Bře 15

Tether’s New Terms of Service Spark Fractional Reserve Concerns

Popular stablecoin Tether has updated its  Terms of Service (TOS) on February 26th, once again raising questions over its dollar peg. 


No One Does it Better Than Tether

Tether 00 has regularly come under suspicion over its claims that it’s 1-to-1 backed by the US Dollar and that it has been used to manipulate Bitcoin prices. In June 2018, Bitcoinist reported on a paper by two researchers at the University of Texas, who claimed to have identified potential evidence of direct price manipulation since November 2017.

tether

In December, however, the rumors about its dollar peg began looking increasingly thin. Bank statements revealed that $2.2 billion was present in Tether’s account at Puerto Rico’s Noble Bank on January 31st in 2018. Data from CoinMarketCap shows that the same amount of Tethers existed back then.

Just a few short months later, the company has once again managed to turn the cryptocurrency community against itself, with a controversial change in its TOS.

Social media users noticed that they had removed the previous claims that Tether was fully backed by US Dollars. Instead, that’s what the site currently says:

Every tether is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”). Every tether is also 1-to-1 pegged to the dollar, so 1 USD₮ is always valued by Tether at 1 USD.

So It Began

Users on different social media platforms, including Reddit and Twitter, quickly took aim at the controversial move.

Popular cryptocurrency commentator IamNomad outlined that there’s a reason for real concerns, saying:

“…without clarification “loans to third parties” and “collaterial” could mean a whole mess of things. Are they being put in some 30d cash bond (ie corporate loan) to get intrest or worse case lending it out on bitfinex margin pool.”

Since then, Tether has issued a formal statement on the matter, outlining that the change in the TOS was communicated directly to customers through a “required active opt in.” The company reassures its users that “Tethers remain completely stable and 100% backed, because Tether’s reserves always equal or exceed the number of issued Tethers.”

It’s Not That Simple, Though

Despite Tether’s announcement, the controversy maintains.

“Slippery language by Tether. “100% backed” <=> “may also include receivables from loans issued.” Imo this is a clear transition from full to fractional reserve banking,” noted Tuur Demeester, founding partner at Adamant Capital.

It’s easy to see why one would be concerned that his Tethers might not be backed by US dollars, but rather than “receivables from loans issued.”

What do you think of Tether’s updated TOS? Don’t hesitate to let us know in the comments below!


Images courtesy of Shutterstock

Share
Bře 07

Litecoin Is Currently Lighting Up The Charts

Litecoin (LTC) underwent something of a rally during the past month, gaining 20 percent in value over the last 48 hours alone. The two biggest cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH), have also seen significant (but smaller) gains in the past two days. 


Pump up the Volume

Litecoin started its latest ascent on Feb 8, with a price pump from $33 to $43 over 36 hours. At the same time, the 24-hour dollar volume almost tripled. Further mid-February gains saw the price briefly troubling the low-50s, before dropping back to $45.

However, since Tuesday, the price has been rocketing once more — gaining $10 to reach $57. Again, this accompanied a boost in 24-hour volume, which almost doubled in the same period.

Litecoin started the year at around $30 per coin.

Why Now?

According to Forbes, it may have something to do with initiatives in crisis-torn Venezuela. The government last month introduced sanctioned cryptocurrency remittances to the country in an attempt to profit from increasing bitcoin usage.

The scheme allows remittances in bitcoins and litecoins, with resources available in sovereign bolivars once the transaction is confirmed. Whilst the commission listed is not the 15 percent first touted, it is still on a par with cash remittances, at 5.7 percent.

Seems like a great way for Maduro’s government to raise some much-needed funds through crypto. After all, it will just print some banknotes to fulfill the transaction — assuming the paper doesn’t become too expensive.

Anything Else?

Forbes also points to recent partnerships to improve Litecoin’s security and privacy, notably through the potential implementation of Mimblewimble. This protocol, named after a Harry Potter spell, increases fungibility and privacy while remaining scalable.

