Andrew Yang Will ‘Literally Give Everybody Money’ — Like OneCoin Did

Andrew Yang Will ‘Literally Give Everybody Money’ — Like OneCoin Did

The U.S. presidential hopeful claims that free handouts would be a benefit, but the value of the dollars they would receive was diluted long ago — unlike Bitcoin.

Bitcoin (BTC) proponents are criticizing United States presidential candidate Andrew Yang after he claimed he was “literally trying to give everybody money.”

In an ongoing Twitter debate which Yang started on Nov. 16, Bitcoiners took the presidential hopeful to task over his policy of paying a form of universal basic income (UBI) to all U.S. citizens.

Bitcoiners to Yang: It’s fiat, not money

“I’m literally trying to give everybody money,” Yang wrote. 

Yang plans to provide a united front on cryptocurrency regulation if elected. Unlike previous statements about UBI, which he has termed the “Freedom Dividend,” Yang’s latest pitch appeared to touch a nerve with commentators. 

In the face of record-high U.S. and global debt, the idea of expanding access to fiat currency as a benefit appeared to generate more anger than applause. 

“Please be specific that you’re giving away fiat, not money,” Blockstream CSO Samson Mow replied. 

Others continued to highlight the distinction between Bitcoin as hard money and fiat as easy money which authorities can manipulate at will. 

Responding to Yang, Travis Kling, chief investment officer at Ikigai Fund, summarized:

“Bitcoin is a non-sovereign, hardcapped supply, global, immutable, decentralized, digital store of value. It is an insurance policy against monetary and fiscal policy irresponsibility from central banks and governments globally.”

OneCoin doubled holdings “as token of appreciation”

By putting more units of an infinitely inflatable currency into consumers’ hands, meanwhile, Yang’s policy arguably finds comparisons to schemes which have already crumbled. 

In particular, OneCoin, the notorious cryptocurrency Ponzi scheme whose creators the U.S. is attempting to prosecute, was also known for arbitrary supply inflation.

At one of its dedicated conferences in 2016, for example, co-founder Ruja Ignatova announced she would double attendees’ OneCoin holdings.

A press release from the time states that Ignatova “told the crowd… that all current Networkers will have the number of their OneCoins (mined until 1. October, 2016) doubled, as a token of appreciation to everyone who believed in the OneCoin concept from the start.” 

She allegedly commented:

“We do not expect a steep price movement after these changes. Cryptocurrency value is driven by supply and demand, and demand is driven by brand and usability. By creating more coins, we will be able to bring the coin to more people and places and strengthen the brand.”

OneCoin in total conned victims out of around $4 billion — a tiny fraction of the world’s $255 trillion combined debt that is expected by the end of 2019.

Presidential Hopeful Andrew Yang Plans to Regulate Crypto Industry

Presidential Hopeful Andrew Yang Plans to Regulate Crypto Industry

U.S. Democratic presidential candidate Andrew Yang thinks cryptocurrencies experience fraud due to lack of regulations and plans to tackle the issue.

Democratic 2020 presidential candidate Andrew Yang has outlined how he plans to regulate the cryptocurrency industry.

Promise to promote legislation on cryptocurrencies

On Nov. 14, Yang, an entrepreneur, lawyer, philanthropist and a Democratic candidate in the 2020 United States presidential election, wrote in a Nov. 14 blog post on the tech industry that cryptocurrencies experience the levels of fraud that they do because of lack of adequate regulations. He said:

“Other countries, which are ahead of us on regulation, are leading in this new marketplace and dictating the rules that we’ll need to follow once we catch up.”

Existing market for crypto, existing problems in big tech

Yang explained that cryptocurrencies and digital assets already compose a great deal of economic activity. The governmental response has lagged. “A national framework for regulating these assets has failed to emerge, with several federal agencies claiming conflicting jurisdictions,” he said.

In his broader plan to regulate the tech industry and protect U.S. citizens from big tech companies “that are prioritizing profits over our well-being,” Yang promises to promote legislation on the crypto asset market space by defining what a token is, when a token is a security, and clarify the tax implications of owning, selling, and trading digital assets, among others.

Taking a stab at Congress for lack of basic knowledge of technology

Yang further pointed out that in order to effectively regulate innovative technologies like blockchain and cryptocurrencies, the U.S. government first needs to understand it.

Yang is referring to the Financial Services Committee, who questioned Facebook CEO Mark Zuckerberg for over six hours about the Libra Association and its planned Libra token. Yang said:

“It’s embarrassing to see the ignorance some members of Congress display when talking about technology, and anyone who watched Congress question Mark Zuckerberg is well aware of this. Without a base level of understanding, it’s unreasonable to expect proper regulation of major tech companies, or the drafting of legislation that addresses the critical technological issues that we’ll continue to face in artificial intelligence and cybersecurity.”

In August, Yang said that he plans implement blockchain-based mobile voting if he wins the 2020 United States presidential election, believing that American citizens should have the option of voting on a mobile device — with blockchain technology used for verification purposes.

IRS Criminal Investigators Looking Into Bitcoin ATMs and Kiosks

IRS Criminal Investigators Looking Into Bitcoin ATMs and Kiosks

Internal Revenue Service Criminal Investigation Chief John Fort said that the regulator is looking into potential tax issues caused by Bitcoin ATMs and kiosks.

