Zář 12

UK Issues a Warning on ICOs But Some Are Already Immune

· September 12, 2017 · 8:00 am

Less than a year after the industry began, running a Blockchain business using a digital token has suddenly become a lot more complicated.


ICOs Float Between A Rock And A Hard Place

The free-for-all of the first six months of 2017 when Blockchain startups and ‘projects’ created and sold tokens at will, often for hundreds of millions of dollars, has changed thanks to snap regulatory decisions.

The context of regulator reactions continues to dictate digital token or ICO market performance.

SEC Issues Warning for ICO Organizers and Investors

In more liberal settings such as the US, the Securities and Exchange Commission (SEC) has sought to create a wary environment among Blockchain businesses looking to issue a token. According to its exact functions and technical make-up, a token may or may not conform to the legacy description of a ‘security,’ and issuers must act accordingly to stay above the law.

The UK has become the latest major economy to publish official guidance on the phenomenon. Literature released Tuesday, September 12 by the country’s Financial Conduct Authority closely tracks the SEC.

“Whether an ICO falls within the FCA’s regulatory boundaries or not can only be decided case by case,” it states.

Most recently, however, a considerably harder route to ICO market control has come from China. Together with the US, it constitutes the largest participant in the industry, accounting for $398 million of its total $1.7 billion value.

As of September 2017, digital token sales are banned in China, a decision even affecting completed sales retroactively, compelling some businesses to refund sale proceeds.

First Movers Dictate The Golden Rules

The situation poses obvious problems for China-based projects, who are now considering how to continue operating in a market where even fiat-to-crypto exchange could soon become illegal for the second time.

Not a lot of countries have any type of regulation in place,” Blackmoon Crypto CEO Oleg Seydak told Bitcoinist about the current status quo.

Token issues will pay major attention to jurisdictions which have a position on the matter like USA, Singapore, China and comply with that regulation or avoid interactions with their citizens. Blackmoon Crypto is a Blockchain-based platform for tokenized investments, also preparing to launch an ICO. Like international platforms such as LakeBanker, the project faces a regulatory headache launching in such an uncertain global environment.

Tezos and Other Exciting New ICOs

When asked what industry participants should do to bulletproof themselves against unpleasant regulatory challenges, Seydak’s immediate reaction is to create as strong an offering as possible.

“The best solution is to be cross-blockchain startup. But it’s hard from a technical point of view,” he said. “At the same time, it becomes more and more easy with each day.”

Shutting The Door For How Long?

Imbued against regulatory shuffling by technical design are ICO projects which have been years in the making, such as Vinny Lingham’s Civic.

A steadfast delivery and plan for token use has come on the back of a highly controlled yet innovative token sale that ensured few doubts remained about developer integrity.

But so far, the interim method of choice for ICO-implicated businesses has simply been to deny participation to US and Chinese citizens.

The consequences of being lax about adherence are plain to see. This week, China’s regulators ordered even completed ICO campaigns to refund investors, while the scenario of a re-worked regulated ICO industry appearing in the country remain pure speculation.

ICO

Ahead of its planned ICO campaign, LakeBanker is therefore reviewing its options for both the short and long term. One thing is for certain: few cues will come from Civic, the platform having labelled Lingham’s sale “North Korean” in an article in August.

“At the beginning we will focus our resources on countries other than the US and China,” Lakebanker CSO Andrew McCarthy explained to Bitcoinist.

Our choices of the locations are based on two criteria: where our services are needed most and where legal overheads are not beyond reasonable. There are many countries that meet these two criteria better than the US or China.

The company has already converted to a de facto non-Chinese operation, having previously had only little involvement with the market. Chinese investors will also face initial exclusion.

In future, however, things could readily change, and such eventualities are already implanted into the platform’s roadmap.

“For the US and China some preparation work of the markets can be done in parallel, which include compliance/licensing, recruitment, and technology,” McCarthy added.

