among other sectors.


The immutable nature of blockchain means that one would naturally consider the fact that elections might be less susceptible to fraud if the technology is utilized. However, the three researchers argue that the basic issues with internet voting cannot be addressed, even by blockchain.


It’s Too Broken



While voting from a smartphone seems like a logical technological development, many cybersecurity experts have pointed out that it’s much more  complicated than one might believe. While the convenience of online voting might lead to more participation, many in the cybersecurity world come to the same conclusion as Ron Rivest, a professor at MIT and board member of Verified Voting. He said, “Voting is too important to put online.”


Blockchain technology is known to be extremely secure, but the researchers point out that this doesn’t mean that most hardware and software are not themselves  vulnerable, security-wise. Of course, this doesn’t even take into account the fact that internet  outages occur, as well.

Security experts are still working to understand the extent of Russian interference in the 2016 U.S. presidential election.  The fact that foreign governments and other adversaries will exploit every technical vulnerability possible to influence an election certainly doesn’t bode well for internet voting, even if it implements blockchain to maintain transparency.


In fact, the fact that blockchain is so secure might actually work against it. While it might sound counterintuitive, consider this: just because the blockchain is secure, that certainly doesn’t mean that the computing device used to vote in the election is hack-proof. If a phone is infected with malware that switches your vote at the last minute, the blockchain will record the vote safely, but it will obviously not be the right vote. As a result, the entire election could be compromised in this manner.

There is also the possibility of vote buying to evolve to a new level, given the anonymity and decentralization of blockchain technology. This shouldn’t be downplayed, as there have been elections where votes have been influenced for less than the cost of a tank of gas.

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Abu Dhabi, Belgium Ports Partner over Blockchain Trade Pilot Project

Abu Dhabi Ports has partnered with its Belgian counterpart to begin a blockchain-powered supply chain pilot project, the company  revealed in a press release.


Silsal, as the project is titled, uses an electronic blockchain ledger system to provide full cargo visibility and streamline trade flows and supply chains. If tested successfully, the Silsal project expects to automate the exchange, identification, and acknowledgment of cargo documents between Abu Dhabi ports and Belgium’s Port of Antwerp. Each stakeholder acts like a node of a blockchain network who gets to access and acknowledge the real-time supply chain of the shipped items.


Silsal Blockchain Pilot Explained

In the pilot, which will be conducted during the fourth quarter of this year, the Silsal project will run a Proof-of-Concept test in which it will handle international documents to the Port of Antwerp using blockchain technology. These documents will likely be verified by all the stakeholders interconnected with each other through a secure link over an electronic ledger. Once acknowledged, the record will be permanently stored in a block that will remain accessible by the network’s participants — anytime, anywhere.


The use of blockchain to innovate traditional monitoring and record-keeping systems expects to improve the costs, time, and integrity of the international trades. A similar practice is already taking place across the supply chains of other industries, particularly in commodities. Shipping companies like FedEx have also joined the blockchain bandwagon by lining up their private supply chain initiatives.

Dr. Noura Al Dhaheri, CEO of Maqta Gateway, a subsidiary of Abu Dhabi Ports, explained the potential of their project while speaking at GITEX Technology Week. He said:


“We realized early on that blockchain technology can provide the very things necessary for reliability and integrity in the increasingly complex global supply chain. Silsal’s first international step today, working with the Port of Antwerp, is a manifestation of Abu Dhabi Ports’ commitment to secure Abu Dhabi’s global standing as a premier logistics, transport, and trade hub, and support the Abu Dhabi Economic Vision 2030.”


Digital Abu Dhabi

Abu Dhabi Ports is also building more undisclosed DLT projects in a partnership with Abu Dhabi Global Market, the International Financial Centre in Abu Dhabi. The region aims to become a digitally transformed area in the next five years by developing solutions on the top of innovative technologies which, in addition to the blockchain, include artificial intelligence and IoT.

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Blockchain Industry on Track for Nearly 150 Mergers & Acquisitions in 2018

The prolonged cryptocurrency bear market has seen a substantial number of organisations finding new opportunities for growth via consolidations and acquisitions. According to a  CNBC report, investors are seeking more and more deals within the blockchain space, even in the face of declining or stagnant crypto prices.