United States Internal Revenue Service (IRS) Criminal Investigation Chief John Fort said that the regulator is looking into potential tax issues caused by Bitcoin (BTC) ATMs and kiosks.

According to Bloomberg Law on Nov. 15, Fort said that the IRS is collaborating with law enforcement to investigate illicit uses of new technologies like cryptocurrencies, stating:

“We’re looking at those, and the ones that may or may not be connected to bank accounts […] In other words, if you can walk in, put cash in and get bitcoin out, obviously we’re interested potentially in the person using the kiosk and what the source of the funds is, but also in the operators of the kiosks.”

A widespread service

According to Coin ATM Radar, there are 4,129 Bitcoin ATMs and tellers in the United States that enable users to buy and/or sell cryptocurrencies in exchange for a fee. Bloomberg claims that there is one such machine in every major U.S. city. Fort explained that such services are required to conform to Know Your Customer rules:

“They’re required to abide by the same know-your-customer, anti-money laundering regulations, and we believe some have varying levels of adherence to those regulations.”

As Cointelegraph reported a month ago, Bitcoin ATM firm Bitstop installed one of its machines at the Miami International Airport, suggesting that Bitcoin is useful to move money when traveling.

Tax status remains murky

Fort explained that cryptocurrency taxation issues are an emerging threat, adding that the cryptocurrency space has an inherent lack of transparency and visibility, which increases its potential for non-compliance. Still, he admits that no cases have been filed so far, stating, “We haven’t had any public cases filed, but we do have open cases in inventory.”

Earlier this week, Suzanne Sinno, an attorney in the IRS Office of the Associate Chief Counsel, clarified that cryptocurrencies have never been eligible for like-kind tax exemption, even before the 2017 tax overhaul.

In the U.S., a like-kind exchange — or a 1031 exchange — is an asset transaction that does not generate a tax liability from the sale of an asset when it was sold to acquire a replacement asset.

While crypto traders were mostly aware that post-overhaul transactions do not qualify for such an exemption, transaction eligibility prior to that period had been murky.

ConsenSys CSO Seeks to Raise $50M for New Blockchain Investment Fund

ConsenSys CSO Seeks to Raise $50M for New Blockchain Investment Fund

ConsenSys CSO Sam Cassatt is launching a new blockchain-oriented investment firm, Aligned Capital.

An executive at the Ethereum blockchain firm ConsenSys is launching a new blockchain-oriented investment firm, Aligned Capital. Sam Cassatt, the chief strategy officer (CSO) at ConsenSys, announced that the firm will be seeking to raise $50 million for its first fund in an announcement on Nov. 15.

Cassatt, who has been at the firm for five years, will continue to serve as an advisor to ConsenSys while working full-time as a founding managing partner at Aligned Capital.

Apart from blockchain, Aligned Capital will invest in safe AI and innovative healthcare

According to the announcement, Aligned Capital will be investing in three major areas including blockchain and crypto, safe artificial intelligence and innovative healthcare. Cassatt says that he is planning to use ConsenSys software and collaborate with the startup incubator.

Aligned Capital’s initial backers include some high-profile figures in the crypto industry such as ConsenSys founder and Ethereum co-founder Joseph Lubin, who will also serve as an advisor to the firm. Andrew Keys, an early ConsenSys exec and managing partner at DARMA Capital, is also on the list of the backers.

Meanwhile, other advisors include Stanford lecturer and Transformative Tech Lab co-founder Nichol Bradford and Long Now Foundation director of development Nicholas Paul Brysiewicz. Seth Goldstein, serial entrepreneur and angel investor, will join as a venture partner.

Investment in blockchain technology sees stable growth

Sam Cassatt’s new blockchain-focused fund is further proof of the overall steady growth of investment in blockchain technology. According to a study by identity management firm Okta, as much as 61% of high-profile digital companies worldwide are investing in blockchain. 

In June 2019, billionaire investor Henry Kravis reportedly made his first crypto investment in blockchain-focused investment firm ParaFi Capital.

According to research data platform Research and Markets, blockchain spending in the United States will increase from $3.12 billion to $41 billion by 2025.

FinCEN Chief: US Will Strictly Enforce Anti-Money Laundering In Crypto

FinCEN Chief: US Will Strictly Enforce Anti-Money Laundering In Crypto

FinCEN Director Kenneth Blanco said that Anti-Money Laundering laws will be strictly enforced in the world of crypto.

The United States Financial Crimes Enforcement Network (FinCEN) Director Kenneth Blanco said that Anti-Money Laundering (AML) laws will be strictly enforced in the world of cryptocurrencies.

On Nov. 15, Reuters reported that Blanco made it crystal clear that cryptocurrency companies engaged in money service businesses will have to comply with AML laws and share information about their customers.

Travel rule also applies to crypto

Speaking at a conference hosted by Chainalysis, a New York-based blockchain analysis company, Blanco told the audience that the so-called travel rule also applied to digital currencies and that the government expects crypto firms to comply. He said:

“It [travel rule] applies to CVCs [convertible virtual currencies] and we expect that you will comply, period. […] That’s what our expectation is. You will comply. I don’t know what the shock is. This is nothing new.”