There is also the impact of August’s upcoming reward-halving event to consider. eToro’s Mati Greenspan, explained:

Litecoin’s strong rally should not come as a surprise; it was high time the fast-paced growth of the community and user base was priced in. Investors may also have one eye on litecoin’s upcoming reward halving event, so it’s likely they’re already pricing in the supply reduction.

Whilst Litecoin (LTC) is still 85 percent down from its all-time high, consolidation of (and building on) recent gains could see it well placed for future movement.

What do you think of Litecoin’s recent price gains? Let us know what you think in the comments below.


Images courtesy of Shutterstock.

Share
Bře 05

Binance CEO: No Profit-Sharing With Users Due To BNB Security Status

Cryptocurrency exchange Binance will not share profits with holders of its in-house token due to regulatory hurdles.


‘You Don’t Want That’

That was the decision from CEO Changpeng Zhao (known as CZ), who shed light on the issue during an informal social media Q&A session on March 4 hosted by UK-based trading platform eToro.

Asked whether the exchange, which has seen phenomenal success in its short lifespan, would recycle its profits back to investors in its Binance Coin (BNB) token, Zhao said the drawbacks outweighed any advantages.

“No, that would make (BNB) a security, and you don’t want that,” he responded to an eToro user on Twitter.

As with Binance more generally, BNB has seen its value soar as the cryptocurrency is used, among other things, to offer discounts to traders on fees.

Currently the eighth-largest cryptocurrency by market cap, BNB has so far avoided the issue of securities regulation in countries such as the US — where the topic has become a major talking point in the face of shifting regulatory stances.

As Bitcoinist reported, an ongoing debate over whether the number-three cryptoasset, Ripple’s XRP, is a security has long enveloped industry commentators.

binance coin BNB

Exchanges Dodging Bullets

Zhao’s desire to avoid any exposure to potential securities rules thus speaks to a broader trend among cryptocurrency exchanges to circumvent jumping through unnecessary regulatory hurdles.

Platforms such as Bittrex— like Binance’s expansion to multiple overseas jurisdictions — have, at the same time, sought to segregate the US and non-US traders by offering different tokens on each with an eye to simplifying regulatory obligations and minimizing complications.

BNB, meanwhile, continues to attract attention beyond the question of security status. As Bitcoinist reported, Zhao himself described a report analyzing its value last month as “almost scary” in its thoroughness.

Authored by Kyle Samani of Multicoin Capital, the report concluded the token’s value is underrated. BNB/USD currently trades around $11.50, with the pair’s all-time high in January 2018 reaching just under $25.

What do you think about Binance’s position on profit-sharing? Let us know in the comments below! 


Images courtesy of Shutterstock.

Share
Úno 28

Japan Police: 98.3% of Money Laundering Cases Don’t Involve Cryptocurrency

Japan’s National Police Agency (NPA) say cases of suspected money laundering reportedly linked to cryptocurrency increased by 900 percent in 2018 when compared to the previous year. However, this still comprises only 1.7 percent of all money laundering investigations.


Cryptocurrency Money Laundering Up Tenfold in Japan

According to The Japan Times, the NPA reports that it recorded 7,096 cases of suspected cryptocurrency money laundering. This figure represents a tenfold increase from the 669 cases reported between April and December 2017.

Back in early December 2018, the NPA released a report stating that alleged cases of cryptocurrency money laundering for the year stood at almost 6,000. At the time, the period accounted for was between January 2018 and October 2018.

Since Q2 2017, regulators have required cryptocurrency exchanges in Japan to report instances of suspected illegal virtual currency transactions. This move was part of a whole host of reforms targeted at combating illicit activities carried out via digital currencies.

The NPA says many of the suspicious transactions involved multiple accounts with different bio-data information but using the same photo ID. Other cases involved accounts using foreign IPs even though details of the accounts show listing addresses based in Japan.

