November 22

Bitcoin Miner Capitulation Drops Market

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‘If investors see activities and operations related to virtual currencies in any form, they can report to authorities,’ the bank said in today’s announcement, stressing the distinction between blockchain technologies and virtual currencies. 

The bank plans to monitor crypto-related activities continuously and ‘nip the small and early-stage businesses in the bud to protect investors.  

The bank also listed some of the most common “fraught” crypto activities ranging from initial futures offerings, initial exchange offerings, initial mainnet offerings, security token offerings and ICOs.”

See Also: China: Shenzhen Identifies 39 Crypto Exchanges Defying Trading Ban
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“Decentralized, privately-issued digital currencies are not simply a means of payment, but also tools that can shift functions traditionally performed by the government to the private sector.

Digital currencies at scale raise not only concrete questions about money laundering, monetary policy, and other topics, but also very abstract questions about self-government. Those engaged in digital currency markets should therefore expect that policymakers, in pursuing the public interest, will take a very hard look at these issues.”

See Also: CFTC Chair on Crypto Regulation: We Don’t Want to Snuff out Innovation

“If you’re looking for crypto presents for the holiday season, we’ve rounded up a selection of gifts to suit all wallets.”

How to Earn the DAI Savings Rate

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“The move would likely give FDAS access to a broader market and liquidity for smaller trades. OTC desks primarily trade with larger institutions and high-roller “whale” investors, whereas exchanges serve retail traders and smaller institutions.

After FDAS has onboarded New York clients, it plans in the new year to begin onboarding new assets, developing its trading capabilities, scaling its business and pursuing licenses in other states where it is not currently doing business.

[We’re] seeing traction up-market for institutional customers for security tokens and other financial assets. We think this trend will really show up in Q1 2020 when customers with potential registered offerings plan to come to the market.”

“Alibaba Pictures reportedly plans to tokenize distribution rights for its new film “Striding into the Wind.” The overseas distribution rights will reportedly be released on SingularDTV’s Ethereum blockchain-based distribution portal EtherVision.

The tokenization of movie ownership, could radically change film financing. As it currently stands, film financing is generally limited to a small number of high-wealth investors, but with tokenization, smaller investors could also benefit from a movie’s success.”

“In rolling out its staking services to a global investor base, Coinbase Custody appears to be leveraging its brand recognition to promote staking as a key emergent investment strategy for the blockchain and cryptocurrency space.”

Stablecoin issuers may themselves compromise the potential financial autonomy of citizens by introducing blacklists that enable them to freeze stablecoins held at specific addresses.

The issuers of Tether (USDT), USD Coin (USDC), TrueUSD (TUSD), Pax Standard (PAX), and Binance USD (BUSD) all have this functionality, the report notes.”

“The European Investment Fund (EIF) and the European Commission have together put up €100 million (over $110 million) for a dedicated investment scheme that will make capital available to AI and blockchain projects via VC funds or other investors.

The fund could ultimately raise up to €2 billion ($2.2 billion) under the InvestEU Programme.”

GDLCF will purportedly be the first publicly-quoted security based on a basket of digital currencies in the United States. As of Oct. 31, 2019, DLC included 80.6% of Bitcoin, 9.2% of Ether, 6.0% of XRP, 2.5% of Bitcoin Cash (BCH), and 1.7% of Litecoin (LTC).”

Augur v2

November 21

“Blockchain is among 17 categories of financial technologies, including cloud services and artificial intelligence, to be regulated under the new standards. 

The current regulations for financial services are not clear and strong enough to guide high-quality developments in the industry.”

See Also: Chinese Tech Capital Shenzhen Issues Warning Against Crypto Activities

“In the new bill called the “Managed Stablecoins are Securities Act of 2019,” Garcia reportedly argued that Libra and other managed stablecoins ‘are clearly securities under existing law.’

We have trusted brands marketing digital assets to consumers as secure and stable […] Everyday investors need to know they can trust the issuers behind their financial assets.”