In what has now become known as the travel rule, the Financial Action Task Force (FATF) guidelines require regulators and Virtual Asset Service Providers (VASPs) to collect and share personal data of transactions. The recommendation imposes the same standards on the cryptocurrency sector as are normally shouldered by the banking industry.

Blanco further pointed out that FinCEN has been conducting investigations that include compliance with the travel rule since 2014, adding that it is the most commonly cited violation among money service businesses engaged in digital currencies.

Anti-Money Laundering laws apply to everyone

In October, Blanco spoke at the University of Georgetown where he said that AML laws apply to everyone. Blanco pointed to the key objective of AML policy, which is obtaining information about who is involved in a given payment, saying:

“There is a reason you want to know … the person on the other side of that transaction — they might be dealing in some kind of illicit activity. Whether it’s opioids … or human smuggling on the other side … you want to know who that person is.”

Blanco told the audience at the time that it is not that hard to obtain that information. “All we’re asking for is name, address, account number, transaction, recipient, and amount,” he said, adding:

“So when you tell me you don’t know who’s on the other side, you’ve got a big problem. Because you are required to know, and that is what our expectation is going to be.”

Crypto IPO Season: Race to Secure an Offering Heats Up

Crypto IPO Season: Race to Secure an Offering Heats Up

With the crypto winter now in the past, the industry’s titans are rushing to get their IPOs underway.

The buildup to the 2017 peak in cryptocurrency prices intoxicated business owners and investors around the world. The momentum was so great that new businesses popped up every second of the day, all hoping to cash in on the first great crypto gold rush.

As 2018 rolled round, the long crypto winter soon froze out the hopes of many. Although the long trough proved too much for some, when prices rose again, the landscape looked very different. Initial coin offerings had largely been declared irrelevant and stablecoins from massive international companies gradually came to dominate a once-diverse industry.

As 2019 staggers into its final stages, crypto prices are volatile but a marked improvement over 2018. With Bitcoin surging over $10,000 on several occasions, the global climate for cryptocurrency projects is improving. China is softening its hardline stance on cryptocurrency and mining, while Blockstack carried out the first token sale approved by the United States Securities and Exchange Commission.

As the industry regains momentum, companies are once again starting to build enough confidence to aim for public listings on stock exchanges around the world. Cointelegraph looks at some upcoming initial public offerings.

SoftBank’s next bet sets its sights on the Nasdaq

SoftBank is a name synonymous with investment. Unfortunately for the Tokyo-headquartered holding company, two of its most famous investments have been far from successful. Most recently, SoftBank had to dish out a rescue package to the property company WeWork after its disastrous IPO bid fell apart. The company’s other investment, Uber, has seen a 40% drop in share price since the ride-hailing app went public in May of this year.

Nonetheless, another of SoftBank’s investments is gearing up to go public in the U.S. The blockchain and AI fintech arm of the Chinese insurance titan Ping An, OneConnect, filed for a $100 million IPO with the U.S. SEC. The firm is aiming to list on either the Nasdaq Global Market or New York Stock Exchange if its application is approved.

Like many other Chinese crypto-related companies, OneConnect has previously considered a listing on the Stock Exchange of Hong Kong, with one source claiming that the firm sought to raise up to $1 billion.

Regulators have been known to take umbrage with poor financial results from applying companies. OneConnect’s IPO filing to the SEC reveals that the company reported at net loss of $147 million on a revenue of $218 million as of Sept. 30, which places doubt on the success of the filing.

Silvergate takes gold

Silvergate Bank has long been a favorite for crypto enthusiasts. The bank, which went public on the New York Stock Exchange on Nov. 7, is famous for its pro-crypto stance. The public listing marks a milestone on the road toward greater integration between cryptocurrency and wider mainstream finance.

Related: What Are Crypto Banks and How Do They Work?

The bank is notable for its Silvergate Exchange Network, or SEN, a system of crypto exchanges and investors that facilitates the transactions of U.S. dollars between members, 24 hours a day, 365 days a year. The network had a high-profile boost after the Winklevoss-founded crypto exchange Gemini joined in August 2019.

According to a filing made by Silvergate to the SEC, the SEN registered $10.5 billion in transfers for the three months ending on Sept. 30. Total transfers under the purview of the SEC in the same period reached $23.1 billion, with total fiat transfers including wires coming in reported to be at $41.5 billion. The 2019 volumes represent a significant improvement on the figures from a year ago, amounting to $4.4 billion transfers in U.S. dollars in 2018.

The company announced that it would price its IPO consisting of 3,333,333 shares of its Class A common stock at $12.00 per share on Nov. 6. Since the second quarter of 2019, the company reported an increase in crypto-related clients, from 655 as at June 30 to 756 on Sept. 30. Live trading began on Nov. 7 at $12.75, jumping 6.2% over its IPO price of $12.

Mining giants look to hit new seam of investors

While the “Big Four” of tech may now take up most of the headlines in crypto news, before the crypto winter, the same role largely taken up by mining companies. In particular, a position occupied in the tussle between the two titans of mining, Bitmain and Canaan Creative.

