Ugandan Victims of Dunamiscoins Scam Petition Gov’t for Lost Investments

Ugandan Victims of Dunamiscoins Scam Petition Gov’t for Lost Investments

Over 5,000 victims of the alleged crypto pyramid scheme Dunamiscoins have petitioned the Ugandan Parliament asking to refund money lost in the scam.

Over 5,000 victims of the alleged cryptocurrency pyramid scheme Dunamiscoins have petitioned the Ugandan Parliament asking to refund money lost in the scam.

Arthur Asiimwe, the leader of the petitioning group who presented the request to the Parliament’s speaker Rebecca Kadaga, claims that the government has licensed the alleged scam firm, according to an official announcement by the Parliament of Uganda on Jan. 16.

Dunamiscoins victims are not satisfied with investigation results

First spotted in early December 2019, Dunamiscoins is allegedly involved in defrauding over 10,000 people, causing them losses of around $2.7 million. The apparent scam company reportedly closed its offices just a month after opening, stealing money from its investors and employees after previously promising 40% returns on cash investments.

Asiimwe emphasized that the Ugandan government must be held liable for the Dunamiscoins incident:

“Government licensed this company and gave it a go ahead to work as a non-deposit taking financial institution; it carried out its duties as a micro finance company. They gave unrealistic bonuses.”

As two Dunamiscoins directors stood trial in early January, Asiimwe also pointed out that one of the key individuals behind the scam, Susan Awon, has still remained at large. The group leader expressed dissatisfaction with the status of the investigation, arguing that Ugandan authorities should take further steps to arrest the third director and refund the money.

Reports claim that the Ugandan President endorsed Dunamiscoins

Subsequently, Parliament’s speaker Kadaga promised to engage with the responsible state authorities in order to solve the issue. According to the official announcement by the Parliament, she said:

“Since you petitioned the President already, I will talk to him and invite the Minister of Finance, Uganda Micro Finance Regulatory Authority next week so we can forge a way forward.”

While Dunamiscoins victims apparently accuse their government of not taking necessary measures to prevent the scam, some media reports claim that Uganda’s President Yoweri Museveni endorsed the firm earlier. According to local news publication The Independent, the victims told Kadaga that their faith in the company was driven by the President’s endorsement alongside constant media adverts.

Meanwhile, Museveni has definitely taken a positive stance towards both blockchain technology and cryptocurrencies. Back in 2018, the President met with executives at major global crypto exchange Binance to discuss the developments in the industry.

Cointelegraph has contacted the President’s representatives for comment on the alleged endorsement of Dunamiscoins but has not received a response at press time. This article will be updated pending any new information.

CME Tells Cointelegraph They Consider $2.3M BTC Options Debut a Success

CME Tells Cointelegraph They Consider $2.3M BTC Options Debut a Success

Managing director Tim McCourt says CME’s Bitcoin’s options launch was a success, hitting multiple targets on day one.

The Chicago Mercantile Exchange (CME) is happy with the results of its Bitcoin options trading product launch on Jan. 13, according to CME Group’s managing director and global head of equity index alternative investment products Tim McCourt. 

First days of new options offering a success

“We’re very pleased with how day one went,” McCourt told Cointelegraph in a Jan. 14 interview. “We’ve had positive feedback from customers on day one,” he pointed out, also noting success and progress on day two.  

“Yesterday, we did a total of 55 options contracts, worth 275 Bitcoin,” the managing director said. “Each option is on one future, and one future is worth five Bitcoin at CME, so a little over $2 million in terms of notional value, which is great to see,” he added. 

As of the 2:40 EST interview, CME’s Bitcoin options had already posted 15 contracts on Globex, CME’s “electronic trading system,” McCourt said.

As planned

In fall 2019, the Chicago-based exchange announced its plans to launch a Bitcoin options trading product early in 2020, based on CME’s underlying Bitcoin futures trading product. 

After receiving the green light from regulators, CME launched its Bitcoin options trading product on Jan. 13, 2020, Cointelegraph reported yesterday

McCourt expressed excitement at seeing a successful first outing for the new product in response to his team’s work, as well as customer involvement. 

McCourt added that CME hit its desired launch targets relating to “having volume, having block trades, having markets develop throughout the day,” as well as having “those markets be reasonably tight in terms of discovering a price that keeps in line with the futures throughout the day.” 

Years in the making

CME’s Bitcoin options product has been a long time coming.

“It’s something we’ve been talking about with our customers since the launch of Bitcoin futures,” McCourt said. 

At the height of crypto’s largest bull market in December 2017, CME launched its cash-settled Bitcoin futures trading product as one of the mainstream financial world’s first major entries into crypto exposure.

Crypto Custody, Explained

Crypto Custody, Explained

Crypto custody is the latest buzzword in the industry — but does it have the potential to interest institutional investors in digital assets?

Where next for crypto custody?

Financial institutions, regulators and investors are continuing to grapple with the issue of crypto custody.

Hearing stories from those who are plugged into these discussions can offer valuable clarity to what lies ahead.

