New York AG Finds It ‘Perverse’ For Bitfinex and Tether to Criticize Investigation

New York AG Finds It ‘Perverse’ For Bitfinex and Tether to Criticize Investigation

New York Attorney General continues to push to investigate the alleged multimillion dollar coverup involving Bitfinex and Tether.

In a filing with the New York State Supreme Court’s Appellate Division, New York Attorney General Letitia James roundly criticized the efforts of Bitfinex and Tether to halt her office’s investigation into the companies. Bitfinex and Tether are under investigation for an accounting coverup in which Bitfinex is alleged to have improperly transferred $625 million that had been backing the Tether stablecoin in order to conceal Bitfinex’s liquidity shortfall.

In the filing from Dec. 4 but made public on Dec. 12, Attorney General James wrote that Bitfinex and Tether are attempting to stop the “ongoing investigation by the Office of the Attorney General into potential securities and commodities fraud.”

Lawyers for Bitfinex and Tether responded in a filing today, saying that the NYAG does not have authority to investigate the companies because “tethers are not securities or commodities.”

Nonetheless, Attorney General James’ filing pointed out that both companies have now failed twice to meet the “exceptionally high threshold” to terminate an NYAG investigation once it has been authorized. James did not mince her words when she said:

“It is particularly perverse for respondents to criticize the adequacy of [the Office of the Attorney General’s] potential legal claims when respondents are the ones who have refused to disclose documents and information that would be directly relevant to their liability.”

James argued that the Bitfinex and Tether are effectively attempting to dismiss an NYAG lawsuit when there is in fact not yet any such lawsuit — only an investigation, which may lead to a lawsuit in the future.

Bitfinex and Tether continue to evade court order?

James continued by saying that it has now been more than eight months since the court-issued order compelling the Bitfinex and Tether to produce documents relevant to the investigation.

However, according to James, Bitfinex and Tether continue to evade the court order and have not yet produced the core materials that would either establish or disprove their liability. James added:

“No principle of law or rule of procedure allows a subject of an investigation to refuse to comply with that investigation in the face of a lawful court order.”

To this, Bitfinex and Tether responded that they have already produced 70,000 pages of documents and that the Attorney General’s office is effectively grasping at straws to make its case. Their lawyers wrote:

“Given the extensive jurisdictional discovery, the real reason OAG cannot marshal enough evidence on jurisdiction is that the evidence does not exist.”

Bitfinex and Tether say crypto customers know the risks of investment

In their filing, lawyers for Bitfinex and Tether lawyers also made the provocative argument that, because the companies are private, they do not need to inform customers of risks to their deposits, despite claiming that Tether had been “fully backed” by reserves of US dollars. They wrote:

“Customers who choose to buy virtually currencies are obviously well-aware that, in doing so, they are not placing their money in FDIC-backed traditional bank accounts, or investing in public companies that issue quarterly SEC reports.”

An alleged coverup of hundreds of millions

The current legal battle began when Attorney General James alleged that Bitfinex, parent company iFinex and Tether Limited, and their associated entities violated New York law in connection with activities that may have defrauded New York-based crypto investors. The NYAG said that Bitfinex borrowed $850 million from Tether to cover a loss that it never disclosed to investors.

In October, the United States Attorney’s Office for the Southern District of New York indicted the principal of controversial Panama-based shadow payment processor Crypto Capital on three criminal counts. Crypto Capital had, in Bitfinex’s own words, “processed certain funds for and on behalf of Bitfinex for several years.” However, Bitfinex has argued it was itself a victim of fraud when Crypto Capital either refused to or was unable to make available $850 million of Bitfinex’s deposits.

Ripple-Based Remittance Firm SendFriend Claims to Save Up to 80% in Fees

Ripple-Based Remittance Firm SendFriend Claims to Save Up to 80% in Fees

Blockchain-based money transfer startup SendFriend utilizes Ripple’s technology to save up to 80% in remittance fees.

Blockchain-based money transfer startup SendFriend utilizes Ripple’s technology to save up to 80% in remittance fees, according to a blog post published on Dec. 12.