The two companies played a central role in transforming the industry from a niche hobby for crypto enthusiasts to a multibillion dollar one. The IPOs of the two mining companies not only represents an important opportunity to assess the democracy that so many commentators in the crypto world believe is inherent to the technology, but also a litmus test for the industry as a whole.

Related: Regulatory Overview of Crypto Mining in Different Countries

It’s not surprising that mining companies are looking to go public now. With both Canaan and Bitmain based primarily in China, the government crackdown on both crypto and mining, and with the vertiginous plunge in prices proving to be a highly damaging combination.

However, with the thaw of both the crypto winter and the Chinese government’s frosty approach to crypto-related business, it appears the two companies want to strike while the iron is still red hot.

Ramak J. Sedigh, CEO of Plouton Mining, told Cointelegraph that while both mining giants will have to make some fundamental changes in order to meet industry standards, a successful listing would be a huge step forward for cryptocurrency as a whole:

“Bitmain and Canaan will need to make deep adjustments to their corporate culture. Neither firm is known for its transparency or post-industrial style corporate governance. Regardless, the industry is watching and cheering for them to succeed.”

Canaan needs to get creative to convince regulators about its results

Although it has long-played second fiddle to Bitmain in terms of its market share, Canaan Creative appears to be leading the charge for a public listing. Despite some shaky financial results, the company initially announced that it would aim to raise $400 million, according to an IPO filed with the SEC on Oct. 28. However, prominent Crypto Twitter commentator and founding partner of Primitive Crypto, Dovey Wan, tweeted that Canaan updated its IPO file, slashing the expected fundraising total to $100 million.

As previously reported by Cointelegraph, the firm reportedly filed a $200 million IPO request with regulators in July. While Canaan might well be the first to go public, it has some skeletons in its closet that could spook investors. Perhaps the most noteworthy is that this will be the third IPO attempt for the mining firm.

Canaan was an early, albeit unsuccessful, adopter of a tactic now seeing increased usage among crypto-related companies: The reverse IPO. Regulators are often rightly suspicious of cryptocurrency companies, and buying already listed companies is seen as a way of sidestepping the fanfare of a direct public offering.

Only last year, Canaan went for a second IPO attempt. This time, the company targeted the Hong Kong stock exchange. Despite the hype that surrounded the announcement, regulators were less than impressed with Canaan’s business model, and the listing was ultimately unsuccessful.

The date for Canaan’s IPO is unspecified, but as time rolls on toward the firm’s third attempt, all eyes are on the company’s results. Having been the primary reason for the previous failures, the company has been more transparent in giving an accurate portrayal of its finances. In its amendment submitted to the SEC as part of the IPO registration process, Canaan reported a net profit of $13 million for the third quarter this year.

The company’s 2019 revenue for the first three quarters of the year was just over $134 million, but a slow start to the financial year resulted in a net loss of around $31 million. The company will have its work cut out to convince both regulators and investors alike, considering its 2018 full year net profits amounted to just over $17 million.

Bitmain charges toward IPO despite division

Bitmain has long cast a shadow over the cryptocurrency industry. Its 75% market share of BTC mining gives it enormous influence over both the market and technological innovation.

Regardless of its gargantuan size, Bitmain has struggled financially since the crypto winter and even at the start of this year. Many once-promising companies have boasted huge valuations prior to going public. Bitmain is one of them, announcing a valuation of several billion prior to its failed 2018 IPO on the Hong Kong stock exchange. Regulators were rightly cautious about the company’s secretive financials and the Hong Kong IPO application was allowed to expire.

Nonetheless, the firm discreetly filed an IPO application with the SEC in June. According to a Bloomberg report, the amount raised could be between $300 million to $500 million. The IPO bid comes at a fragile time for the company, with co-founder Micree Zhan ousted from the company in a brutal coup led by co-founder Jihan Wu, allegedly without stakeholder consent.

Related: Bitmain’s New IPO Attempt in Jeopardy as In-Fighting Goes Public

Although the climate for crypto-related companies in China is improving, Bitmain will still have to answer some uncomfortable questions about its profitability, with Wu admitting to employees in a company-wide email that times had been hard for the company since the crypto winter of 2018.

INX

Silvergate, Bitmain and Canaan are all established names in cryptocurrency and beyond. But IPOs are not confined to the industry’s titans. Gibraltar-registered blockchain and institutional crypto trading startup INX Limited announced that it is aiming to raise between $5 million and $130 million, according to its document filed with the SEC.

In the last two years, ICOs have earned themselves a poor reputation, with an estimated 80% of ICOs in 2018 alone being reported as fraudulent. As tales of fraud and exit scams have abounded, so have the respective crackdowns from the regulatory bodies across the globe.

Registering with the SEC, an authority seen across the world as the benchmark for regulatory approval, signals a desire from INX to distance itself from the mass of unregistered ICOs abounding online.

In an apparent bid to further reassure investors, INX wrote in the filing that it will not complete the sale of any of its native INX tokens until it raises gross offerings of $5 million within one year. The firm is also planning to establish a security token, along with two trading platforms managed by wholly owned subsidiaries.