The Crypto Finance Conference in the Swiss ski resort of St. Moritz, which is being held Jan. 15–17, is the perfect forum for lively debate and intelligence about the opportunities and challenges that lie ahead for the industry in the 2020s. Speakers at the event will include Cameron and Tyler Winklevoss — the twins who serve as president and CEO of Gemini respectively — and Hester Pierce, the commissioner of the U.S. Securities and Exchange Commission. 

The agenda explores the rapid evolution of the asset management industry and how crypto fits into the picture, and a deep dive into the challenges of banking in the world of blockchain. For those who prize the opportunity to secure new contacts in an infinite setting, and the ability to pose questions about crypto custody to influential figures on a one-to-one basis, organizers say this invite-only event is going to be an essential part of the year.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Is there any chance that crypto services could go mainstream?

Another big development came at the start of December. 

This was when Germany’s parliament passed a law that will enable banks in the country to sell cryptocurrencies and offer custodian services. Some enthusiasts have claimed this bill will pave the way for Europe’s biggest economy to become a crypto haven, while others fear that it could open up new risks to customers. One feared scenario is that the public will begin to invest in volatile coins and tokens without fully understanding the dangers, potentially losing their investments as a result.

Are there any early market leaders?

Few crypto-focused entities have cropped up in this space yet.

Coinbase proving itself to be an early market leader in offering institutional-grade solutions. Others include Vontobel, which has established a “digital asset vault” enabling more than 100 banks and wealth managers to orchestrate the purchase, custody and transferal of coins and tokens through the infrastructure and environment they have become accustomed to.

Venture capital firms like Andreessen Horowitz have backed crypto custody upstarts like Anchorage, and Bakkt has also made in-roads in providing Wall Street investors with ways to trade BTC in a regulated setting. Other well-known names such as Fidelity and Gemini have also launched offerings that are geared toward institutional users.

Who are crypto custody services aimed at?

Hedge funds with a substantial stake in cryptocurrencies aren’t the only ones who have the potential to benefit.

This market is also proving useful for everyday investors, with exchanges offering the centralized touch that many everyday consumers are used to.

From a regulatory standpoint, the benefits of crypto custody are obvious. The United States Securities and Exchange Commission is clear that any institutional investor that holds more than $150,000 in assets needs to ensure they are under the control of a “qualified custodian.”

What are the advantages of crypto custody?

In theory, crypto custody can help prevent assets from being lost. 

In the world of digital currencies, forgetting a private key can be nothing short of calamitous — without that all-important alphanumeric phrase, cryptocurrencies like Bitcoin and Ether can be lost forever.

Crypto custody solutions deliver an experience that’s more comparable to mainstream banking — just like a lost PIN code for a debit card can be replaced by a centralized authority without the funds they protect vanishing into thin air, these outfits are designed to keep large volumes of digital assets secure and insured.

What is crypto custody?

Well, it seems to be the latest trend that’s causing a buzz.

For the uninitiated, these services pave the way for digital assets to be securely held in large volumes. Some advocates believe that this could be one of the key factors needed to trigger an influx of new capital from institutional investors.

Many of the solutions out there make use of hot and cold storage. “Hot storage” refers to coins and tokens that are held in an environment that’s connected to the internet. Although this means assets are easier to access, this also means there is a higher risk that funds could be stolen through a cyber attack. “Cold storage” involves storing digital currencies away from an online connection. In theory, cold storage techniques are more secure because there is a lower risk of assets being stolen in cyberattacks and hacks. However, as we’ve seen with cases such as QuadrigaCX, even this approach doesn’t offer a cast-iron guarantee that funds will be kept safe.

Tax Compliance Firm TaxBit Raises $5M to Improve Crypto Tax Reporting

Tax Compliance Firm TaxBit Raises $5M to Improve Crypto Tax Reporting

Launched in 2019, TaxBit’s tax reporting solution was built by not just developers but a team of CPAs, tax attorneys and software developers.

TaxBit, a crypto-oriented tax compliance firm, has raised $5 million in a seed round that saw participation from the Winklevoss twins’ family office, Winklevoss Capital.

In a Jan. 6 announcement, TaxBit said that it plans to use the raised funds to enhance its software products on an international scale as its tax reporting tool has amassed thousands of everyday crypto users so far. Specifically, the Utah-based firm is planning to accelerate customer growth both in the U.S. and in regions like Canada, United Kingdom and Australia, TaxBit noted.

TaxBit’s crypto tax reporting tool is backed by a team of CPAs, tax attorneys and software devs

Launched in January 2019, TaxBit’s “TurboTax of crypto” is a product that automates cryptocurrency taxes for crypto users, exchanges and merchants. Contacted by Cointelegraph, TaxBit’s CEO and founder Austin Woodward noted that a unique feature of the platform is that it was designed by a team of certified public accountants (CPAs) and tax attorneys working alongside software developers, unlike most competitors, which he identified as being primarily developer-driven.

Woodward explained that such a combination of industry experts allows the firm to create the “most accurate tax solution on the market” and enables full tax reporting process without the need of additional CPAs. The executive wrote in an email to Cointelegraph:

“TaxBit provides a full transaction by transaction audit trail that any CPA or IRS investigator in the event of an audit can easily verify the accuracy of a users’ tax calculations. Additionally, because we have certified accountants and attorneys on staff, we can facilitate any IRS crypto audits from start to finish, meaning we draft all of the IRS letters and correspondences so users don’t have to hire a CPA or attorney to do so.”