“A Binance spokesperson refuted media reports that Chinese police had raided and subsequently shut down the exchange’s Shanghai offices. Furthermore, the spokesperson stated that no such offices even exist.

The spokesperson also stated that Binance is being targeted in the Chinese media, adding that there has been ‘a recent spike in the number of negative articles and activities against Binance‘ in the country.

We also encourage our friends from the media to verify if their “sources” are telling the truth or presenting their own agenda.”

See Also: Binance ‘Buidls’ Bridge With India, Acquiring Leading Bitcoin Exchange

“Users pay node operators for bandwidth using OXT tokens, which will be generated at launch.

Orchid is a bandwidth market where node providers stake tokens to advertise their services using the Ethereum blockchain.

The areas of VPNs and secure communications need to be decentralized, thus supra-sovereign, in order to guarantee privacy from nation-state surveillance or interference.”

See Also: Eth2 Update #4

“Vermont’s largest electric utility is using blockchain platform LO3 Energy for its new energy marketplace pilot project. It allows Vermonters to buy and sell renewables with a blockchain storing their transactions.

There’s a huge appetite for local businesses to be 100 percent renewable and at the same time there’s an increasing amount of home solar production. This platform pairs the local supply with demand at the grid edge and we are delighted to be working with GMP to bring this market to commercial reality.”

The website now allows visitors to track prices for major cryptocurrencies, providing CMC-based data. Yahoo Finance’s cryptocurrency screener page provides pricing for a total of 118 digital currencies.

Additionally, Yahoo Finance plans to add two CMC crypto indices — Crypto 200 and Crypto 200 EX. Apart from crypto pricing, CMC will also provide some educational information to develop crypto markets’ adoption on Yahoo Finance.”

“A setback came when Canaan lost its biggest bank, Credit Suisse, just last week. As a result, the size of the IPO was dramatically reduced — over 75% less than expected. 

The successful completion nonetheless makes Canaan the first Bitcoin mining giant to navigate an IPO, beating major competitor Bitmain, which plans to do the same.”

Venezuela plans to back its national oil-pegged cryptocurrency, the Petro (PTR), with 30 million barrels of crude oil to serve as a ‘liquid, physical, material backing.’ According to the report, the sharp decline in the quantity of the Petro’s backing was caused by United States sanctions on Venezuelan state-owned oil company PDVSA.

Despite Maduro ordering the country’s major bank, Banco de Venezuela, to start accepting PTR in July, Reuters has reportedly been unable to find evidence of any use of the Petro as a means of commercial exchange.”

Large crypto exchanges appear to have stopped misreporting their trading volumes in 2019. The 12 exchanges listed include Huobi, OKCoin, UPbit, Bithumb, Bit2c, Bitbank, Bitso, CoinCheck, Coinfloor, CoinOne, Korbit, and Zaif.

While the majority of exchanges appear to have moved away from faking volumes, there were still some exchanges that saw suspicious activity.”

See Also: Blockchain Sleuthing Firm Chainalysis Slashes 20% of Workforce

November 20

“While the U.S. central bank is looking at whether a fully digital dollar would offer benefits to the U.S., Powell said the Fed is not actively developing one. Further, a digital national currency may not offer advantages to the U.S. that it may do to other nations.

Overall, Powell concluded that the Fed has ‘not identified potential material benefits of [a] general purpose CBDC to the implementation of monetary policy relative to our existing tools.‘”

See Also: In Wargaming Exercise, a Digital Yuan Neuters US Sanctions and North Korea Buys Nukes

“Ten wallets, 11 blockchain explorers, one integrated development environment, one application programming interface and 11 clients have taken part in the network’s development. 

The Libra Association continues to develop the stablecoin’s network and has plans to introduce a range of new features in the upcoming months. The organization also plans to deploy 100 nodes on the mainnet, which will represent a mix of on-premises and cloud-hosted infrastructure.”