US Federal Judge Rules in Favor Bitcoin IRA in Case Against Kingdom Trust

US Federal Judge Rules in Favor Bitcoin IRA in Case Against Kingdom Trust

A federal judge has ordered Kingdom Trust to return customer data access to info on Bitcoin IRA’s website after the custodian broke a referral agreement.

A United States federal judge has ordered asset custodian Kingdom Trust to fully restore data access to all affected clients following the unilateral termination of customers’ access to their own account information on Bitcoin IRA’s website.

Filed on Nov. 12, a court document reveals that South Dakota District Court Federal Judge Karen E. Schreier ruled in favor of Bitcoin IRA in the case against Kingdom Trust, where the latter allegedly breached a referral agreement by terminating customers’ access to their account data on Bitcoin IRA’s platform without providing prior notice.

The breach of the referral agreement

As described in the document, in September 2018, Bitcoin IRA and Kingdom Trust entered into a referral agreement, which indicated that Bitcoin IRA would refer its customers to use Kingdom Trust as a trust custodian. In return, Kingdom Trust agreed to pay Bitcoin IRA a referral fee for account owners who became Kingdom Trust customers.

However, in August of 2019, Kingdom Trust unilaterally removed Bitcoin IRA’s application programming interface (API) access and stopped providing daily updated account information. This eventually led to inaccurate reflections of information about assets held in clients’ accounts.

The ruling

Schreier said in the ruling that “Kingdom Trust unilaterally terminated customers’ access to their own account data on Bitcoin IRA’s website, and it has not shown that the interference is justified.” Following the order release, Kingdom Trust must:

“Fully restore to the condition and functionality existing prior to August 21, 2019, Alternative IRA Services LLC’s (Bitcoin IRA) access to account holder data of the accounts to which Bitcoin IRA is the account designated representative by the account holder, and account holder access to Bitcoin IRA’s online platform, thereby allowing the account holders to once again self-direct their retirement accounts online 24 hours a day, 7 days a week.”

Expansion of crypto retirement savings offerings

As cryptocurrencies become more widely adopted, holders are increasingly including digital assets in their retirement plans and savings accounts.

On Nov. 13, Kingdom Trust along with major American crypto exchange Coinbase and alternative assets investment firm Regal Assets began offering cryptocurrency-based individual retirement and 401(K) accounts in the United States

The new offering will purportedly give investors access to over 30 assets directly through Coinbase, with insurance protection provided by Lloyd’s of London.

As reported last month, Bitcoin IRA partnered with digital asset lending firm Genesis Capital to offer investors the opportunity to earn interest on crypto and cash holdings. Bitcoin IRA has reportedly provided digital asset IRAs since 2016 and processed over $350 million in investments, onboarding 4,000 clients.

WSJ: Three ICOs Missed US SEC Repayment Deadline, Broke the Deal

WSJ: Three ICOs Missed US SEC Repayment Deadline, Broke the Deal

Three firms that collectively raised about $40 million through unregulated ICOs in 2017 missed the deadlines set forward in their settlements with the SEC.

Several firms that collectively raised about $40 million through unregulated initial coin offerings (ICOs) in 2017 missed their deadlines to repay investors following charges by the United States Securities and Exchange Commission (SEC).

The Wall Street Journal reported on Nov. 14 that the firms agreed to repay investors or provide more transparency in exchange for lower fines, but did not follow through.

The tardy firms

Airfox and Paragon Coin missed the original deadline to repay investors who bought their tokens, which was set for Oct. 16. A third startup is over five months late on providing its investors the information they need to decide whether they want refunds.

Two of the three companies are mobile banking startup Airfox and cannabis blockchain platform Paragon Coin, which agreed to pay $250,000 fines as part of a settlement in November last year. In exchange, the firms have not been accused of fraud and had to bring their offering under SEC oversight and offer a refund to investors. Co-director of SEC enforcement Steve Peikin said:

“These orders provide a model for companies that have issued tokens in ICOs and seek to comply with the federal securities laws.”

The third company, cybersecurity startup Gladius, did not pay a penalty to the SEC after it settled, as the regulator gave it credit for self-reporting its violations. The three companies were all required to submit registration statements.

Both Airfox and Paragon filed the forms, but Paragon failed to answer a letter from the SEC inquiring about its accounting and shareholder rights. The company also did not issue any quarterly updates for its investors since registering its tokens with the SEC in March.

Gladius, on the other hand, was required by the terms of its settlement to file the registration statement by May 20, but claims that the deadline was extended until Nov. 18.

The other two companies also reportedly missed the deadline to repay investors seeking refunds, which was set for Oct 16. Airfox claims its deadline has been extended until Dec. 28. The company noted in a statement:

“Airfox has complied with all applicable deadlines, some of which were extended.”

Paragon’s website says that investors who desire a refund should submit their claims by Nov. 21, but their settlement order set a deadline in July. SEC documents show that both the companies may be lacking the funds to repay the investors, given that Airfox owes $15.4 million to its ICO participants and has $6.1 million in assets, including $5.4 in cash. Paragon’s current disclosed assets, on the other hand, are $95,659, while its liabilities are $14.9 million.