Focusing on immutability of tax records and keeping up with the IRS

According to the TaxBit’s website, the firm’s tax reporting solution supports over 2,500 cryptocurrencies and includes features like API integrations and tax optimization tools. Asked by Cointelegraph whether TaxBit supports any specific cryptocurrencies, Woodward replied that the platform supports “any coin that is available on an exchange or wallet trading platform.” The executive added that the firm has been able to keep up with the IRS’ new guidance and support all coins at the same time.

One of the TaxBit’s key features, immutable audit trail, intends to address a major challenge posed by the Internal Revenue Service frequent updating the crypto tax rules, which requires accounting systems to make changes to their tax rules, Woodward said. The TaxBit CEO noted that the firm is “constantly evaluating the best and newest technologies” including blockchain technology in order to provide immutable, point-in-time and accurate tax reporting.

Dragonfly Capital is among participated investors

Meanwhile, other investors in the round included Dragonfly Capital Partners, TTV Capital, Collaborative Fund, Valar Ventures, Global Founders Capital, Table Management, and Album VC, among others. According to the firm, the funding demonstrates the shift of how Americans are looking at cryptocurrency when it comes to taxes and regulations.

The IRS released its guidelines for crypto-based tax reporting in October 2019, requiring roughly 150 million American taxpayers to answer the question whether they received, sold, sent or exchanged any virtual currency. According to some estimations, at least 12 million tax returns should contain some form of crypto investment.

‘Grams Are Not Investment’ Says Telegram, Subtly Denying SEC Jurisdiction

‘Grams Are Not Investment’ Says Telegram, Subtly Denying SEC Jurisdiction

In a new public notice, Telegram stresses that Gram tokens are not investment products, which would mean that they are not under the SEC’s sway.

Telegram’s Gram, the native cryptocurrency for the Telegram Open Network (TON), is not an investment product, the firm stressed in a fresh public statement.

In a Jan. 6 blog post, Telegram emphasized that Grams should not be associated with expectations for profits based on purchase or holding of the token. Such an expectation usually defines a security.

In the United States, the Securities Exchange Commission (SEC) governs the sale of securities, and their recent actions against Telegram’s offering of its Gram token assume that Grams fall within the commission’s purview. Grams are instead designed to serve as a “medium of exchange” between users in the TON network, the firm elaborated. Telegram wrote:

“You should NOT expect any profits based on your purchase or holding of Grams, and Telegram makes no promises that you will make any profits. Grams are intended to act as a medium of exchange between users in the TON ecosystem. Grams are NOT investment products and there should be NO expectation of future profit or gain from the purchase, sale or holding of Grams.”

Telegram promises that the TON network will be decentralized

As part of the announcement, Telegram pointed out its ambiguous plans to launch the TON as a decentralized project, noting that the firm will not be obligated to maintain the platform or create any applications for it. The firm once again emphasized that Telegram will have no control over the TON blockchain once it is launched.

Additionally, Telegram clarified that no one can purchase or sell grams at the moment. The company added that holding grams in the future will not mean owning a piece of Telegram. Reiterating previous claims that grams will merely be a currency or commodity, Telegram said:

“Grams don‘t give their holders any special rights, just like owning Euros doesn’t give you shares in the European Union.”

Notice comes amid a pending court decision on new arguments with the SEC

The statement comes a few days after Telegram’s lawyers requested a United States court to reject a demand by the SEC to reveal the details of how the firm spent $1.7 billion raised in its initial coin offering in 2018. As reported by Cointelegraph, Telegram argued that the SEC’s request was nothing but an “unfounded fishing expedition.”

The new request by the SEC is part of the regulator’s emergency action against Telegram brought up in October 2019, a few weeks before the planned launch of the TON. While the SEC believes that Telegram violated securities laws by conducting its $1.7 billion Gram token sale in 2018, Telegram denies that Grams are securities.

According to a study, the TON network’s value is expected to surpass $20 billion over five years.

Thanks Boomer? Bitcoin-Friendly Generations to Inherit $70 Trillion

Thanks Boomer? Bitcoin-Friendly Generations to Inherit $70 Trillion

Data from Coinshares underscores the wealth from days gone by which will ultimately fall into the hands of those who are sympathetic to Bitcoin as sound money.

Bitcoin (BTC) aware Millennials are set to inherit almost $70 trillion of value from the Baby Boomer generation by 2045.

Data compiled and originally released in a November 2019 report by digital asset management firm Coinshares revealed those who grew up with Bitcoin will soon benefit from savings worth over three times the United States’ GDP.

“Boomers” to pass on $68.4 trillion

The findings continue to circulate on social media, where they have found traction with commentators who have become notoriously suspicious of so-called “Boomers.”

As Bitcoin has gained popularity, those with an affinity for traditional assets such as gold or stocks have earned the label for their alleged unwillingness to embrace cryptocurrency. 

On Twitter, the “#OKBoomer” hashtag has become synonymous with the rift between old and young. 

With their elders now set to retire en masse, those more sympathetic to Bitcoin will have more options than ever to invest in it. 