Despite market volatility and a peak-to-trough bitcoin price decline of nearly 70 percent, the past year has witnessed an increase in merger and acquisition activities in the past year as revealed by data from JMP Securities and PitchBook.

According to the data, token values associated with startups have remained correlated to bitcoin rather than actual company value. This is perhaps understandable when taking into account the fact that bitcoin has been in existence for about a decade, which makes it an elder statesman compared to most of the crypto industry.


Speaking to CNBC, Satya Bajpai, a specialist consultant on mergers and acquisitions and head of blockchain and digital assets investment banking at JMP, explained the phenomenon.


In his words:


“Even for great businesses, the value of the token remains correlated to bitcoin, which can create an ideal opportunity for strategic acquirers.”


JMP’s data shows that mergers and acquisitions are becoming a more favoured option versus starting up new companies or divisions from scratch. Over the past year, more than a hundred cryptocurrency or blockchain-related deals have already been announced, with a projection of 145 by the end of 2018. To put that figure in perspective, the equivalent figure for all of 2017 was 47 at a time when the bitcoin price touched $20,000.



Cryptocurrency giant Coinbase has been one of the industry’s most prolific companies when it comes to “acqui-hiring.”

Bajpal describes the current strategy adopted by most investors as a “land grab” approach, where they are compelled to buy rather than build. Explaining that building takes quite a long time, he says companies benefit from the expensive option of buying because the acquired entity already has some technology and, often, market-ready products.


In a chat with CNBC, Bajpal stated that that the strategy is also a land grab for talent as the new entity benefits from having employees with business and technical backgrounds because blockchain engineers are not easy to come by. He specifically referenced the example of Coinbase’s acquisition of, which saw Earn’s founder and CEO becoming Coinbase’s first-ever CTO.

He also added that users  — an essential part of any startup’s assets — are on-boarded almost immediately through an acquisition.


It is not all sunshine and rainbows, however, as mergers and acquisitions have some challenges, too. Given the nascency of the space, valuations are not always simple. Companies that have raised funds through initial coin offering (ICO) listings have to consider the different forms in which new investors are compensated. This gets even more complicated as the new companies are often still in the developmental phase when new offers begin to spring up.

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Bitcoin Network Congestion Reaches 95%, But Fees Hold Steady

Popular cryptocurrency analyst Willy Woo has observed what many others in the community have overlooked. While this year’s market downturn has shaved off approximately 70% of BTC’s value, the Bitcoin network is quietly gaining scale. It’s a sign of what many blockchain pioneers have been touting during the market downdraft, which is for developers to keep their heads down working without being distracted by the noise that’s surrounding cryptocurrency prices.


Congestion on the Bitcoin network reached 95% last week, but if you were transacting in BTC, you wouldn’t have experienced an uptick in transaction fees, which remain at approximately $0.1 — even for transactions as large as $194 million. Woo tweeted a comparison of the 2017 congestion of up to 85% versus 2018 peak congestion of 95%, illustrating that despite the higher congestion today fees remain “nominal” and below year-ago levels.


He said:


“Meanwhile… during the bear market no less… Bitcoin’s blocks peak above 95% full without anyone noticing, the fees and confirm times remain nominal. Bitcoin of 2018 is not Bitcoin of 2017. The protocol is quietly improving.”



Source: Willy Woo on Twitter

The data appears to be based on the 1MB ceiling, though Woo later updated the chart to reflect “witness blocks in the picture.”



Source: Willy Woo on Twitter

According to the Blockchain Council, a 1MB block is equivalent to approximately 2,000 transactions, though the average number of transactions per block is reportedly below that. The adoption of SegWit, which has a 4 million unit block weight ceiling, has expanded the capacity for blocks.


The Bitcoin blockchain has the capacity to perform approximately 7 transactions per second (TPS), which is a far cry from the tens of thousands of TPS that the Visa network can handle. But, as Andreessen Horowitz General Partner Katie Haun recently explained in recent days: “We are in the dial-up days. Architecture hasn’t been built yet to scale-up programmable money.”

In less than two years, the Bitcoin block reward is expected to be halved from 12.5 to 6.25 BTC, which will place a greater emphasis on fees generated by the mining process.


Investors will test the mettle of the network again in Q1 2019, which is when crypto traders like Michael Novogratz of Galaxy Digital predict institutional capital will come off the sidelines.