An inappropriate solution?

Former SEC enforcement lawyer Michael S. Dicke raised concern that such settlements are ineffective solutions:

“I looked at it then and look at it now as impractical, because for many projects they spent the money in accordance with what they told purchasers they would spend the money on—to build out the project. […] This kind of remedy really only works well when the issuer can pay back.”

In 2019, the SEC suspended securities trading of 271 issuers, obtained 31 court-ordered asset freezes and collected more than $4.3 billion in disgorgement and penalties. As Cointelegraph reported yesterday, Nov. 13, encrypted messaging service Telegram asked the New York Southern District Court to throw out accusations by United States regulators that its in-house cryptocurrency is a security.

Two US Men Arrested For Stealing Social Media Accounts and Crypto via SIM Swapping

Two US Men Arrested For Stealing Social Media Accounts and Crypto via SIM Swapping

U.S. Department of Justice arrested two Massachusetts men for allegedly taking over victims’ social media accounts and stealing their cryptocurrency via SIM swapping.

The United States Department of Justice has arrested and charged two Massachusetts men for allegedly taking over victims’ social media accounts and stealing cryptocurrency.

According to the announcement on Nov. 14, the two — Eric Meiggs and Declan Harrington — were charged with one count of conspiracy, eight counts of wire fraud, one count of computer fraud and abuse and one count of aggravated identity theft. 

Attempt to steal over $550,000 in crypto

The Massachusetts residents were allegedly targeting executives of cryptocurrency companies thought to own significant amounts of cryptocurrency and have high-value social media accounts.

Meiggs and Harrington allegedly used the illegal practice known as SIM swapping to take control of the victims’ online social media accounts in order to gain access to sensitive information and in some cases steal cryptocurrencies. 

SIM swapping is the process of scamming a telecom provider into transferring the victim’s phone number to a SIM card held by the attacker. These SIM cards can be bought on eBay and plugged into a burner phone. Once the phone number is transferred, the hacker can reset passwords for valuable and private services like cryptocurrency wallets and email accounts. 

Samy Tarazi, a sergeant at the Santa Clara County Sheriff’s office commented on the phenomena in October:

“We’re talking about kids aged mainly between 19 and 22 being able to steal millions of dollars in cryptocurrencies […] we’re now dealing with someone who buys a 99 cent SIM card off eBay, plugs it into a cheap burner phone, makes a call and steals millions of dollars. That’s pretty remarkable.”

According to the indictment, the U.S. men targeted at least 10 victims throughout the country and allegedly stole, or attempted to steal, over $550,000 in cryptocurrency from these victims alone.  

New York resident indicted for crypto scam

At the beginning of November, the Office of United States Immigration and Customs Enforcement’s Homeland Security Investigations and prosecutors for the Southern District of New York indicted a man for allegedly participating in a cryptocurrency scheme dubbed Igobit. He allegedly spent his clients’ funds on personal expenses, such as dinners at Manhattan restaurants, airline tickets and online shopping.

OneCoin Co-Founder Pleads Guilty, Faces up to 90 Years in Jail

OneCoin Co-Founder Pleads Guilty, Faces up to 90 Years in Jail

Ignatov signed a plea on Oct. 4 and faces up to 90 years in prison for money laundering and fraud charges.

Konstantin Ignatov, co-founder of alleged crypto scam OneCoin, has pleaded guilty to participation in the multi-billion dollar fraud. According to a BBC report on Nov. 14, Ignatov signed a plea on Oct. 4 and now faces up to 90 years in prison. The news was made public on Nov. 12, the BBC says.

After being arrested at Los Angeles International Airport in March 2019, Ignatov pleaded guilty to several charges, including money laundering and fraud. While facing up to 90 years behind bars, he has yet to be sentenced and will reportedly not face further criminal charges for his role in OneCoin, except potential tax violations.

OneCoin raised $4.4 billion in Ponzi scheme

As previously reported, OneCoin is known as a major crypto exit scam alongside famous crypto scam BitConnect.

Founded in 2014, the Bulgaria-based firm remains fully operational to date despite investigators’ allegations that it raised 4 billion euro ($4.4 billion) in a Ponzi scheme, according to the BBC.

Ignatov speaks against his sister and OneCoin co-founder Ruja Ignatova

Additionally, Ignatov has reportedly provided more details against his sister and OneCoin co-founder Ruja Ignatova, also known as “cryptoqueen.” While testifying in the trial against Mark Scott, who allegedly helped launder nearly $400 million via OneCoin, Ignatov told the court that his sister obtained a passport and tickets to Austria and Greece from her home in Bulgaria.

Ignatov said that Ignatova regarded OneCoin’s critics as “haters,” and was afraid that somebody close to her was going to give her up to the FBI. Ignatov also said that he had hired a private investigator to find Ignatova, adding that he had not spoken to her since she disappeared.

Finding Ignatova

As reported by Cointelegraph, Ignatov testified on Nov. 6 that after his sister fled, security personnel who accompanied her told him that she had met with Russian speakers. Matthew Russell Lee, founder of investigative journalism-oriented publication Inner City Press, said that Ignatov’s sister informed him that she had the support and protection of an unnamed “rich and powerful” Russian citizen.