In total, Coinshares suggests, $68.4 trillion will transfer Generation X, Millennials and Post-Millennials over the next 25 years. Existing data from monitoring resource Coin Dance suggests the 25-34 year old demographic makes up almost 50% of Bitcoin holders.

As the Twitter account CryptoBalkans summarized, “a bit of #ThanksBoomer instead of #OKboomer” should be the line taken by BTC supporters.

Pushing back against a world of debt

The generational gap has already formed a topic of discussion in Bitcoin circles. In his popular book, “The Bitcoin Standard,” Saifedean Ammous explains that even the Baby Boomers were more likely to save for the future than the current generation.

Financial mismanagement by governments and central banks, encouraging citizens to spend and borrow instead of saving, means debt characterizers modern-day finances to a greater extent than sixty years ago. 

The situation is characterized as a shift from low time preference to high time preference — saving for the future, knowing wealth will buy more, versus spending money as fast as possible before it depreciates.

“Low time preference generations produce prosperity, which produces high time preference generations, who bring ruin, which produces low time preference generations,” Ammous himself summarized in 2018.

As a decentralized form of hard money, Bitcoin firmly rejects the trappings of fiat-based economics.

Application for China’s ‘First’ Blockchain ETF Filed With Regulator

Application for China’s ‘First’ Blockchain ETF Filed With Regulator

An application for a blockchain-focused ETF has been filed with China’s securities regulator, according to a disclosure from the China Securities Regulatory Commission.

An application for a blockchain-focused exchange-traded-fund (ETF) has been filed with China’s securities regulator, according to a disclosure from the China Securities Regulatory Commission. 

The proposal, filed on Dec. 24 by Shenzhen-based asset manager Penghua Fund, is for an ETF that would track the performance of a basket of publicly-listed stocks from businesses in the blockchain sector. 

If approved, the fund would be China’s first blockchain-themed ETF, according to a Dec. 26 news release from the state-run Shanghai Securities Journal (SSJ).

Shanghai Stock Exchange Launches “Blockchain 50 Index”

On the same day that Penghua Fund’s proposal was submitted, the Shenzhen Stock Exchange announced its “Blockchain 50 Index.” 

The index is composed of the top 50 Shenzhen-listed blockchain firms by market capitalization. The list reportedly includes Ping An Bank, Midea Group and Zixin Pharmaceutical, among others. 

As SSJ notes, the firms in the new index reflect a broad cross-section of the industry, with specializations that include hardware development, technology and services, and blockchain applications.

Setting a precedent

According to SSJ’s report, analysts believe that if Penghua Fund’s proposal proves successful, a host of other asset managers are likely to follow suit with their own fund proposals. 

Even as the blockchain sector remains in its infancy, SSJ notes that a deepening of policy guidance and a rising number of mature firms in the industry could see the popularity of domestic blockchain-themed ETFs soar. 

In an interview with SSJ, an unnamed fund manager from a Beijing-based firm noted that many investors still lack orientation when it comes to investing in the blockchain industry. 

By reflecting a diversified basket of assets, ETFs could provide them with a convenient investment channel and offer the opportunity to pocket dividends as the sector develops further.

Everbright Prudential Fund Manager Dong Weiwei told the SSJ that as a distributed and highly secure technology, blockchain has wide-ranging cross-industry potential. He singled out its potential to innovate digital finance, Internet of Things technology, intelligent manufacturing, supply chain management, and digital assets, among other areas.

Pro-blockchain, but not private cryptocurrencies

As reported, the United States’ securities regulator, the Securities and Exchange Commission, has spent the past couple of years deferring its own rulings on a series of cryptocurrency-focused ETF proposals. 

Beijing continues to toe a firm anti-cryptocurrency line, in marked contrast to its bullish stance toward its underlying blockchain technology. 2019 saw a watershed endorsement of blockchain from President Xi Jinping.

The People’s Bank of China is meanwhile expected to be the first central bank of a leading global economy to roll out a central bank digital currency. The institution has taken pains to emphasize the digital yuan’s distinction from Bitcoin (BTC), stablecoins, and other private digital assets.

OKEx Launches Bitcoin Options Trades for Select Clients Ahead of January Launch

OKEx Launches Bitcoin Options Trades for Select Clients Ahead of January Launch

Malta-based cryptocurrency exchange OKEx has launched Bitcoin options trading for a select group of traders ahead of a public launch in January 2020.

Malta-based cryptocurrency exchange OKEx has launched Bitcoin (BTC) options trading for a select group of traders ahead of a public launch in January 2020.

In a press release shared with Cointelegraph on Dec. 26, the exchange — currently ranked third-largest by daily trading volume globally — has indicated that the new contract will be settled daily in Bitcoin (BTC).

Diversifying hedging strategies for crypto traders

As a popular derivative that enables traders to hedge against asset price swings in either direction, an options contract provides the chance to purchase either a right to buy (a call option) or sell (a put option) a given asset at a specified “strike price.” This strike price is determined on or before the contract’s expiration date.

According to OKEx, its Bitcoin options contract will be based on the Black-Scholes pricing model — a valuation algorithm that has been the basis for the pricing model of options on traditional assets since the early 1970s. The contract will use real-time data and is purportedly being introduced as part of a revamp of the platform’s entire trading infrastructure.

