Pro 31

Bakkt Raises $182.5M From Microsoft And Other Big-Name Investors

Bakkt on Monday announced the completion of its first funding round, to the tune of $182.5 million. The platform which aims to offer the first-ever Bitcoin-settled futures contracts in the coming year says it is going ahead with its plans irrespective of the current market conditions.


$182.5 Million in Funding From High Profile Investors

In a Medium post published on Monday (Dec. 31, 2018) by the Bakkt CEO, Kelly Loeffler, the company announced that it had successfully carried out its first funding round. According to the announcement, 12 investors participated in the capital raising exercise.

The CEO notes the investors including some big names, namely:

The partners and investors in the first round include Boston Consulting Group, CMT Digital, Eagle Seven, Galaxy Digital, Goldfinch Partners, Alan Howard, Horizons Ventures, Intercontinental Exchange, Microsoft’s venture capital arm, M12, Pantera Capital, PayU, the fintech arm of Naspers, and Protocol Ventures.

Bakkt Moving Ahead Despite Bear Market

For Loeffler, the status quo remains unchanged despite the prolonged bear market that characterized the cryptocurrency space in 2018. The company intends to continue its drive for proper onboarding of clients, as well as, collaborating with relevant business partners.

New York Stock Exchange Owner to Launch Bitcoin Data Service

Reinstating Bakkt’s commitment and resolve to the process, Loeffler, said:

We have worked to build new markets and products many times before. Those of us building Bakkt have earned our stripes by helping advance markets in once-nascent asset classes, from energy to credit derivatives and, now, bitcoin. The path to developing new markets is rarely linear: progress tends to modulate between innovation, dismissal, reinvention, and, finally, acceptance.

According to Loeffler, focusing on the BTC price 00 action is a distraction from the groundbreaking developments happening with Bitcoin as a whole. The Bakkt CEO also noted that paradigm-shifting technological breakthroughs have a long incubation time and price isn’t always the best metric for gauging growth.

Notably, 2018 was the most active year for crypto in its brief ten-year history. This was evidenced by rising investment in distributed ledger technology and digital assets, as well as by blockchain network metrics such as daily bitcoin transaction value and active addresses. Yet, these milestones tend to be overshadowed by the more narrow focus on bitcoin’s price…

Bakkt Postponed From January to ‘Early 2019’

Bakkt and the Commodity Futures Trading Commission (CFTC) continue to work out modalities for the launch of the BTC-settled futures contracts. However, the current government shutdown in the United States looks like it has pushed back the January 2019 launch to “early 2019.”

The official statement published on December 31, reads:

Following consultation with the Commodity Futures Trading Commission, ICE Futures U.S., Inc. expects to provide an updated launch timeline in early 2019, for the trading, clearing and warehousing of the Bakkt Bitcoin (USD) Daily Futures Contract. The launch had previously been set for January 24, 2019, but will be amended pursuant to the CFTC’s process and timeline.

While awaiting CFTC approval, the platform says it will continue to onboard customers while firming up its institutional-grade infrastructure.

Do you think the signs are good for Bakkt following this successful fundraising round? Please share your thoughts with us in the comments below.


Image courtesy of Twitter (@Bakkt), Shutterstock

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Pro 21

Bakkt Bitcoin-Settled Futures Set To Be Approved in Early 2019

Bakkt, a platform for the first-ever Bitcoin-settled futures contract, is expected to be approved by the United States Commodity Futures Trading Commission (CFTC), according to the Wall Street Journal.


CFTC Approval Imminent

According to the Wall Street Journal, Bakkt will soon receive a regulatory green light from the CFTC for its Bitcoin futures contract. The WSJ notes:

The first futures contract that will pay out in cryptocurrency rather than cash is expected to soon get regulatory approval.

Bakkt, owned by Intercontinental Exchange Inc., will be the first to offer a BTC-settled futures product.

The Chairman Of The CFTC Might Just Have Brought The Bitcoin Crash To An End

Both Bakkt and the CFTC have been working together to iron out crucial issues relating to the futures contract. CFTC is also reportedly examining Bakkt’s business plan to determine whether they comply with its regulations.

Another major point of concern has to do with cybersecurity infrastructure. Cryptocurrencies are a target of hackers and other cybercriminals. The CFTC is looking at Bakkt’s security framework and the modalities in place to recover from a possible cyberattack.

Previously, Bakkt had to postpone the launch of BTC futures contracts to 2019 to give more room for proper customer onboarding and warehousing for the product.

In a press released issued by ICE back in November, the company announced that Bakkt would begin trading BTC futures on January 24, 2019. According to available reports, the CFTC will likely vote on the matter in early 2019.