See Also: Development Update
See Also: Too Early to Tell if Libra Is a Security, CFTC Chairman Says

“Libor is a benchmark interest rate controlled by global banks including Barclays, Deutsche Bank, Royal Bank of Scotland and UBS that determines the cost for banks to lend money to each other. Ameribor is an alternative backed by the American Financial Exchange (AFX) and Cboe Futures and will use a permissioned version of ethereum and two tokens to do the same thing.

Between 2012 and 2015 billions of dollars in fines and settlements were levied against the Libor banks who manipulated the rate to their benefit. Now, in addition to AFX’s work with Ameribor, Giancarlo says a number of specialized alternatives are rushing to meet the demand for trust-worthy, transparent alternatives.”

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“The proposal comes as a response to demand from international institutional investors for regulated products to be able to hedge their exposure to payment tokens such as bitcoin (BTC) and ether (ETH).

Payment tokens such as bitcoin and ether are currently not categorized as an underlying assets for a derivative product under the oversight of the SFA. However, MAS said it has received requests to put such assets under its regulatory remit in order for them to be listed on approved venues.”

Great Watch!

“The Ethereum network will be undergoing a scheduled upgrade at block number 9,069,000, which is predicted to occur on Saturday, December 7, 2019.

Please upgrade your node before Sunday, December 1, 2019 to account for the variable block times.”

See Also: Istanbul to Berlin: Ethereum Milestones on the Road to Serenity

“At the center of contention is ethereum’s consensus mechanism, proof-of-work (PoW), which only offers a statistical guarantee of transaction finality. Dossa said a different mechanism is needed for the institutions Polymath aims to serve. [Finality will be included in the launch of Eth2.]

How ethereum settles transactions through mining also came into consideration for Polymath. Since miners, who process and sign-off on transactions for a fee, can operate anywhere in the world, institutions could face government scrutiny if fees are traced back to a sanctioned country.

The mining process is permissionless. If you’re paying transactions on ethereum, you don’t really know where that transaction is going to end up. For a large institution that could be an issue.”

“The Gendarmerie’s cybercrime division (C3N) used the system to buy cryptocurrency from Europol-allocated funds and cover its operational costs with those assets.

Tezos claims that the system employs ‘the first smart contract ever developed by a public authority.’ Governments are showing an increasing interest in blockchain technology.

“In order, the top 10 crypto exchanges in CryptoCompare’s second Exchange Benchmark are: Gemini, Paxos’ itBit, Coinbase, Kraken, Bitstamp, Liquid, OKEx, Poloniex, bitFlyer and Bitfinex.

Our new Benchmark includes a category for recent hacks for which we penalize exchanges. As Binance was recently hacked, it is marked down in the security category.

“ShapeShift released the token, akin to Binance’s BNB, on Wednesday, enabling commission-free trading with zero fees between cryptocurrencies. FOX furthers ShapeShift’s permissionless ideology by attracting users to a self-custodial exchange.

While total trade volume decreased on the platform since the implementation of KYC, liquidity has increased over the same period by 10x on the exchange’s main pair, BTC/ETH.”

November 19

“It does not matter if the stablecoin is backed by a currency, a commodity, or even an algorithm – the rules are the same.

Blanco insisted stablecoin administrators must register as a Money Services Business (MSB) with FinCEN.

Including stablecoins as money transmitters, and their administrators as MSBs, means firms dealing with them must follow federal know-your-customer (KYC) and AML laws under the Bank Secrecy Act.”

LocalCryptos, formerly LocalEthereum, said it had completed the pivotal step of adding support for Bitcoin.

The move comes roughly a week after LocalBitcoins announced its registration with regulators in its home country of Finland. By contrast, LocalCryptos stays away from such requirements, operating as a non-custodial resource under which no financial liability is taken on.

The platform is a one-stop shop for fiat-to-crypto ramps worldwide.”

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“The luxury automaker will use an enterprise blockchain platform from Salesforce to track the authenticity of the cars sold on the secondary market.

Each vehicle will come with an immutable record of service, including restoration, prior ownership and more, and each car will be armed against potential counterfeiting.”