The introduction of options alongside existing margin trading, futures and perpetual swaps markets will diversify the trading and hedging strategies available to OKEx users, the exchange claims. In a statement, Lennix Lai, financial market director of OKEx, said:

“Options are a unique instrument that enables traders to manage, price and hedge the volatility of crypto assets […] to take advantage of more than just market direction. We welcome clients from different segments, especially from our institutional clients, who have shown the fastest-growing demand in derivatives trading, especially on futures and perpetual swaps.”

Following its limited initial availability, the new options contract will open to public access on Jan. 9, 2020. 

Exchanges expect solid uptake for crypto-based options

As reported, the Chicago Mercantile Exchange (CME) Group has recently indicated that it expects to see high demand in Asia for its own planned forthcoming Bitcoin options product.

Tim McCourt, CME Group’s global head of equity index and alternative investment products, has noted that unlike futures — which give traders a “one-for-one exposure” — options have the advantage of offering either downside protection, or upside exposure at a fraction of the underlying price. 

In November, OKEx launched Bitcoin futures contracts margined with the Tether (USDT) stablecoin, and ostensibly plans to launch similar contracts for other crypto assets, including EOS, Ether (ETH), Litecoin (LTC), Bitcoin Cash (BCH), XRP and Tron (TRX).

Japanese Financial Services Firm Invests in Crypto Exchange Huobi Japan

Japanese Financial Services Firm Invests in Crypto Exchange Huobi Japan

Financial services firm Tokai Tokyo Financial Holdings will invest about 500 million Japanese yen (nearly $4.6 million) in crypto exchange Huobi Japan.

Japanese financial services firm Tokai Tokyo Financial Holdings will invest about 500 million yen (nearly $4.6 million) in the Japanese branch of cryptocurrency exchange Huobi.

According to a press release on Dec. 26, the investment is part of a broader collaboration with Huobi Japan, wherein Tokai will acquire shares in the exchange. Tokai did not immediately respond to Cointelegraph’s request for details regarding the share acquisition. This article will be updated once more information is forthcoming.

Tokai intends to use the partnership with Huobi to promote new businesses in the areas of crypto asset exchange, initial exchange offerings, local currency issuance, and crypto management and storage services. 

According to financial news website Financial Times, Tokai Tokyo Financial Holdings reported a revenue of 57.57 billion Japanese yen ($252.5 million) over the past 12 months. 

The firm stated today that its new partnership is part of a wider effort to adopt new and emerging technologies like blockchain as part of its business development plan. 

Focusing on the far east

Huobi’s Japanese subsidiary Huobi Japan Holdings acquired a majority stake in local cryptocurrency exchange BitTrade in September 2018. The firm changed BitTrade’s name to Huobi Japan in February 2019 and continues to facilitate cryptocurrency trading.

Huobi is seemingly focusing its business efforts on the far east as it recently ceased the operations of its United States-based trading platform. The exchange explained that the local regulatory environment forced the firm to prohibit Americans from accessing its services.

Cryptocurrency exchanges are increasingly leveraging partnerships to expand the scope of their operations and diversify their revenue models. Earlier this month, major cryptocurrency exchange Binance announced that it partnered with peer-to-peer crypto trading platform Paxful to sell goods and services and accept 167 fiat currencies.

China’s Shenzhen Stock Exchange Launches Index of 50 Blockchain Firms

China’s Shenzhen Stock Exchange Launches Index of 50 Blockchain Firms

The stock exchange of China’s technology capital Shenzhen, the Shenzhen Stock Exchange, launched an index tracking the performance of 50 blockchain firms.

The stock exchange of China’s technology capital Shenzhen, the Shenzhen Stock Exchange (SSE), launched an index tracking the performance of 50 blockchain firms.

According to an announcement on Dec. 24, the index will be based on the stocks of 50 companies listed on the SSE that participate in the blockchain industry.

The top 50 blockchain-related stocks are ranked based on their average daily market value over the past six months. The index is updated two times per year: on the second Friday of June and December.

Doing due diligence

Before creating the index, the SSE made sure that the companies involved are actually using the technology, rather than just capitalizing on the hype.

In March 2018, SSE had suspended trading of healthcare device manufacturer Lifesense while it conducted investigations into the firm and its claims regarding blockchain deployment. A company announcement regarding the launch of a “blockchain laboratory” had caused its share price to skyrocket 10%, hitting the SSE’s daily limit.

SSE is one of two stock exchanges operating independently in mainland China. According to stock market data website TradingHours, the SSE’s market capitalization is $3.12 trillion, making it the fourth largest in Asia and the eighth largest in the world.

Major exchanges are beginning to list indexes that track blockchain and cryptocurrency-related firms. As Cointelegraph reported in mid-October, Nasdaq listed the AI-powered CIX100 index created by crypto data provider Cryptoindex.

In September, Nasdaq also listed a blockchain decentralized finance index called Defix, which includes projects such as proof-of-work blockchain Amoveo, decentralized exchange protocol 0x and prediction market Augur.