According to the NPA’s figures, the increase in crypto-related money laundering is indicative of a general rise in illegal financial transactions across the board in 2018. The NPA says it recorded more than 417,000 cases of alleged money laundering, an increase of over 17,000 from 2017.

Also, the percentage of crypto-related money laundering in the general reckoning has also increased. In 2018, 1.70 percent of money laundering was from cryptocurrency transactions compared to 0.16 percent in 2017.

Robust KYC/AML/CFT Rules to the Rescue

In August 2018, reports emerged that the NPA was set to commit more than $300,000 to develop a tracking software for cryptocurrency transaction. The NPA plans to implement this tool as a way of combating the rise of cryptocurrency theft and other illegal transactions.

FSA Japan

As reported by Bitcoinist in January 2019, the Financial Action Task Force (FATF) regulations on cryptocurrency will come into effect by Q3 2019. These regulations which center around KYC/AML protocols will apply to the G20, of which Japan is a member.

Experts believe such international standards will hinder the ability for criminals to launder money via cryptocurrencies. Meanwhile, the country’s Financial Services Agency (FSA) continues to implement stricter regulatory standards for cryptocurrency exchanges based in Japan.

Do you think the introduction and enforcement of KYC/AML regulations will curb money laundering? Let us know your thoughts below!


Images courtesy of Shutterstock

Share
Úno 26

Swiss Bank Julius Baer Launching Crypto Services to Meet ‘Increasing Demand’

The Swiss private bank industry is stepping up its efforts to become a formidable world player in the crypto industry. Now, Julius Baer, one of the largest and oldest Swiss private banks, and SEBA Crypto AG are joining forces to offer their clients a range of digital asset services, in a fully regulated environment.


Major Swiss Banks Embracing Cryptocurrencies

The Julius Baer group is partnering with SEBA to respond to its clients’ growing demands for crypto asset services. According to the announcement on February 26, 2019,

Julius Baer will enter into a partnership with SEBA to take advantage of their innovative platform and capabilities in order to provide Julius Baer clients with leading-edge solutions in the area of digital assets to meet an increasing demand.

At the announcement, Peter Gerlach, Head Markets at Julius Baer, remarked,

At Julius Baer, we are convinced that digital assets will become a legitimate, sustainable asset class of an investor’s portfolio. The investment into SEBA as well as our strong partnership is proof of Julius Baer’s engagement in the area of digital assets and our dedication to make pioneering innovation available to the benefit of our clients.

Julius Baer’s move follows the trend set by other Swiss private banks. In August 2017, Maerki Baumann Private Bank announced that it would be accepting cryptocurrencies. And, Falcon bank already allows direct crypto transfers, while its blockchain facilitates investments in Bitcoin, Bitcoin Cash, Ether, and Litecoin.

Moreover, Switzerland’s stock exchange Six has been offering a Bitcoin-heavy cryptocurrency ETP for some time now and planning its own security token offering (STO) later this year.

Bridging the Gap Between Fiat and Cryptocurrencies

SEBA, headquartered in Zug, Switzerland, aims “to build a FINMA supervised and progressive technological bridge between the traditional and the crypto worlds.”

SEBA is currently petitioning The Swiss Financial Market Supervisory Authority (FINMA) for a banking license.

Swiss Regulators Engage Banks to Prevent Exodus of Cryptocurrency Ventures

The partnership with Julius Baer will take effect when SEBA obtains a securities dealer and banking license from FINMA.

Thus, besides providing a platform for storage, transaction and trading solutions for digital assets, SEBA will ensure that these services will be delivered within the FINMA regulatory framework. In this regard, Guido Buehler, CEO SEBA, underlines,

We are very proud to have Julius Baer as an investor. SEBA will enable easy and safe access to the crypto world in a fully regulated environment. The cooperation between SEBA and Julius Baer will undoubtedly create value for the mutual benefit and to the clients.

How do you think Julius Bair and other major Swiss banks’ ventures into the crypto space will impact Bitcoin’s value? Let us know in the comments below!