Dallas Mavericks CTO: Crypto Payment Option Still ‘A Cottage Industry’

Dallas Mavericks CTO: Crypto Payment Option Still ‘A Cottage Industry’

The CTO of the Dallas Mavericks said that the pro basketball team’s cryptocurrency payment option is not yet widely used by its fanbase.

The Dallas Mavericks pro basketball team’s cryptocurrency payment option has not yet caught on with the majority of fans, the team’s chief technical officer said in a recent interview. 

As sports business-focused media outlet Front Office Sports reported on Nov. 14, Mavericks CTO David Herr said that the team wants to provide its fans with a more flexible way to purchase tickets and merchandise, thus enabling them to pay with cryptocurrencies. However, Herr pointed out that the demand for such an option is still very low, saying:

“[Users] are pretty low, I don’t want to say infancy, but it’s a select group of people using it […] We did some research, heard some discussions and conversations and one comment was it’s still complicated to 99% of the population. Until it’s more widely accepted, it’s a cottage industry or a neat way to pay.”

As previously reported, the Mavericks became the second NBA team to accept Bitcoin (BTC) as a means of payment for match tickets and merchandise in mid-August. The team uses cryptocurrency payment processor BitPay to process their fans’ Bitcoin payments.

Herr said that the novelty of paying in cryptocurrency was part of the decision to introduce the payment option, stating, “We want to provide cool things for the fans and crypto was in response to some requests we’ve had.”

Sports adopting crypto and blockchain

Professional sports teams in various leagues and sports across the world have begun to dabble in blockchain and cryptocurrencies. In mid-October, the Sacramento Kings — the first NBA basketball team to adopt cryptocurrencies — partnered with creator of Ethereum-based Kaiju toys, CryptoKaiju, to launch crypto-collectibles. The collaboration followed the news that the team was launching a blockchain-powered rewards program within its gaming app Call the Shot.

In Germany, FC Bayern Munich became the latest football club to announce blockchain-based merchandise for fans, following a partnership with Stryking Entertainment to produce digital collectibles of its players.

Coinbase, Kingdom Trust, Regal Assets Jointly Offer Crypto IRA and 401(K) Accounts

Coinbase, Kingdom Trust, Regal Assets Jointly Offer Crypto IRA and 401(K) Accounts

Crypto exchange Coinbase, custodian Kingdom Trust and investment firm Regal Assets have jointly begun offering crypto IRA and 401(K) accounts in the United States.

Major American crypto exchange Coinbase, asset custodian Kingdom Trust and alternative assets investment firm Regal Assets have begun offering cryptocurrency-based individual retirement and 401(K) accounts in the United States.

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

In a Nov. 13 press release, the firms said that the new offering will give investors access to more than 30 digital currencies in the industry directly through Coinbase, with insurance protection provided by British insurance firm Lloyd’s of London. The parties released their Bitcoin (BTC) IRA with $200 million in insurance protection.

Tyler Gallagher, CEO of Regal Assets, said that clients “make all the decisions themselves when it comes to digital asset selections and allocation, but do have the option of guidance by connecting with their dedicated account manager.” 

Currently, the product supports major coins such as BTC, Ether (ETH), Litecoin (LTC), XRP, Stellar (XLM), EOS, and Tezos (XTZ), among others.

Adoption of crypto in retirement savings plans

Last month, Los Angeles-based Bitcoin IRA partnered with digital asset lending firm Genesis Capital to offer investors the opportunity to earn interest on cryptocurrency and cash holdings. Bitcoin IRA has reportedly provided digital asset IRAs since 2016 and processed over $350 million in investments, onboarding 4,000 clients.

In a study by investment platform eToro earlier this year, 45% of respondents expressed interest in allocating cryptocurrency in their 401(K) retirement savings plans, and 74% of digital currency traders would like to receive that option from their 401(K) plan providers.

IRS: Like-Kind Tax Exemption Has Never Applied to Crypto Transactions

IRS: Like-Kind Tax Exemption Has Never Applied to Crypto Transactions

The like-kind exchange tax exemption has never been applicable to crypto, an IRS official said.

The like-kind exchange tax exemption is not applicable to cryptocurrency transactions, according to the United States Internal Revenue Service (IRS). 

An official at the IRS Office said that U.S. taxpayers have never been authorized to postpone paying tax as part of the like-kind exchange principle even before the 2017 tax overhaul, Bloomberg Tax reports Nov. 13.

Suzanne Sinno, an attorney in the IRS Office of the Associate Chief Counsel, delivered her remarks on U.S. crypto taxation at the American Institute of CPAs conference this Wednesday in Washington. According to the report, Sinno worked on recent IRS cryptocurrency guidance that was issued in October.

Like-kind exchange exemption can defer tax payments on the gain of a sale

Under U.S. tax law, a like-kind exchange, also known as a 1031 exchange, is an asset transaction that does not generate a tax liability from the sale of an asset when it was sold to acquire a replacement asset. 

While it was clear that taxpayers could not claim crypto-to-crypto sales as like-kind after 2018, the rules governing transactions previous to the 2017 overhaul were unclear.