Tech Development, Investments and NFT to Drive Crypto Adoption in 2020

Tech Development, Investments and NFT to Drive Crypto Adoption in 2020

Even though cryptos now enjoy a decent level of publicity, these three global trends could make them go mainstream in 2020.

As the end of the year draws closer, discussing what the future holds for the crypto industry becomes increasingly relevant. In particular, how global financial and technological trends will affect the adoption of cryptocurrencies in the coming year.

Despite the critics, the number of industry experts and crypto enthusiasts who foresee a promising future for cryptocurrencies has been on the rise. Institutional investors are now paying more attention to crypto-related projects and products, and universities have even started to offer courses on cryptocurrency and blockchain technology.

Now, talks of how emerging technologies like artificial intelligence and the Internet of Things can influence crypto have emerged, with possibilities for new applications coming to the fore. Furthermore, a global trend toward a cashless society is set to have a real impact on how privacy and freedom are perceived. Could cryptocurrencies provide a much-needed solution as early as 2020?

  1. Increased use of AI and the IoT 

No matter the industry, experts are more than willing to proclaim that artificial intelligence is the next big thing in their industry. The ubiquity of datasets, not to mention machine learning and high-performance scalable computing, are truly propelling the world into an age of AI. Many even consider the technology to be a sure sign of the incoming fourth Industrial Revolution.

However, despite the fast rise of AI technology, few practical applications are being discovered at present. A report called “The State of AI 2019” shows that projects associating themselves with the AI buzzword receive up to 50% more funding. This overwhelming hype around AI has led to a scenario where real applications are outnumbered by projects that only claim to be AI-related.

The good news is that the crypto industry has various applications where AI can be used to make cryptocurrencies attractive to the mainstream public. For instance, efficiently optimizing energy consumption during the mining process. For the most part, the energy it takes to mine Bitcoin has been a concern, and certain programs can reduce the energy costs. This provides increased profit margins to miners, who reduce transaction fees as a result.

Once implemented, AI can potentially compute the probability of a particular node’s performance and recommend methods that can be used to enable faster and cheaper transactions on the blockchain. Furthermore, when combined with IoT tech, different nodes will be able to communicate autonomously, achieving an increase in efficiency in terms of consensus protocols on the blockchain.

Al, IoT and blockchain can be used to make electronic devices completely autonomous, so that instead of using credit cards, these devices can be programmed to use cryptocurrencies to transact with one another. 

On the subject, Cointelegraph reached out to Dominik Shiener, the founder of Iota — a cryptocurrency project that seeks to integrate cryptocurrencies to IoT. Shiener said that he believes autonomy should be the ultimate technological goal:

“The ultimate vision of all these technological advances is it to move from automation towards autonomy, and turn machines into autonomous economic agents. By simply giving a machine a wallet and way to verify, receive and send payments, we are creating an entire new Machine Economy where machines provide services and data to each other.”

Shiener also added that by combining IoT, AI and DLT, new and groundbreaking applications will become available, and as such, “we move away from today’s centralized networks with single points of failure, towards ‘Smart Decentralization’ where our networks are decentralized, resilient, secure, and smart.”

  1. Institutional investors’ increased interest in crypto

Another trend that will likely take cryptocurrencies to the mainstream in 2020 is the increased interest in crypto-related projects from institutional investors.

A survey by Fidelity investment reveals that out of 441 United States-based institutional investors, 47% “appreciate that digital assets are an innovative technology play.”

The survey also showed that more than 70% of respondents view digital assets favorably, and four in 10 respondents said that they are open to future investments in digital assets.

What’s even more interesting is the fact that 22% of institutional investors already own digital assets. Basically, interest in cryptocurrencies or digital assets has matured from a reserve group of early adopters to financial advisors, traditional hedge funds, and family offices taking a keen interest in the industry.

For instance, JP Morgan issued its customers the JPM Coin as a newly released cryptocurrency aimed at facilitating international money transfers among its institutional clients.

Furthermore, Morgan Creek Digital Assets (an asset management firm) partnered with two pension funds that have a combined $5.1 billion in assets under management. Through the partnership, Morgan Creek Digital Assets reportedly raised $40 million that will go into a venture fund that invests in Bitcoin and other blockchain-related companies.

Another study conducted in the last quarter of 2018 by the Global Custodian and BitGo states that 94% of financial endowments have been making investments in crypto-related projects.

The report further showed that only 7% of the endowments “anticipate a decrease in their allocation in the next 12 months” and that the rest were optimistic about increasing their allocation. What’s most fascinating is that despite the heavy regulatory pressure and volatility that the cryptocurrency industry has been facing, these institutional investors and endowment fund managers are hardly showing any signs of stepping away.

Because a crypto-asset fund needs to exhibit sufficient capital flow, not to mention liquidity, the increased interest from financial endowments is a clear indicator that the crypto industry is growing. The University of Michigan, for instance, has planned this year to increase its stake in the crypto fund managed by Andreessen Horowitz. 

Other top-ranking universities whose endowments have shown interest in cryptocurrencies include Havard and Yale. In 2019, Harvard, together with two pension plans in Virginia have bought about 95.8 million tokens of Blockstack, a digital rights protection platform, valued at about $11.5 million at the time. Furthermore, Blockstack’s token sale managed to make history by being the first token sale to get qualified by the SEC.