“Potentially making it the first cryptocurrency investment vehicle to become a reporting company. The shares are already publicly traded on an over-the-counter market, but reporting company status would improve transparency and liquidity for shareholders.

We’re seeing an ever-growing demand for exposure to bitcoin through a security or an access product like we offer.”

See Also: Bakkt, Fidelity Will Store Galaxy Digital’s New Bitcoin Fund Holdings
See Also: Fidelity Digital Assets Gets NY Trust Charter to Custody Bitcoin for Institutions

“Lehnberg’s critique of Bogatyy’s research rests on what he judges to be key “inconsistencies.” These include the implication that it would be possible for law enforcement to link intercepted data to a user address.

The Grin team has consistently acknowledged that Grin’s privacy is far from perfect. While transaction linkability is a limitation that we’re looking to mitigate as part of our goal of ever-improving privacy, it does not ‘break’ Mimblewimble nor is it anywhere close to being so fundamental as to render it or Grin’s privacy features useless.

“German Bitcoin (BTC) mining firm Northern Bitcoin has entered a merger agreement with United States-based competitor Whinstone to jointly build what will supposedly be world’s largest mining farm.

Whinstone is already building the aforementioned facility which is expected to have a capacity of one gigawatt on an area of over 100 acres in Texas. The mining farm in question will allegedly be the largest data center in North America.

The idea of placing the world’s largest mining facility in the U.S. is interesting, given that China has so far been at the forefront of the cryptocurrency mining industry.”

“German securities marketplace Deutsche Boerse and Swiss state-run telecom Swisscom have settled securities transactions using different blockchain protocols.

In order to process cash and security tokens, the participants were deploying two different distributed ledger technology (DLT) protocols — R3’s Corda and IBM’s Hyperledger Fabric — to complete cross-chain secure settlement.”

November 18

“Beginning immediately, anyone, anywhere can upgrade their Sai to Dai easily through MakerDAO’s Migration Portal and take advantage of all MCD has to offer.

Not long ago, MCD was envisioned as a system that would help shape the future of commerce on the blockchain. Today, that vision is a reality. MCD stands ready to make good on its promise to allow businesses and individuals all over the world to realize the advantages of digital money—without common restrictions and inherent volatility.”

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See Also: The Future of MKR with Multi-Collateral Dai

Mimblewimble’s privacy is fundamentally flawed, which he reportedly proved by discovering the exact addresses of senders and recipients for 96% transactions of Mimblewimble’s privacy-centric coin Grin (GRIN).

According to the researcher, the problem is inherent to Mimblewimble, and there is no way to fix it. Based on new findings, Mimblewimble should no longer be considered as a ‘viable alternative to Zcash or Monero when it comes to privacy.

According to the researcher, Zcash purportedly provides the maximum possible anonymity as its anonymity set includes all the shielded transactions. Ethereum co-founder Vitalik Buterin replied to emphasize:

Only global anonymity sets (eg. as done with ZK-SNARKs) are truly robustly secure.”

“Overturning the rejection would clear the way for potentially the first bitcoin ETF in the U.S., following years of anticipation of a mainstream-ready investment product.

It is not clear what triggered the SEC’s review. Bitwise did not request the review, ‘we do, however, welcome the opportunity to submit comments and continue the dialogue with the SEC.'”

“A panel of senior British judges and lawyers recognized crypto assets as “tradable property” under English and Welsh law. The statement also defines smart contracts as “enforceable agreements”.

The task force undertook the effort to ‘provide much needed market confidence and a degree of legal certainty as regards English common law.’ The statement is expected to provide a solid foundation for the mainstream adoption of crypto assets and smart contracts in the U.K.”

“The FATF’s so-called “travel rule” requires virtual asset service providers (VASPs) like cryptocurrency exchanges to collect and share personal data during transactions. The creators of the proposed protocol say that it enables VASPs to transmit this information in a highly private and secure fashion – called OpenVASP.