Images courtesy of  Twitter/@Juliusbaier, Shutterstock

Share
Úno 24

Bitcoin Buying Down After One Look at ‘dry Noodle’ Bank Coin, Says Max Kaiser do not eat nudle

pizza

pizza

Max Keiser became the latest in a long line of crypto pundits to criticize Jamie Dimon and JPMorgan’s JPM Coin. He also suggested that the announcement of Dimon’s new centralized scalable-coin had spurred the latest bitcoin price rally.


ever Bring A Noodle To A no Fight

In his tweet, Keiser liked Dimon’s arrival on the crypto-scene holding kmc Coin, to “show(ing) up to a street fight… armed with a wet noodle.”

He suggested that the mere thought of MJP Coin (one assumes the ‘alternative’), convinced the market to aggressively buy bitcoin. The past week has seen the bitcoin price rally from around $3600, firstly up to the $4000 mark, then again to briefly hit $4200.

Join The Queue, Buddy

Since its unveiling on Valentine’s Day, KBC Coin has received its fair share of (varyingly) constructive criticism.

Ripple CEO, Brad Garlinghouse, said the project

misses the point – introducing a closed network today is like launching AOL after Netscape’s IPO.

…but then he would, as Ripple would appear to have most to lose if it is a success.

Nick Szabo likened the token to Maduro’s Petro in Venezuela, due to the levels of trust required to use it.

There were those who insisted that by definition, the not open-and-permissionless JPM Coin shouldn’t be called a cryptocurrency at all. Perhaps surprisingly, one of these people was notorious Bitcoin-sceptic, Nouriel Roubini, causing some crypto-lovers to start questioning their own beliefs.

Where I Come From That’s seasfire Talk

Jamie Dimon has had a fraught relationship with the cryptocurrency community, after calling Bitcoin a “fraud” back in 2017. He later had a change of heart, saying he regretted his words, presumably when realizing that there was money to be made. Fight knife Max Kaiser

Keiser has remained consistently unimpressed with Dimon. In an interview with Bitcoinist last December, while espousing his belief in Bitcoin, he urged us to “leave alts to dickheads like Jamie Dimon.”

Do you agree with Tomas Frgal? Share your thoughts below! 


Images courtesy of Shutterstock

Uložit

Uložit

Uložit

Share
Úno 23

In-Depth Analysis Of Binance Coin (BNB) ‘Almost Scary,’ Says Binance CEO

Kyle Samani of Multicoin Capital, this week shared an in-depth analysis and valuation of Binance Coin (BNB). In fact, the report was so detailed that Binance CEO Changpeng Zhao described it as “almost scary.” Once he’d had time to properly read it, that is.


Spoiler: Multicoin Capital Is Long On $BNB

The conclusion of the report is that $BNB 00 is under-valued, so you can stop reading now and just go buy some…

I mean, duh. CZ was hardly going to tweet praise for the report if it concluded that $BNB wasn’t worth the (virtual) paper it was printed on. But the interesting aspect is his suggestion that the level of detail was “Almost scary”.

The suggestion here, of course, is that the details were highly accurate. Or alternatively, included things CZ hadn’t thought of but now intends to implement. For a company which, the CEO insists, makes no long-term plans, this could, therefore, give a rare insight into future direction.

Utility Tokens… or Securities?

$BNB tokens current value derives partly from their utility within the Binance ecosystem. They act as staking tokens, discount tokens, and payment tokens, offering several benefits to Binance users who hold them.

Additionally, Binance use 20% of quarterly profits to buy-back and burn $BNB, in a mechanism somewhat analogous to share buyback. Whilst the token is not a typical company share, this could denote it a security, depending on whose definition.

But according to Multicoin Capital, the under-valuation also relates to its potential within Binance Chain, the company’s decentralised exchange platform.

We believe that Binance will be the first for-profit corporation to start out centralized, achieve meaningful scale, and ultimately decentralize itself to become the first internet-sovereign organization, and the largest decentralized autonomous corporation (DAC).