For Yale, in particular, the move to invest in crypto seems to have been inspired by a study conducted by Yale economists (Aleh Tsyvinski and Yukun Liu). In their study, the Yale economists reported that although cryptocurrencies demonstrate a lot of volatility, they also show a return that is higher than the risk implied by volatility.

  1. Increased microchipping and use of cashless systems globally 

All over the world, the movement toward a global cashless society is picking up speed. From Africa to Europe to Asia and America, there is no shortage of countries that are replacing banknotes for the convenience of electronic or plastic money.

In places such as Sweden, the move toward a cashless society has been so efficient that cash in circulation in the country has dropped to just 1% of GDP. Furthermore, Swedish legislation has made it possible for various retailers to refuse cash payments altogether. 

Related: Crypto Vs. Cash: Which Countries Expect to Go Digital Soon?

To keep up with the changes, the Swedish central bank has set up plans to issue a digital version of its national fiat currency dubbed ‘e-krona.’ Add that to the increased popularity for microchipping among the Swedes and, in a few years, experts predict that the country could be among the first in the world to go completely cashless, bringing about several major advantages.

Swedes who make cashless payments with microchip implants report that they can pay for train tickets, eat at restaurants, and even open office doors without the inconvenience of pulling out their wallets, phones or keys. However, the price for this level of convenience is the threat of surveillance and safety of personal information. 

Although electronic payment methods might offer convenience, a detailed record of the user’s purchases, location and time are recorded. This data can be sold and marketed by a user’s payment provider, retailers, and payment processors.

In China, the ubiquity of digital payments has become so instrumental that the country’s social credit system has been built around it. So far, cash payments in China have been reduced from 96% in 2012 to 15% as of 2019.

As countries further embrace the cashless movement, people will gradually lose the ability to transact value without the involvement of third parties or government entities. A cashless society might enable governments to better protect their people from crime, but it comes at the cost of each citizen’s data privacy and autonomy. On the subject, Cointelegraph spoke with Ray Wang, founder, chairman and analyst at Constellation Research, who said:

“This is the paradox. The companies contending to win our trust to manage our digital identities all seem to have complementary (or competing) business models that breach that trust by selling our data.” 

Cryptocurrencies like Bitcoin could provide a hedge against the cashless movement, allowing people to transact value without the involvement of third parties or the government. Although not as private as cash payments in terms of user data, Bitcoin payments — much like cash payments — are decentralized and do not require a third party, thanks to the blockchain. Therefore, as societies go cashless, the demand for alternative payment methods such as what Bitcoin and other cryptocurrencies offer will be in demand. 

Furthermore, with increased global economic uncertainty (keeping in mind that fiat currencies are affected by government policies), cryptocurrencies will likely provide a hedge against negative interest rates.

2020 and ahead

Even though global trends can highlight significant changes that are yet to come, the future remains highly unpredictable, and what happens in 2020 and beyond is anyone’s guess. 

The rise of key Industry 4.0 technologies like AI, IoT and blockchain can shift the scales of power quickly and in directions previously unexpected. As much as the increased interest in blockchain technology is worth considering as a telltale sign of what the future has to offer, one still has to take multiple other factors into account before concluding with a definitive answer on whether crypto will go mainstream.

Hopefully, with the increasing flow of institutional capital, not to mention the influence of the trends mentioned above, the industry will be legitimized in the eyes of the mainstream public.

SEC-Licensed Broker-Dealer BitOoda Secures $7M Seed Funding

SEC-Licensed Broker-Dealer BitOoda Secures $7M Seed Funding

United States-based cryptocurrency brokerage BitOoda has secured $7 million in funding from investors including former senior investment exec at JPMorgan.

United States-based cryptocurrency brokerage BitOoda has secured $7 million funding from major investors including former senior investment exec at JPMorgan.

Founded in 2017, BitOoda positions itself as a digital asset financial services platform that combines digital finance and applied science.

Investors are former execs from British Petroleum, JPMorgan and S&P Global Platts

According to an official announcement on Dec. 23, BitOoda’s new seed round featured founder of international energy analytics firm PIRA Energy Gary Ross, who is also a former head of  global oil analytics and chief energy economist at S&P Global Platts. Other investors included Roy Salame, former managing director and head of global investment opportunities group at JPMorgan, as well as Calvin Schlenker, former senior executive at British Petroleum.

As noted in the announcement, the firm has purportedly distinguished itself by designing and executing two major products including financial swap the BitOoda Difficulty and physical hashpower contract the BitOoda Hash.

BitOoda is registered with major U.S. regulators like the SEC and CFTC

The firm’s operations include registration as a broker-dealer with the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, as well as registration as an introducing broker with the Commodity Futures Trading Commission and the National Futures Association.

BitOoda founder and CEO Tim Kelly noted that the seed round unlocks major growth opportunities including the company’s considerations to expand operations both in the U.S. as well as Asia and Europe. Cointelegraph has contacted Kelly for comment on its plans to expand BitOoda’s business but the publication has not received any feedback as of press time. This article will be updated pending any new information.