We will definitely shift our focus to the two biggest economies in the world in a year or two, when we have more streamlined processes, experienced operational teams, and good track records from other markets.

LakeBanker’s ICO is due to commence September 15 as a fixed-price sale, followed by a phase 2 Dutch auction in October.

Do you agree with the tactics of the ICO’s mentioned? Does the industry need more regulations? Let us know below!


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Srp 01

ICO Haven Sent Packing; Singapore follows SEC Lead to Regulate Securities-type Token Sales

· August 1, 2017 · 5:15 pm

Exactly one week ago, the SEC issued a report concluding that certain token sales could be considered securities, and hence were subject to regulation. Today, the Monetary Authority of Singapore (MAS) issued a similar statement, clarifying that, in some cases, Initial Coin Offerings (ICOs) were essentially equivalent to securities, and should fall under the same regulatory procedures.


I can’t help but feel slightly responsible. After all, just five days before the SEC report was published, I wrote an article describing many of the recent ICOs as tantamount to “buying shares in a stranger’s start-up.”

Oops!

SEC Issues Warning for ICO Organizers and Investors

Say What Now?

Sure, the SEC report was a direct response to the hack on the Ethereum side project, the DAO hub, almost a year ago… So I guess that can’t be my fault, but the timing is more than a little suspicious, wouldn’t you say?

Okay, the SEC focussed more on the risks to investors, and (quite rightly IMHO) ascertained this. If the token issued is promising to give investors a return (i.e. dividend), then it should fall under the realm of the SEC, and be subject to regulation. These rules are there to protect investors, so really it would be churlish of us to complain.

They also decided that they wouldn’t press charges at this point, but that future ICOs should be wary of where the often hazy line is drawn. Many token sales already prohibit U.S. citizens from participating for just this reason, so it’s not something we weren’t already aware of.

But Singapore? They Were Like… Totally Chill Man!

Well, yes and no. Singapore’s recent experiments with the tokenization of its currency were seen as an implicit embracing of all things crypto, with local authorities stating that they don’t consider digital tokens as securities. However, this is also the place where you can be fined $100,000 dollars and spend two years in jail for chewing gum.

The report is very clear and states:

The function of digital tokens has evolved beyond just being a virtual currency. […] Where digital tokens fall within the definition of securities in the SFA, issuers of such tokens would be required to lodge and register a prospectus with MAS prior to the offer of such tokens

So the Party’s Over?

No. Not by a long shot. Both the SEC and MAS reports specifically stop short of claiming that all cryptocurrency tokens and ICOs will fall within their remit. The MAS explicitly states that their “position of not regulating virtual currencies is similar to that of most jurisdictions.”

As would be expected, no specific definition is provided as far as what will or will not count as a security. But implicit in these reports is the assertion that this isn’t going to affect your Bitcoin, or your Ether, or your Just-doing-this-for-a-joke-Coin, whatever.

If a coin functions as a coin, then it should be fine. If a coin functions as a token for the purchase of service or product within an eventual eco-system, then that should also be fine.

If a coin is promising dividends based on a company’s profitability, then… yeah. If it sounds like a share in a stranger’s start-up…

But… but… but…

Let me repeat once again that these regulations are here to protect us, the investors.

Yes, our eyes may spin like a cartoon character’s until the pupils resemble dollar signs at the mere thought of that near-mythical level of profit that a friend of a friend down the pub told us about but we would all be sick to our stomachs to find out that the ICO we just plowed our hard-won life-savings into was just an elaborate Ponzi scheme after all.

To ignore the risk of one for the sake of the other would make us not investors. It would simply make us gamblers.

What do you think of the SEC and MAS’ recent reports? Will it have an impact on which ICOs you choose to invest in? Have you found yourself frozen out of an ICO because of where you live? Let us know in the comments below.