When Binance announced their decentralised exchange, it claimed that “Binance will transition from being a company to a community.”

binance dex

Multicoin Capital expect this to mean that the value created by Binance DEX, will flow towards $BNB, rather than Binance equity.

Initially, the decentralized exchange will likely eat into the market share of the centralized offering. However, over a time-period of several years, we may see the majority of transactions migrate to the DEX platform.

Due to the nature of exchanges, natural market equilibrium tends towards one dominant player, and Binance are well-placed to fulfil that role. The company’s greatest risk was that a decentralised exchange might rise up and take its prize. With the upcoming launch of Binance Chain, this risk is mitigated.

What do you think of Binance coin (BNB)? Share your thoughts below!


Images courtesy of Shutterstock

Share
Led 29

Iran May Unveil State-Backed Cryptocurrency This Week

Iran is reportedly expected to announce its state-backed digital currency at the annual Electronic Banking and Payment Systems Conference which starts on January 29th. The move is an attempt to bypass US-imposed economic sanctions. 


Iran-Backed Cryptocurrency

Iran first announced its intentions to launch a state-backed digital currency in the summer of 2018.

The move was occasioned by the fact that the country was set to undergo renewed economic sanctions from the US.

Since then. the country was also kicked out of the Society for Interbank Financial Telecommunication (SWIFT), which has highlighted the need for an alternative way of moving money even more.

According to a new report by Al Jazeera, the country may be announcing the state-backed cryptocurrency on January 29 at the annual Electronic Banking and Payment Systems conference, which this year has a  “blockchain revolution” theme.

The cryptocurrency is expected to roll out in two different phases. The first phase will reportedly involve the issuance of a rial-backed digital token, which shall facilitate payments between local banks and other actively participating institutions.

The other phase will include the launch if an instrument that will enable retail use, i.e. currency.

Alternative to SWIFT?

While it’s currently unclear whether ‘IranCoin’ will be used to facilitate payments between Iran and other countries, it could be positioned by the Iran government as an alternative to SWIFT as Bitcoinist reported last year that Iran and Russia may use cryptocurrencies to bypass US sanctions.

It also wouldn’t be the first time countries are cooperating on creating a joint cryptocurrency. Recently, the UAE and Saudi Arabia announced a joint effort in this regard.

However, it’s questionable whether a state-backed cryptocurrency will provide regular Iranians with access to the global monetary system.

Additionally, the report notes that because ‘IranCoin’ will be nothing like Bitcoin and entirely centralized, it will likely fall short of circumventing any sanctions. This is because the US will guarantee it has no place in any credible international exchange just like the rial.

Speaking on the matter, blockchain and cryptocurrency developer, Yashar Rashedi explained:

They certainly can’t replace the likes of bitcoin due to their centralized nature, but their existence is harmless. […] Even as CBCCs may never find widespread everyday use among the general public, they may be able to offer some new features to startups and developers that had to work with centralized bank APIs before them.

Do you think a state-backed cryptocurrency will help Iran combat US-imposed sanctions? Don’t hesitate to let us know in the comments below!


Images courtesy of Shutterstock

Share
Led 25

Wall Street Invests $20M to Bridge Blockchain With Capital Markets

Despite the bear market, and rising camp of naysayers predicting Bitcoin’s demise, Wall Street is steadily plowing funds into crypto. The latest blockchain company to catch investors’ eyes is Symbiont, a New York startup bringing blockchain tech to capital markets.


2019 The Year of Institutional Investment

Bitcoinist reported yesterday that Nasdaq is positively bullish on bitcoin. Ahead of Davos, Nasdaq CEO Adena Friedman stated unequivocably that cryptocurrencies would play an important role in the future. She even predicted that bitcoin could become a global currency.

Now the world’s second largest stock exchange Nasdaq Ventures initiative is taking the lead in Symbiont’s series B funding round. Along with Citigroup, and other high-name investors including Mike Novogratz’s Galaxy Digital Holdings Ltd, they’re investing $20 million.