Meanwhile, as Haun pointed out, like gold, “Bitcoin is a good store of value because it’s easily divisible, doesn’t require a lot of maintenance and [is] hard to counterfeit.” And as it continues to gain scalability, Bitcoin will move closer to Satoshi’s vision of being “a peer-to-peer electronic cash system.”

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Interview: iVendPay Founder Sergey Danilov on Bringing Cryptocurrency Vending Machines to Asia

Smart vending machines capable of handling cryptocurrency payments will be installed throughout Malaysia and Israel by the end of 2018 as a result of a partnership between iVendpay and GoByte.


Sergey Danilov, the founder of the iVendPay project, told CCN:


“The partnership between iVendpay and Gobyte is caused by the high demand for universal services allowing to pay for goods with cryptocurrency in everyday life. The choice in favor of GoByte was made due to the peculiarities of this cryptocurrency, designed for instant processing of micropayments with a small commission. Payment for purchases using GoByte in any vending machine equipped with iVendPay takes less than 3 seconds.”


Sergey also sent a YouTube video of the machine in action:




GoByte is a fork from the Dash cryptocurrency  aimed at processing merchant transactions. GoByte claims to be an improvement on the original Dash currency with a separate payment infrastructure that allows lower or non-existent fees for processing payments.


The smart vending machines process payments in under 3 seconds with no fees. GoByte CEO Hisyam Nasir told CCN that the first version of GoByte Pay web platform has recently been released for integrations with web hosting commerce modules and mobile apps, something that will enable phone-to-iVendpay machine transactions to go smoothly.

This doesn’t mark the first time vending machines have been equipped to process cryptocurrency payments. In 2015 CCN reported that there were vending machine in Seattle that allowed people to purchase marijuana using bitcoin. Earlier this year a startup called Civic launched a vending machine prototype designed to identify whether customers were over the age of 21 and dispense beer in exchange for bitcoin.


While bitcoin certainly has more brand awareness and volume than any other cryptocurrency, it’s not necessarily the best cryptocurrency for microtransactions such as vending machine purchases of coffee and snacks. High fees, long wait times, and massive energy consumption per transaction make it less than an ideal choice.


While the Lightning Network scaling solution may yet prove successful for bitcoin adoption, projects like GoByte specifically designed to handle small transactions quickly with low or no fees have a strong use case as well, supporters allege, and it will be interesting to see whether smart vending machines allowing for crypto-transactions will become more widely adopted in other countries.

Allowing people to easily spend their cryptocurrency on real-world goods has long been one of the obstacles to mainstream cryptocurrency adoption. Even something as simple as letting someone take out their phone and quickly buy a cup of instant coffee from a vending machine using their crypto holdings could make a big difference to how the value of cryptocurrency is perceived worldwide.

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Bitcoin Hits New Yearly Low Volume, Only Way to Reverse Trend is a Big Spike

Over the past 24 hours, Bitcoin has achieved a new yearly low volume, demonstrating a lack of momentum and strength to recover to the higher region of $6,000.


On Coinmarketcap, the volume of Bitcoin fell to $3.1 billion while it fell to $1.91 billion on CoinCap. The previous yearly low point of the Bitcoin volume was $3.2 billion on Coinmarketcap and $2 billion on CoinCap.


The low volume of Bitcoin, possibly affected by a decline in trading activity on a Sunday, could have a negative impact on the short-term trend of the dominant cryptocurrency.


Not so Fast

Carpe Noctom, a respected cryptocurrency trader and technical analyst, stated that if BTC can close above the $6,800 mark in the days to come regardless of the low volume, a breakout above the $7,000 mark is still a possibility.


“Candle close above 6800-7100 and we got ourselves and ol’ fashion bull trend,” he said, emphasizing the two-month stability period BTC has experienced since August 9.




Apart from two short-term price movements, the price of BTC has been in the range of $6,300 to $6,700 for nearly three months, demonstrating its highest level of stability in recent months.


Generally, technical analysts have stated that the low trading activity in the cryptocurrency exchange market can be attributed to the concerns of investors in the uncertainty in the market. A fairly large portion of traders in the market are waiting for a move to breakout, either on the downside or upside, to confirm a short-term price movement.

BTC has not been able to record any major movement since early August.


Historically, BTC has tended to demonstrate minor recovery on Mondays, following two low volume days throughout the weekend. Over-the-counter (OTC) markets typically open in the beginning of the weak and close its operations prior to the weekend.