Based on the new announcement by Sinno, U.S. taxpayers have never been authorized to apply the like-kind exchange principle to crypto-to-crypto trades in order to postpone paying tax on the gain of a sale.

Promotional airdrops are still tax-free, for now

The news comes after the IRS issued guidelines for tax reporting regarding cryptocurrency airdrops and hard forks on Oct. 9. The new rules say that those who receive new currency in a hard fork need to report the assets to the IRS as gross income. While the IRS distinguishes hard forks from airdrops, the agency has reportedly not yet decided whether promotional airdrops should be treated as taxable.

Softbank-Backed Blockchain Firm OneConnect Eyes $100M Nasdaq IPO

Softbank-Backed Blockchain Firm OneConnect Eyes $100M Nasdaq IPO

Softbank-backed Chinese fintech OneConnect has filed for an Initial Public Offering with the United States Securities and Exchange Commission.

Softbank-backed Chinese fintech OneConnect has filed for an Initial Public Offering (IPO) with the United States Securities and Exchange Commission (SEC).

As Bloomberg reported on Nov. 13, OneConnect is the blockchain- and AI-focused fintech arm of Chinese insurance giant Ping An.

Seeks $100 million and Nasdaq listing

The report claims that the filing seeks to raise $100 million, eyeing listing on the Nasdaq Global Market or New York Stock Exchange, if approved. 

Morgan Stanley, Goldman Sachs, JPMorgan Chase and Ping An Securities Group Holdings are leading the offering.

OneConnect had previously sought a Hong Kong IPO with a target of raising $1 billion at a valuation of $8 billion, as reported by Bloomberg in February.

According to data from Crunchbase, OneConnect has to date raised $650 million in Series A Early Stage Venture funding, at a pre-money valuation of $6.8 billion.

According to earlier reports, OneConnect had provided services to over 200 banks, 200,000 enterprises and 500 banks as of September this year.

The company launched its blockchain platform in 2018, with solutions focused on finance, real estate, automobile, medical treatment and smart city infrastructure.

OneConnect claims its blockchain technology can handle up to 50,000 transactions per second with a latency of less than 0.5 seconds and also implements zero-knowledge proof technology.

OneConnect’s technology has been used to develop the major blockchain-based trade finance platform eTradeConnect in partnership with the Hong Kong Monetary Authority. 

According to Bloomberg, OneConnect’s IPO filing reveals a reported net loss of $147 million on revenue of $218 million during the nine months ended Sept. 30, as compared with an $82 million net loss on revenue of $128 million for the same period last year

The IPO scramble

As reported yesterday, Chinese Bitcoin (BTC) mining giant Canaan Creative has just announced the terms for its U.S. IPO, with plans to raise $100 million by offering 10 million American depositary shares at a price range from $9 to $11. 

This would prospectively put the company’s overall market value at some $1.6 billion, with an enterprise value of $1.4 billion.

Mining titan Bitmain, which enjoys a 75% market share of the crypto hardware market worldwide, had — like Canaan and OneConnect — initially tried to complete an IPO in Hong Kong, but met with failure. It has now also launched a bid to go public in the U.S.

Canaan Creative Sets Terms, Plans to Rake in $100 Million in Upcoming US IPO

Canaan Creative Sets Terms, Plans to Rake in $100 Million in Upcoming US IPO

Chinese cryptocurrency mining giant Canaan Creative aims to raise $100 million in its United States initial public offering planned for this month.

Chinese cryptocurrency mining giant Canaan Creative has announced terms for its United States initial public offering (IPO) planned for later this month.

On Nov. 13, Renaissance Capital reported that Bitcoin (BTC) mining giant Canaan Creative announced its plans to raise $100 million by offering 10 million American depositary shares (ADS) at a price range from $9 to $11. This would potentially put the company’s overall market value at some $1.6 billion, with an enterprise value of $1.4 billion.

An ADS is a U.S. dollar-denominated equity share of a foreign-based company available for purchase on an American stock exchange. 

First SEC filing for China-based mining firm

In October, Canaan Creative filed with the U.S. Securities and Exchange Commission (SEC) for an IPO intended to raise $400 million, with plans to be listed on the Nasdaq under the ticker CAN. If Canaan is successful, the mining company could become the first China-based mining firm to see public trading in the U.S. 

As part of its registration to conduct an IPO in the United States, Canaan revealed its Q3 net profit to be 94 million yuan ($13 million). Although the company generated revenue of just over $134 million in the first nine months of 2019, weaker performance early on has still resulted in a total comprehensive income loss of around $31 million.

One of three Chinese mining giants

Canaan, which is one of the three major Chinese crypto mining companies alongside Bitmain and Yibang International, previously attempted to launch an IPO in Hong Kong and China, but both attempts failed after regulators pored over their business model and financial outlook. Bitmain, which enjoys a 75% market share of the crypto hardware market worldwide, has likewise tried to complete an IPO, thus far meeting with failure

In October, Bitmain opened what it claimed to be the world’s largest facility for Bitcoin mining in Rockdale, Texas, which was completed thanks to a collaboration with the Rockdale Municipal Development District and Canadian technology firm DMG Blockchain Solutions.