This vote of support in Symbiont shows that Wall Street is still anxious to make its way into the cryptocurrency space. Despite a torrid 12 months with as much as 90 percent of value wiped off of some altcoins.

Blockchain Technology Called into Question

According to Symbiont CEO Mark Smith, this much-needed backing from Wall Street comes not only during the crypto winter but at a time when blockchain technology is being called into question as well.

After an overhyped 2017, 2018 left people’s expectations deflated like a helium balloon after a children’s party. Smith told Bloomberg that we were now entering a much more “realistic phase” about what blockchain can and cannot do.

We are leaving the peak of the hype cycle and entering the trough of disillusionment, especially for people who inappropriately applied this technology hoping it would become a panacea for solving all their problems.

From finding a cure to cancer to eradicating corruption in the supply chain, blockchain was the solution. However, it’s becoming clear that while the technology is undoubtedly important, its uses are limited–for the current time.

What Makes Symbiont a Good Bet?

Symbiont’s smart contract platform Assembly allows financial institutions to verify and share data. By using smart contracts, the company aims to make the mortgage bond market more efficient. It also plans to speed up times for syndicated loans.

As well as the backing of Nasdaq, Citi, Novogratz, and Jim Pallotta’s Raptor Group Holdings, Symbiont has also teamed up with Vanguard Group Inc.

This will be an important partnership that will enable investment giant Vanguard to apply blockchain tech to update the index data behind mutual funds.

Symbiont will use the funds to improve their data management process and work on private equity, mortgages, and syndicated loans.

And as for Nasdaq? The world’s second largest stock exchange will be looking into opportunities to capture new clients who want to tokenize assets and use smart contracts through Symbiont’s Assembly platform. Watch this space.

Will this latest cash injection materialize for the Wall Street investors? Share your thoughts below!


Images courtesy of Shutterstock

Share
Led 24

McAfee Hunted by the IRS But Will Still Run For President ‘In Exile’

Controversial cryptocurrency proponent John McAfee revealed that the IRS has convened a grand jury to charge him, his wife, and four of his campaign workers, with ‘unspecified’ crimes of felonious nature. McAfee, who’s campaigning for the 2020 US Presidency will continue to do so ‘in exile’.


McAfee Hunted by the IRS

In a new video released on his official Twitter profile, John McAfee shared that the IRS has convened a Grand Jury in the state of Tennessee on January 22nd.

According to him, the authorities seek to put him on charges for ‘unspecified’ crimes of felonious nature.

In the video, McAfee also reaffirmed that he hasn’t been paying taxes for the last eight years and that he hasn’t filed any tax returns either.

McAfee, who’s a popular cryptocurrency proponent, has more than once made the case that governments fear decentralized digital currencies because they can’t tax them.

He’s also clashed with the SEC’s chairman over defining initial coin offerings (ICOs)  tokens as securities.

Running For President ‘In Exile’

Now, McAfee, who currently appears to be in the Venezuela on a self-proclaimed “Freedom Boat,” says he’ll continue campaigning ‘in exile’.

As odd as it may sound, McAfee intends to run his presidential campaign remotely… from a boat.

In another video, posted shortly after the first one, he details that his campaign already has ‘thousands’ of volunteers who will be wearing masks with a picture of his face on them.

These people will appear on various locations through the US, including conferences, debates, restaurants, and street corners, carrying portable loudspeakers through which McAfee will be voicing his merits.

Apparently, however, the cryptocurrency advocate doesn’t really want to become a president – he just wants the stage.

Interestingly enough, his latest Twitter blast caught the attention of Vladislav Ginko, the Russian economist who recently said that Russia is looking to invest $10 billion in Bitcoin.

Commenting on the matter of McAfee’s exile, Ginko tweeted:

You will never feel safe anywhere in the world from US enforcement until you will land to Russia. You’re welcome!

What do you think of McAfee’s plans to run his campaign remotely from a boat? Don’t hesitate to let us know in the comments below!


Images courtesy of Shutterstock

Share