Focus on Price Discovery

For Bakkt, the mechanism of price discovery is a critical issue given that its contract will be BTC-settled and not cash-settled like the ones offered by the CME and the CBOE.

Back in 2017, the appeal of the futures contract provided by the latter two gave traders the ability to place leveraged bets on BTC price 00 movement without having to buy the cryptocurrency itself.

However, the dynamics of price discovery could improve with Bakkt contracts being settled in actual bitcoin to gauge real demand as opposed to placing USD cash bets on BTC price movement. In August 2018, Bakkt CEO, Kelly Loeffler, said:

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.

Apart from Bakkt, Nasdaq has also confirmed that it wants to launch its Bitcoin futures product in 2019 and possibly other altcoins like Ethereum thereafter.

Will Bakkt Bitcoin futures get approved and make Bitcoin price discovery more accurate? Share your thoughts below!


Image courtesy of Twitter (@Bakkt), Shutterstock

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Zář 29

‘Nothing At All’ Going on With Crypto Regulation, Says D.C. Insider

Despite the growing importance of the cryptocurrency industry, the US government’s position on crypto regulation remains frustratingly opaque. According to a D.C. insider, a movement towards real regulation or greater regulatory guidance is still quite far away.


Regulatory Uncertain

Questions about how the government intends to regulate the crypto industry abound. For example, it is still unclear to many investors whether crypto regulation will ultimately come from the SEC or the CFTC.

While there remains no widespread movement in Washington towards reforming the crypto regulatory environment, there are encouraging signs that pockets of Congress are beginning to take interest in the cause.

Beginnings of Congressional Action?

On September 24th, Rep. Warren Davidson (R-OH) hosted industry leaders from Wall Street, Silicon Valley, and the crypto industry for a roundtable discussion on the crypto regulatory environment. Davidson’s roundtable, titled “Legislating Certainty for Cryptocurrencies,” was held at the Library of Congress. Roughly eighty thought leaders from the private sector attended the roundtable, with multiple members of Congress and their aids in attendance as well.

Davidson stressed the importance of industry being involved in crafting the government rules that will eventually govern the crypto space.

Congress

Congressional Letter to the SEC

Following the roundtable, Davidson and fourteen other Representatives issued a public letter to SEC chairman Jay Clayton requesting that the SEC issue clarification on whether Initial Coin Offerings are considered security sales. The Representatives used the letter to express concern that all tokens were being treated as securities, regardless of whether the designation was applicable or relevant. The letter stated:

Therefore, we believe is important that all policy makers work toward developing clearer guidelines between those digital tokens that are securities, and those that are not, through better articulation of SEC policy, and, ultimately through formal guidance or legislation.

The letter went on to express concern that existing guidance on SEC policy is being conveyed solely through enforcement action, leading market participants forced to try to divine SEC policy through the scope of its enforcement actions. The letter continued:

Additionally, we are concerned about the use of enforcement actions alone to clarify policy and believe that formal guidance may be an appropriate approach to clearing up legal uncertainties which are causing the environment for the development of innovative technologies in the United States to be unnecessarily fraught.

Legislstion

New Legislation Begins to Emerge

While no major legislation has been introduced to cover the crypto industry, U.S. Representative Tom Emmer (R-MN) has introduced a slate of three bills designed to encourage support for the crypto industry. Emmer’s bills propose only minor changes to how cryptocurrency is regulated in the U.S.

Concerns about the regulatory status of various crypto projects have encouraged many entrepreneurs and firms to decamp to more stable regulatory climes. For example, Switzerland’s “light-touch” regulatory policy has fueled the dramatic growth of the industry in the country.

While it is encouraging to see the government finally begin to take interest in the crypto industry, the Congressional letter stressed that SEC guidance would take time to fully emerge and develop. Start-ups and entrepreneurs hoping for greater regulatory clarity will likely still have a long time to wait.

Will U.S. regulators eventually wake up? Let us know in the comments below!


Images courtesy of Shutterstock, Twitter/@.

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Čvc 23

Gary Gensler: From CFTC Chair to Blockchain and Cryptocurrency Educator

Gary Gensler was chairman of the U.S Commodity Futures Trading Commission (CFTC) between 2009 and 2014, right after the global financial crisis. Today, Gensler is part of MIT’s Digital Currency Initiative, lecturing students on blockchain technology and cryptocurrencies.