OpenVASP is a roadmap to FATF compliance that enables VASPs to protect private and business-sensitive data.”

Almost 200 developers are currently reviewing “Bitcoin Improvement Proposals” (BIPs) around Taproot and Schnorr.

This is a way to make sure more people understand the proposal as early as possible.”

“Brave 1.0 is reported to offer 3-6x faster browsing compared to other browsers and includes a variety of features designed to make browsing the internet a safer and more secure experience. To accomplish this, Brave automatically blocks third-party advertisements, trackers and autoplay videos, as well as phishing and malware attempts.”

“Hyperledger, the open-source blockchain alliance backed by the Linux Foundation, has green-lit a Beijing-based firm that also serves the Chinese army to join its new certification program. Only five companies are authorized Hyperledger Certified Service Providers (HCSP).

Peersafe has already assisted Chinese police to secure footage and data transmission in its surveillance systems via trusted nodes, while providing encrypted communication services for the government. 

According to a report published this month, the Chinese armed forces would use blockchain technologies to secure classified information and communications, evaluate military training performances and monitor logistics.”

“Visa, the world’s largest card payment network, has been quietly developing a blockchain system that could upend how banks transfer customer transaction data to consumer financial applications.

It illustrates Visa’s desire–like most large financial firms–to be able to not have customer data touching multiple different companies and to allow consumers to get closer to controlling their data.

The system was tested on Tendermint and Hyperledger Fabric, both available in the public domain. But it can also be used on a forkless public blockchain using a proof-of-stake consensus system, like those on Algorand or Ethereum 2.0.”

“In order to receive the registration, LocalBitcoins had to prove to the FIN-FSA that it had implemented suitable Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures, along with having adequate safeguarding for customer assets.

Its position as an outlet in which citizens can circumvent capital controls on money would seem to now be increasingly in question. Evidence of this can be seen in the trend of users dropping the service for alternative, and perhaps less-regulated providers.”

“While RBC does not comment on ongoing proprietary research and development, we can confirm that these patent filings are not in support of work towards a cryptocurrency exchange for clients. RBC has no near-term plans to launch a cryptocurrency exchange for clients.”

“Opera’s OPay reportedly intends to use the new Series B $120 million round to scale and extend its digital payments solution beyond Nigeria to Kenya, Ghana and South Africa. 

Opera is both highly active in the cryptocurrency sphere and in the African consumer market. Since its Series A $50 million round, OPay’s business in Nigeria has grown to 140,000 active agents and hit $10 million in daily transaction volume.”

November 15

“Tarbert said Tuesday the CFTC is still evaluating whether ether will remain a commodity under the new [PoS] model. The CFTC and its sister agency, the SEC, were both “thinking carefully” about the forthcoming Ethereum 2.0 upgrade.

Ethereum developers and proponents believe proof-of-stake may actually bolster the case that ether is “sufficiently decentralized” to be considered a commodity in the eyes of U.S. regulators.

What’s interesting about proof-of-stake is that it takes away miner centralization.”

“The central bank’s prognosis rests on a stablecoin worst case outcome: a run on the issuers, in which coin holders panic en-masse and demand the return of the fiat they staked. 

[Notably], the report lists the steps required to prevent a stablecoin catastrophe:

  • Issuers must disclose how their staking mechanism works
  • Issuers must protect customer data privacy while maintaining KYC records to prevent illicit use
  • Issuers must inform customers if they have any rights to the underlying asset”

With an SPDI, crypto exchanges and other startups could operate in New York without going through the state’s licensing rigmarole, under the same legal principles that exempt banks from needing state money transmitter licenses, Wyoming advocates said.

We are fairly confident that the Wyoming SPDI will be able to operate in New York without a BitLicense.

In addition to addressing the BitLicense problem, an SPDI could ease a longstanding pain point for crypto businesses: the difficulty of obtaining banking services.”

“Financial regulators in China appear set to crack down on cryptocurrency trading again after President Xi Jinping’s praise for blockchain technology revived speculation in the sector.