One positive component in the mid-term trend of the cryptocurrency market is that major digital assets including Bitcoin and Ethereum have held and maintained support levels relatively well in the past several months.


Bitcoin in particular has defended the $6,000 support level with ease since mid-2018, building a foundation that could enable the asset to initiate a strong short-term rally in the near future.


“The longer #Bitcoin remains ‘boring’ above $6k, the more excited you should be for the next bull run. Stronger the base, larger the launch,” cryptocurrency investor Alex Saunders said.


State of Tokens

Tokens have started to demonstrate decent gains against both BTC and the US dollar, which often occurs in a sideways market.


Augur, Decentraland, Golem, and Qtum have recorded gains in the range of 5 to 10 percent, as the price of BTC has maintained stability in the $6,400 to $6,500 range.

On October 21, a large amount of Tether (USDT) and other stablecoins were moved to various exchanges, which could have been allocated to tokens.

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Russian Church Forced To Pay For Crypto Mining

A court ruling in Russia recently determined that a church must pay higher electricity fees, due to the fact that they are running cryptocurrency mining hardware on the property.  Although this is an isolated court ruling, it certainly has implications for private citizens, who are mining in their own homes.


Church Investigated

“Grace”, the evangelical religious organization involved, denied that the electricity was used to mine cryptocurrency.  This is not surprising, considering that Eastern Europe enjoys low subsidized electricity rates, which leads many to mine crypto in their own home.  The current legislation requires those who mine cryptocurrency to pay higher electricity rates, a claim which the church, located in Irkutsk, Russia, has denied.


The regional electricity provider, Irkutskenegro, noticed a significant electricity spike from the church last year.  Inspectors from the company even found computing hardware at the church, in a server room on the second floor. The company has stated that the amount of electricity consumes actually endangers the neighboring area.


The church asked for a refund of 1.1 million rubles from the company, which totals to over $16,000 USD.  Irkutsk Arbitration Court sided with Irkutskenegro, despite the church’s claims that the electricity was utilized for heating purposes and to produce religious material.  The court pointed out that the time period in question was during the summer, so the “heating” explanation was unlikely.


Further Implications

Energy is much cheaper for private individuals and for certain organizations, including churches, in Eastern Europe.  In fact, the court ruled that even though the church did consume more electricity, that it should still be charged lower than the standard rate.  Many wonder whether this will cause repercussions, and whether the state will force private individuals to start paying higher rates in order to mine cryptocurrency.


This is not the first time that an organization has been mining cryptocurrency when it shouldn’t have in Russia, as Russian engineers  at the Russian Nuclear Center are facing criminal charges for using a supercomputer to mine bitcoin earlier this year.

One of the reasons that cryptocurrency mining has gained popularity in Russia is due to Dmitry Marinichev, Vladimir Putin’s advisor for internet affairs.  In fact, he recently raised  millions of dollars for the ICO of the Russian Miner Coin.


Of course, time will tell whether this court ruling will actually affect those who mine cryptocurrency in the comfort of their own home.

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Paxos Standard Emerges as Early Leader in Stablecoin Sprint

Tether is experiencing an unprecedented challenge to its status as undisputed stablecoin market lodestar.


With over 50 active stablecoin projects emerging around the world and even more set to debut in the weeks and months to come, these are fraught times for the stablecoin founded in 2014, as the market explores alternatives to USDT amid suspicions of overstated US Dollar reserves and lack of transparency. CCN recently reported that four stablecoins were added to OKEx and Huobi  namely, Paxos Standard Token (PAX), Gemini Dollar (GUSD), TrustToken’s True USD (TUSD) and Circle’s USD Coin (USDC).


PAX Takes The Lead

According to data from CoinMarketCap, of the chasing pack behind Tether, PAX is in the lead with a market capitalisation of $21.72 million, followed by TUSD at $19.62 million, GUSD caps $3.47 million, leaving USDC in the rear with $1.16 million. In only a few weeks of trading, PAX boasts of 63,206,483.08 PAX ($64,244,109.41) of total supply.


Built on an Ethereum framework, PAX is designed to offer all of Tether’s capabilities in addition to a decentralised accounting function and the supervision of financial regulators as a fully regulated asset, which gives investors greater confidence than the somewhat murky nature of Tether.