Images courtesy of Wikimedia Commons, Fotolia

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Dub 26

Take Two: SEC to Review Its Bitcoin ETF Decision

· April 26, 2017 · 9:00 am

The U.S. Securities and Exchange Commission has announced that it will review its decision regarding the Winklevoss twins’ Bitcoin ETF.


SEC to Review Its Bitcoin ETF Decision

The U.S. Securities and Exchange Commission (SEC) will review its decision regarding the rejection of the Bitcoin exchange-traded fund (ETF) proposed by Cameron and Tyler Winklevoss.

statement issued by the SEC in response to a petition for review of the Disapproval Order by the Bats BZX Exchange reads:

[…] it is hereby: ORDERED that the petition of BZX for review of the Division’s action to disapprove the proposed rule change by delegated authority be GRANTED; and It is further ORDERED that any party or other person may file a statement in support of or in opposition to the action made pursuant to delegated authority on or before May 15, 2017.

The SEC first rejected the Bitcoin ETF (COIN) proposed by the Winklevoss twins last month, citing risk of fraud and a lack of regulation in the Bitcoin markets. The statement in which the SEC rejected the COIN EFT reads:

As discussed further below, the Commission is disapproving this proposed rule change because it does not find the proposal to be consistent with Section 6(b)(5) of the Exchange Act, which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices and to protect investors and the public interest.

The petition filed by the Bats BZX Exchange will see the SEC’s action to disapprove the Bitcoin ETF reviewed and possibly amended. If so, COIN ETF shares would be traded on a public stock exchange, providing an easy way for investors to capitalize on the price of BTC without the need to deal with Bitcoin exchanges, wallets, private keys, and so forth.

Winklevoss Chose Bats Exchange For a Reason

As noted by Blockchain researcher and host of the Crypto Scam podcast, Tone Vays, ‎in a 2016 interview, it is very likely that the Winklevoss twins chose to work with the Bats BZX Exchange on the COIN ETF for this very reason. 

Vays

“My guess is the reason that they changed is that Bats is the new kid on the block, so they push the issues a bit,” Vays explained. 

Not only does it make sense for the Winklevoss twins to identify with the Bats BZX Exchange due to the “experimental” nature of the COIN ETF, but it is also a great strategic move that ensured the exchange they partnered with would help them fight to see the Bitcoin ETF approved.

Vays continued:

Nasdaq might not have been helping the Winklevoss fight against the SEC to get this approved and maybe Batz said ‘you know what, we’ll throw your lawyers at it’.

The Saga So Far

The Winklevoss’ bid to see a Bitcoin exchange-traded fund on public stock exchanges is a saga that has been going on for roughly three years. It started with the filling of an S-1 form for the Winklevoss Bitcoin Trust in May 2014.

Twins

The Winklevoss Bitcoin Trust was based on the twins’ substantial Bitcoin holdings (roughly 1% of the total supply at the time) and had Math-Based Asset Services LLC as the sponsor of the Trust. Later that year, a follow-up filling was made in order list the Winklevoss Bitcoin Trust as an ETF on the NASDAQ OMX exchange with the name “COIN.”

Two years later, in June 2016, the twins filed a document that would see the ETF listed on the Bats exchanged instead of Nasdaq. The same filing also saw the ETF offering increase from $20 to $65 million.

Last month, the Securities and Exchange Commission (SEC) denied the Winklevoss Twins’ Bitcoin ETF, which lead to the petition by the Batz BZX Exchange.

Do you think that the Winklevoss Bitcoin ETF will be approved after the SEC’s revision? If so, let us know why in the comments below.


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Bře 11

Bitcoin ETF Rejected; Price Dips Below $1,000

· March 11, 2017 · 12:20 am

The Bitcoin ETF proposal (COIN) has been rejected by the United States Securities and Exchange Commission, which immediately sent the price plunging down to a $958.5 low.