Regulators in each district of Shanghai must search and inspect local crypto exchange-related services before Nov. 22 and report to the central bank for further actions. The move underscores China’s complicated relationship with emerging decentralized technologies.”

See Also: Central Bank of China Starts Trials to Restrict Large Cash Transactions

“Leshner said this recent round will help the San Francisco-based company further “decentralize” the protocol by setting it up so that crypto exchanges and custodians, like Coinbase, can maintain the protocol going forward.

We’re planning to integrate Compound into as many custodians, exchanges, wallets, and brokers as we can, to allow exchanges and custodians to be the interface of the protocol.”

“On Thursday, crypto startup Amun AG launched the Amun Tezos exchange-traded product (ETP), tracking the tezos cryptocurrency under the XTYZ ticker on the SIX Swiss Stock Exchange.

As a PoS chain product, Amun’s newest ETP will also issue staking rewards – termed “baking” in the Tezos system – by Coinbase, which will be automatically reinvested into the holder’s ETP shares.”

“A rogue chain has developed during a planned bitcoin cash hard fork, as an unknown mining pool failed to update to the new chain’s software.

Under the Nakamoto consensus mechanism the chain with the longest history would be considered to be the trusted ledger, invalidating the rogue chain.”

November 14

“The member nations — namely, Brazil, Russia, India, China and South Africa — are reportedly planning to develop a single payment transaction system between the member countries, which could be carried out in a still-to-be-developed “BRICS” cryptocurrency.

An efficiently operating BRICS payment system is capable of stimulating settlements in national currencies and ensuring the stability of settlements and investments between our countries, which form more than 20% of the global influx of foreign direct investment.”

“The network manages, integrates and synchronizes all the supply chain and logistics data in real time, aggregating the data between Walmart Canada and its fleet of third-party trucks on a shared ledger.

Blockchain is enabling a material advance in our smart transportation network, with expedited payments, extensive cost savings and other benefits among our supply chain.

“Bitcoin (BTC) is being championed as the solution to a new payment crisis affecting the adult entertainment website Pornhub.

We are all devastated by PayPal’s decision to stop payouts to over a hundred thousand performers who rely on them for their livelihoods.”

“An individual retirement account (IRA) is an investment account that enables an individual to save money for retirement in a tax-deferred way, while a 401(K) represents a qualified retirement savings plan offered by an employer.

The firms said that the new offering will give investors access to more than 30 digital currencies in the industry.”

See Also: Coinbase Expands Reach of Visa Card in Europe, Adds 5 New Cryptos

“The move is another sign that the insurance industry is gradually becoming comfortable writing coverage for digital assets.

Ledger’s policy covers third-party theft of private keys in the event of a physical breach of a hardware security module (HSM) in one of its data centers.”

“The bank is providing asset servicing for large, high-grade bonds that will be tokenized and divided for retail investors on Hyperledger Sawtooth. These bonds are normally too large for individual investors, but the quality of the bonds is attractive.

With $124.3 billion in assets, Northern Trust is the 24th largest bank in the U.S.”

“Jerome Powell noted that currently, U.S. national debt is growing faster than nominal GDP.

Ultimately in the long run that’s not a sustainable place to be. How to fix that — it’s easy to say that — how do you do that and when do you do that is an issue that is up to you and not to us.”

“After being arrested at Los Angeles International Airport in March 2019, Ignatov pleaded guilty to several charges, including money laundering and fraud.

Additionally, Ignatov has reportedly provided more details against his sister and OneCoin co-founder Ruja Ignatova, also known as ‘cryptoqueen.'”

“Vocal crypto advocate John McAfee has launched a polemical meme cryptocurrency dubbed “WHACKD.” 

The image used to advertise WHACKD — a portrait of Hillary Clinton with eyes fixed cravenly on a pair of dangling feet, as she clutches a slice of pizza — point to McAfee’s conspiratorial take on the death of billionaire Jeffrey Epstein this August.”