In an interview with  Forbes, Charles Cascarilla, CEO and co-founder of Paxos said:


“Paxos Standard gives financial markets the power to transact in a fully USD-collateralized asset with the benefits of blockchain technology and oversight from financial regulators. We believe that Paxos Standard represents a significant advancement in digital assets, leveraging the oversight and stability of the traditional financial system and enabling a frictionless global economy…In the current marketplace, the biggest hindrances to digital asset adoption is trust and volatility. As a regulated trust with a one-to-one dollar-collateralized stablecoin, we believe we are offering an asset that improves on the utility of money.”


Crypto Community Ditches Tether, Backs PAX

Amidst investor fears fueled by the Tether Foundation’s perceived lack of transparency, USDT recently experienced a downturn followed by a sudden investor exodus that took more than $300 million out of the market. As a result, Tether is currently in a very uncomfortable position as many USDT holders panic-sell and look for alternative assets to hold value.


Following the sudden exodus, Tether hit a record low of 85 cents to the dollar on Kraken and 96 cents on Binance, both of which are hugely significant events for an asset whose value rests almost entirely on its tight USD peg. Bitcoin meanwhile jumped nearly 9 percent as USDT holders pumped funds into it and other cryptos viewed as less of an exposure risk than Tether.

In the midst of all this, a number of exchanges are also quietly dropping USDT in favour of alternative stablecoins. Last month, Digifinex, a top-20 exchange announced that it was replacing Tether with TUSD, citing trust issues. According to Digifinex co-founder Kiana Shek, the platform had been “looking to get rid of Tether for a hile”.


A number of prominent crypto industry figures have contributed to the continued USDT selloff with pronouncements promoting alternatives to Tether and highlighting PAX as a key alternative.


Binance CEO Changpeng Zhao recently tweeted:



Whether all of this will actually result in PAX taking Tether’s position is still mere speculation at this point, especially given that even after last week’s exodus, Tether still has a market capitalisation of $2 billion, which is several times more than its nearest challenger. What is clear however is that in the event that rumours of Tether’s death are not exaggerated, PAX seems best-placed to inherit the stablecoin throne.

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Bank of Japan Deputy Governor Downplays Cryptocurrency Plans

Masayoshi Amamiya, Bank of Japan’s Deputy Governor, stated on Saturday that it was unclear whether digital currencies could enhance the monetary policies of central banks.  He elaborated that the Bank of Japan had no plans whatsoever to issue a cryptocurrency.


Ongoing Debate

Mr. Amamiya said that there was “quite a hurdle” for cryptocurrencies to overcome fiat currencies, and pointed out that they are mostly used as a means for investment rather than for actual payment or settlement.  However, it is clear that this trend is changing, as Ripple, a cryptocurrency in the global payments space, has announced high-profile partnerships with financial institutions such as PNC Bank, a Top 10 United States bank with over 8 million customers, and more recently with the largest private foundation in the United States, the Bill and Melinda Gates Foundation.


This is not the first time that someone associated with a central bank has weighed in on cryptocurrency, and whether it should issue a digital currency.  Mario Draghi, the president of the European Central Bank, and widely considered one of the most important figures in global finance, recently  downplayed the idea, stating that the “underlying technology is still fragile”.


Conflicting Opinions

There are many in the cryptocurrency community who are not surprised at the fact that many central banks tend to downplay cryptocurrency, as it could disrupt the entire global payments and settlement sector, and as a result, is arguably a direct threat to central banks.  


Recently, the head of the Central Bank of the Russian Federation, Elvira Nabiullina, was vocal about the fact that investor interest in cryptocurrency was waning, and that “cryptocurrency fever was disappearing”.  She also acknowledged that initial coin offerings were an effective way to raise funds, but was quick to point out the high percentage of scams in the sector, as well.

Despite these statements from respected figures at central banks, there are other organizations that believe otherwise.  The World Trade Organization, which many consider to be the number one organization in terms of regulating international report, recently released a report that seemed to praise digital assets and their potential.


The report, called “The Future of World Trade: How Digital Technologies Are Transforming Global Commerce”, was not ambivalent in its claims, stating explicitly that “blockchain has the potential to profoundly transform the way we trade, who trades, and what is traded”.  The report singled out Ripple specifically in terms of its potential with regards to the global payments sector, as well.

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