Bitcoin ETF Rejected

The much anticipated Bitcoin ETF filed by the Winklevoss Brothers in mid-2013 has been officially rejected. The document outlining the decision states the reasons for the rejection:

Based on the record before it, the Commission believes that the significant markets for bitcoin are unregulated. Therefore, as the Exchange has not entered into, and would currently be unable to enter into, the type of surveillance-sharing agreement that has been in place with respect to all previously approved commodity-trust ETPs—agreements that help address concerns about the potential for fraudulent or manipulative acts and practices in this market—the Commission does not find the proposed rule change to be consistent with the Exchange Act.

This decision caused widespread community outrage since many believed that there was a fair chance that the ETF would be approved.

Twins

Many users, including Andreas Antonopoulos, a prominent member of the Bitcoin community, took to social media to voice their disagreement:

Immediate Price Crash

Almost right after the decision was published, the price of Bitcoin saw a crash down to around $958 USD, translating to a decrease of almost 25% in a matter of minutes.

Bitcoin Price After ETF Decision

The price slowly recovered and had been fluctuating around $1,100 USD at the time of writing. Prior to the announcement, the price hit a volatile peak of $1,350 USD amid speculation that the ETF would be likely approved.

These large swings in price also caused increased trading volumes on Western exchanges, with Bitfinex and Bitstamp seeing a combined volume of almost 80,000 BTC.

Will Bitcoin price recover after this crash? Share your thoughts below!


Images courtesy of Shutterstock, Twitter 

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Úno 21

New SEC Agreement Pushes Bitcoin Price Higher to $1,100

· February 21, 2017 · 5:00 am

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BTC price rose higher after positive news regarding the SEC and its new regulations that are expected to boost small Bitcoin businesses.


Building on ‘Productive Relationship’

A memorandum of understanding (MOU) between the US Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA), signed Friday, will see the two bodies share information related to ensure new crowdfunding regulations are effective for small businesses.

mou-sign-2

The new rules will make it easier for entry-level businesses to raise funds via exceptions to restrictions governing intrastate crowdfunding.

“The agreement not only builds on an already productive relationship between the SEC and state regulators, it also offers additional insights and protections as we help companies grow and create jobs while providing new opportunities to investors,” SEC Acting Chairman Michael S. Piwowar commented in an accompanying press release.

Bitcoin Reacts with Relief

The move is generally seen as a beneficial step for cryptocurrency and Blockchain startups, with hurdles being removed for the US ecosystem to become more innovative and competitive.

Enthusiasm was reflected in continued Bitcoin support, the digital currency’s price crossing the $1,100 barrier once again.

chart

“This agreement will strengthen collaboration among state and federal securities regulators to help expand small-business investment opportunities while also protecting investors,” continued Mike Rothman, Minnesota Commissioner of Commerce and President of NASAA.

Ongoing dialogue is essential to carry out our responsibilities going forward. With this MOU in place, we have an opportunity to share information that will bolster our efforts to support small business capital formation and prevent fraud.

All Eyes on March

The press release meanwhile outlines the new options available for the fintech startups themselves.

“Companies now can also raise up to $5 million per year through other amended rules, which could facilitate the development of regional offering exemptions at the state level to permit companies to raise from investors in a specific region,” it confirms, the limit having previously been $1 million.

Bitcoinist_Bitcoin Devleopment Funding

In addition, companies:

will have more flexibility to engage in intrastate offers through websites and social media without having to register their offering with the federal government.

The move comes at a crucial time for the SEC in particular as it prepares to deliver its final verdict on allowing the Winklevoss Bitcoin ETF. The hotly-awaited decision is expected March 11th, with many predicting highly favorable consequences for Bitcoin’s propagation and value in the event of a positive outcome.

What do you think about the SEC move? Let us know in the comments below!


Images courtesy of Shutterstock, coinmarketcap.com

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Říj 25

Overstock Announces Publicly-Traded Shares on t0 Blockchain

Source: bitcoin

Patrick Byrne Overstock

On Tuesday morning at the Money 20/20 Conference in Las Vegas, Patrick Byrne, CEO of Overstock and t0, announced the historic arrival of trading publicly offered Overstock shares on the t0 blockchain.