Gensler was instrumental in dealing with some of the cleanup from the global financial crisis of 2008. He implemented new regulation whilst at the U.S CFTC for the unregulated swaps market which played a central role in the crisis. His work at the U.S CFTC was successful and the new oversights were implemented in advance of other regulators taking actions to mop up after the crisis.

Teaching Blockchain and Cryptocurrency at MIT

After leaving the CFTC Gensler became finance chairman for Hillary Clinton’s 2016 presidential campaign and bid. Gensler has now joined the Massachusetts Institute of Technology (MIT) Sloan School of Management and lectures on blockchain technology and cryptocurrencies.

Bullish on Blockchain

In a recent interview with The Wall Street Journal, Gensler confirmed he is “bullish” when it comes to blockchain, describing it as mimicking the distributed nature of society. However, his past work at the CFTC has left him with a “sober” eye on fast-growing financial technology.

Despite not being directly involved in U.S politics right now he has agreed to help both Republicans and Democrats in matters of cryptocurrency regulation.

Regulators Need to Bring Clarity

Regulators Need to Bring Clarity

Speaking at the MIT Technology Review’s Business of Blockchain conference in April 2018, Gensler said that government officials needed to look to regulate the larger cryptocurrencies as well as new ICO tokens.

“The SEC and regulators need to bring clarity,” said Gensler, many cryptocurrencies “are operating outside of U.S. laws.”

Gensler was quoted in a subsequent debate over Ripple describing it as a “noncompliant security” due to its centralized distribution model.

The CFTC is Better Placed to Regulate the Sector

Last week, July 19, 2018, Gensler spoke at U.S Congressional hearings on cryptocurrencies and blockchain technologies giving five reasons why he believes blockchain technology can make a real difference in the financial sector.

Gensler said blockchain lowers costs and risks and can give stability and prevent illicit activities if regulated. But, the U.S Securities and Exchange Commission (SEC) and U.S CFTC have a role to play as the ICO market is ripe with scams and fraud and there are gaps in U.S law, especially when it comes to exchanges.

Gensler also believes the U.S CFTC is better placed to regulate cryptocurrency markets.

Do you agree with Gensler? Who is better placed to regulate cryptocurrencies in the U.S, the CFTC or the SEC? Let us know what you think in the comments below.


Images courtesy of Shutterstock, Flickr

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Říj 19

Poloniex Seeks Regulatory Clarity From CFTC Following Allegations

Source: bitcoin

CFTC

Popular Bitcoin and altcoin exchange Poloniex has submitted a request for no action relief to the Commodities and Futures Trading Commission (CFTC) around potential allegations that required timing of the “actual delivery” of cryptocurrency, regulated by a 28 day period in the Commodity Exchange Act (CEA), has been violated.

Also read: ‘GAME Changer’ Announced at Coinsbank Blockchain Summit in Turkey

The digital nature of cryptocurrency, however, does not mend well to the wording of existing laws, thereby hurting attempts to determine the full, or “actual” delivery of the commodity. Poloniex, in turn, has responded by saying that their business practices of providing cryptocurrency exchange and margin trading do not fall under this stipulation.

Poloniex Makes a Case for Constructive Bitcoin Regulation

Due to the unique, abstract nature of cryptocurrency, determining when an “actual delivery” occurred is grey in relation to the black and white delivery of traditional commodities such as wheat or oil.

The CEA, enacted initially in 1936, states, “physical… delivery [of] the entire quantity of the commodity purchased by the buyer, including any portion of the purchase made using leverage, margin, or financing.”

While the blockchain is time-stamped, delivery of cryptocurrency itself to customers is the main question in play here. Poloniex, however, argues that the cryptocurrency at hand is delivered to the recipient immediately after the completion of an order. Whether these transactions are traditional or for lending or margin trading, the recipient takes possession, ownership, and legal control of the cryptocurrency as soon as an order is completed.

While it seems that this would free such services from this particular regulatory obligation, such questions will have to be answered in court.

Speaking to the difficulty faced by many organizations navigating the murky regulatory waters in the space and the subsequent need for further clarification, Poloniex’s press release states:

“This privilege isn’t without its challenges, because we are operating in an emerging space against a backdrop of regulations honed and crafted for yesterday’s technology — the bygone era of analogue trading. As stakeholders, stewards, and charter members of a nascent technology, it is our collective responsibility to respectfully request for laws that make sense for this new technology.”

Do you think Poloniex is right? Let us know in the comments below.


Images courtesy of Hedge Think, Poloniex.

The post Poloniex Seeks Regulatory Clarity From CFTC Following Allegations appeared first on Bitcoinist.net.

Poloniex Seeks Regulatory Clarity From CFTC Following Allegations

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