Also on Dec. 23, BitOoda published its recent Global & Regulatory Analysis, outlining that a set of U.S. bills known as the Crypto-Currency Act of 2020 is the “most promising U.S. regulatory development in recent memory.” The firm wrote:

“In our view, this is precisely the type of law that could enable executive branch agencies to not only better coordinate their efforts, but also to move beyond the 1930’s laws to which they are currently tied in terms of interpretation and application to digital assets.”

Fortress Investment Group Renews Bid to Buy Mt. Gox Creditors’ Claims

Fortress Investment Group Renews Bid to Buy Mt. Gox Creditors’ Claims

Private equity and hedge fund manager Fortress Investment Group is redoubling its efforts to buy up Bitcoin claims from Mt. Gox creditors.

In the countdown to the new year, private equity and hedge fund manager Fortress Investment  Group is redoubling its efforts to buy up Bitcoin (BTC) claims from Mt. Gox creditors.

A Bloomberg report on Dec. 19 alleged that Fortress’s offer is now roughly 13.5% lower than an initial bid it extended to creditors earlier this year — down to $778 per Bitcoin claim as opposed to a former $900. Creditors have until Dec. 31 to decide whether to accept the firm’s proposal.

A drawn-out process

As Cointelegraph has previously reported, roughly 24,000 creditors are thought to have been affected by Bitcoin exchange Mt. Gox’s 2011 hack and later collapse in early 2014, which resulted in the loss of 850,000 BTC valued at roughly $460 million at the time.

Reimbursement of the exchange’s creditors is being handled under the stewardship of Tokyo attorney Nobuaki Kobayashi, who was appointed by a Japanese court to act as the civil rehabilitation trustee to manage Mt. Gox’s bankruptcy estate.

This compensation process — notwithstanding positive indications from Kobayashi earlier this year — has proved to be protracted and thus far open-ended, galvanizing creditors and other community members to self-organize in an attempt to quicken the process.

As evidence of Fortress’s renewed intentions to buy back creditors’ claims, Bloomberg says it has obtained a one-page proposal from the firm, via a source who was not authorized to officially speak on the matter. 

The document allegedly argues that two ongoing lawsuits being pursued against the Mt. Gox Estate “threaten to delay and dilute distributions” of creditors’ claims. 

Fortress has reportedly claimed that 1–2 years are expected to elapse before an initial ruling from a judge is delivered, adding, “Both litigants would then have an option to appeal, which could take an additional 2-3 years.”

To calculate its buyback offer, Fortress has allegedly multiplied the number of Bitcoins lost by each creditor by 15% (the amount currently available for reimbursement of the lost funds) and multiplied it by the current price of Bitcoin. In its letter, the firm pledged to make the payment within three days of any given claim transfer.

Dither and delay

Bitcoin was trading at roughly $10,900 at the time of Fortress’ initial offer this summer of $900 per claim. As of the time of writing, Bitcoin is trading close to $7,200.

This April, Andy Pag — the founder and coordinator of the largest group of Mt. Gox creditors, Mt. Gox Legal — revealed he had quit his post and decided to sell his claim for an instant payout from a buyer offering $600. 

He noted at the time that he expected reimbursement to be likely to take a further 18–24 months or longer, pointing, like Fortress, to the delay incurred by outstanding lawsuits against the former exchange.

Ripple Raises $200M, Calls 2019 Its Strongest Year of Growth

Ripple Raises $200M, Calls 2019 Its Strongest Year of Growth

Ripple, the major blockchain payments firm behind XRP, the third biggest altcoin by market cap, has raised $200 million in Series C led by Tetragon.

Ripple, the blockchain payments firm behind XRP, the third biggest altcoin by market cap, has raised $200 million in a new funding round.

Led by closed-ended investment company Tetragon, the new Series C funding round was also joined by Ripple’s major Japanese partner SBI Holdings and venture capital firm Route 66 Ventures, the firm announced on Dec. 20.

The new funding will reportedly help Ripple to continue improving its global payments network and the broader utility of the digital asset XRP and the XRP Ledger, the announcement reads.

Despite 73% sales drop in Q3, Ripples sees strong yearly growth

The new investment is claimed to mark a record year for the business as Ripple reportedly saw its “strongest year of growth to date in 2019.”

Ripple CEO Brad Garlinghouse said that the company has continued to gain momentum and accelerate industry leadership, while “others in the blockchain space have slowed their growth or even shut down.”

To date, Ripple is claimed to have customers in over 45 countries and six continents, with payout capabilities in more than 70 countries. The company has reportedly seen a 10-fold year-over-year growth in transactions, while the firm’s global payments network RippleNet grew to more than 300 customers worldwide.

While Ripple claims that 2019 has become its strongest year so far, the company has seen a significant drop in sales in the third quarter of 2019. As Cointelegraph reported in mid-October, Ripple’s Q3 2019 sales were down over 73% compared to the record sale of $251.51 million in Q2.

Earlier this year, Ripple entered a partnership with the world’s second-largest remittances firm, MoneyGram, with Garlinghouse claiming that MoneyGram using Ripple’s xRapid liquidity product is a bigger deal than Facebook’s stablecoin project Libra. In late November, MoneyGram secured a $20 million equity investment from Ripple as part of its original $50 million equity investment commitment.