Also read: Money 20/20 Recap: Ethereum, Consumer Protection, Investment

Overstock Moving Forward With t0

Starting on December 15th, individuals who purchased Overstock shares by the November 7th record date will qualify to purchase shares of its preferred stock, including preferred shares to be issued and traded exclusively on the t0 platform.

As such, Overstock will become the first company to legally trade a publicly listed security on a blockchain solution.

Overstock intends to offer up to one million shares of its preferred stock, and will give stockholders the opportunity to subscribe for shares of its Blockchain Series A Preferred, which will trade exclusively on t0. Through this, the t0 platform will be demonstrated as a functioning, live proof-of-concept for potential further expansion of equities trading on the platform.

Spurring American Blockchain Innovation

Regulators understand that innovation is coming, and don’t want America to be left behind.

Acknowledging this, Byrne remarked, “We wanted to do something that met the standards of American regulators.”

Through forming partnerships in with key industry players and remaining transparent with regulators, Overstock was able to overcome the technical and policy challenges to arrive as the pilot child for this initiative.

Detailing the history of hosting crypto-bonds on a blockchain, Byrne explained that such an offering is the culmination of years of collaboration and diligent work.

Two years ago, Overstock created Medici Ventures to explore possibilities around blockchain. By April 2015, Overstock had developed an order matching-engine linked to a blockchain. In June of last year, they issued a $500,000 crypto-bond on the t0 platform, followed by a $5 million bond being the first privately purchased blockchain security in August 2015.

Upon receiving an S3 Declarative from the SEC in April of 2016, Overstock and t0 were able to proceed with the announcement.

Being the first large player to market in the crypto-equities space will enable for other organizations to learn from the process through which a company must take to publicly trade shares on a blockchain solution, as well as the advantages and challenges to using the t0 platform.

“My allegiance is not to Bitcoin per say, it’s to the blockchain,” Byrne said. “I’m one of the few who was here for the early stages of the internet and the early stages of the blockchain. . .and I think that the blockchain will be more disruptive than the internet.”

What do you think of Overstock’s announcement to issue publicly traded securities on the t0 blockchain? Will other organizations follow suit? Share your thoughts in the comments below!


Images courtesy of Ryan Strauss.

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Říj 24

Airbitz to Leverage US JOBS Act to Raise Funding for Expansion

Source: bitcoin

Airbitz to Leverage US JOBS Act to Raise Funding for Expansion

SAN DIEGO — Airbitz, a popular bitcoin wallet provider, has announced the launch of a new crowdfunding campaign through Wefunder. Through Wefunder’s BitPay integration, Airbitz will become the first company to raise bitcoin investments in full compliance with Title III of the JOBS Act.

Also read:  Technical Analysis: Explaining the Weekend Bitcoin Price Rally

Airbitz to Raise Funds in Compliance With SEC Rules

The JOBS Act — or the “Jumpstart Our Business Startups Act — was signed into law on April 5, 2012. The purpose of this law is to make it easier for startups to go public and raise capital privately. Title III of the Act applies specifically to crowdfunding, which Airbitz will now take advantage of in raising new funds for expansion.

“We hope to obtain new capital to grow our company,” Airbitz CEO Paul Puey told Bitcoinist. “And by doing it through crowdfunding, we enable our existing user base to take part and feel a sense of ownership in a product they already use.”

Puey also told Bitcoinist that his company has a funding goal for its Wefunder campaign. Due to SEC rules, however, Puey cannot publicly disclose exactly how much Airbitz aims to raise at this time.

“The [Wefunder] campaign will accelerate progress towards the creation of secure, user-friendly decentralized applications,” Puey said in a press release.  

Wefunder is an equity crowdfunding platform catered to startups looking to raise capital in order to develop their products and ideas. According to its website, the platform has seen over $16 million USD in investments since 2013. After raising their initial capital on Wefunder, those companies reportedly went on to raise over $600 million in venture capital. The Wefunder website claims that nearly 80,000 investors have used the platform, contributing to projects such as Freight Farms, CaseText, Geekatodo, Checkr, and Zenefits.

The San Diego-based company became popular for its developer SDK, which can be integrated into blockchain applications to provide a secure login environment. The security is provided through the use of the Airbitz mobile bitcoin wallet. Users sign into the blockchain application by scanning a barcode with the wallet, and then creating a user account with fully-encrypted login data.

According to the company, this method protects users from server-side hacks, as all stored private data is fully encrypted. Airbitz’s website claims this service constitutes “the world’s first zero-knowledge single sign-on solution.   

If the Airbitz hits its Wefunder goal, combined with its lead investment of $150,000 from Lakeshore Energy Capital, Puey said the company would be able to deliver on its promises for several SDK integrations currently in the works.

“We have many exciting business opportunities with our security platform,” Puey said, “and we simply need the resources to execute on them.”

The company also has an ongoing crowdfunding campaign with Bank To The Future. Puey told Bitcoinist that the funds raised from that campaign will also go towards its SDK integration projects.

Do you think Airbitz’s compliance with the JOBS Act will help it reach its crowdfunding goals? Let us know in the comments below.


Images courtesy of SiliconHills, Airbitz.

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Čvc 02

Are the Winklevoss Twins Bringing the Bitcoin Price Back Up?

Source: bitcoin

Winklevoss

The bitcoin price is back up! Following a scary and wavering period of political turmoil and financial devaluation, bitcoin has returned to $670 USD and beyond at press time.

Also read: Bitcoin Price Down, But Gaining Popularity in UK Following Brexit

Bitcoin is getting people excited again, and the reasons for the rise are likely due to several factors.

For one thing, the Brexit vote has come to an end. Britain is leaving the EU, and while anti-Brexit petitions are in the mix, no move has been made on those yet.

In that time, bitcoin encountered its heaviest drop in recent days, but trading among British investors and cryptocurrency hounds was at an all-time high, according to  Jesse Powell of San Francisco-based bitcoin exchange Kraken.

Trading was at its highest point within 24 hours of the Brexit vote, and many UK residents seemed eager to switch their savings to something they thought was a little more “trustworthy” (the British pound had fallen 10 percent against the U.S. dollar in that time).

Now that the vote is over, bitcoin looks to be rebounding, but another reason may have to do with those ever-popular Winklevoss twins, made famous in the Oscar-winning production, The Social Network.

Winklevoss Bros Bringing the Bitcoin Price Rally?

Cameron and Tyler are now making headlines with their new Winklevoss Bitcoin Trust, which has recently switched to BATS Global Markets.

Still headed for a listing on the Nasdaq, the Securities and Exchange Commission confirmed last Wednesday that the organization will now be a choice among popular ETFs, as the exchange executed nearly 25 percent of US ETF trading last May.

If the Winklevoss twins get their way, the exchange will be the first SEC-approved and regulated bitcoin platform, and will trade under the ticker symbol COIN. Naturally, the Twins’ primary exchange Gemini (based in New York), will serve as the trust’s custodian.

“We are excited to add the Winklevoss Bitcoin Trust,” explains Laura Morrison, present head of BATS.

A little publicity Winklevoss-style always seems to get bitcoin ahead in the record books, and this scenario is no exception. Whether bitcoin will rise beyond $700 remains to be seen, but the digital currency does appear to be attempting its long trek up the financial mountain yet again, and we can only wait and see where things lead in the coming months.

How fast will the bitcoin price rise again? Post your thoughts and comments below!


Images courtesy of Brian Snyder via Forbes, CNBC.

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Are the Winklevoss Twins Bringing the Bitcoin Price Back Up?

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