SendFriend uses Ripple’s xRapid product for cross-border payments, converting between the United States dollar, XRP and Philippine pesos and circumventing the longer process of traditional banking systems.

Philippines-focused remittance platform

SendFriend’s money transfer app aimed at reducing annual remittance fees for cross-border Filipino workers claims to lower such transaction costs by up to 75%. What makes it possible, according to the startup’s CEO, David Lighton, is RippleNet’s On-Demand Liquidity (ODL) technology.

With ODL, RippleNet’s users can utilize digital token XRP to bridge two currencies in three seconds. “We can now source liquidity, on-demand and depress those transaction costs by up to 75%,” said Lighton, and further added that the firm managed to reduce charge up to 2%.

Blockchain payment network enhancement

SendFriend joined the RippleNet payment network in January, along with other financial industry players such as JNFX, Transpaygo, FTCS and Euro Exim Bank. In February, SendFriend received $1.7 million in investments from Ripple, the Mastercard Foundation, MIT Media Lab and Barclays among others in a funding round. 

In late July, Chile-based peer-to-peer remittance company CurrencyBird also joined RippleNet. The partnership ostensibly allows CurrencyBird to add new routes to its more than 50 already existing destinations, new currencies, better prices and faster transfer speeds.

That same month, in a bid to drive greater financial inclusion, Philippines-based UnionBank launched a payments-focused stablecoin pegged to the Philippine peso.

QuadrigaCX Victims Request Proof of Gerald Cotten’s Death By Exhuming Body

QuadrigaCX Victims Request Proof of Gerald Cotten’s Death By Exhuming Body

Law firm Miller Thomson wants to exhume the body of Gerald Cotten, the deceased owner of now-defunct Canadian crypto exchange QuadrigaCX.

Canadian law firm Miller Thomson has made a request to the Royal Canadian Mounted Police (RCMP) to conduct an exhumation and post-mortem autopsy on the body of Gerald Cotten, the deceased owner of the now-defunct Canadian crypto exchange QuadrigaCX.

On Dec. 13, the Miller Thomson lawyers explained in a letter to the RCMP that the request to exhume and examine Cotten’s body was appropriate given the “questionable circumstances surrounding Mr. Cotten’s death and the significant losses” sustained by users of the cryptocurrency exchange.

Victims need clarity on whether Gerald Cotten is in fact deceased

The law firm further points to publicly available information about the debacle surrounding the Canadian crypto exchange, which, in the firm’s view, further highlights “the need for certainty around the question of whether Mr. Cotten is in fact deceased.”

Over the past year, the exchange has been engaged in a lengthy court case with the exchange’s creditors, some of whom have speculated wildly as to the fate of the lost cryptocurrency, and with some seemingly convinced that Cotton could have faked his own death.

Cotton reportedly died in India from a fatal disease in December 2018, taking with him the private keys and password to crypto wallets, resulting in users losing about $190 million.

Widow of Gerald Cotten hands over $9 million in assets to disgruntled users

In October, the widow of Gerald Cotten, Jennifer Robertson, handed over $9 million in assets to the users of the QuadrigaCX crypto exchange. Robertson announced in a personal statement, that she would be transferring the vast majority of estate assets to EY Canada, the Big Four audit firm that acted as the bankruptcy trustee of QuadrigaCX during its insolvency hearings. She said at the time:

“I have now entered into a voluntary settlement agreement where the vast majority of my assets and all of the Estate’s assets are being returned to QCX to benefit the Affected Users.”

Bitcoin Miner Canaan’s Shares Plunge 40% Since IPO in November

Bitcoin Miner Canaan’s Shares Plunge 40% Since IPO in November

Chinese Bitcoin mining giant Canaan Creative’s shares have seen a 40 percent drop in value since its initial public offering in November.

Chinese Bitcoin (BTC) mining giant Canaan Creative’s depositary shares have seen a 40 percent drop in value since November initial public offering (IPO).

Canaan was the first Bitcoin mining giant to go public on a major United States stock exchange, and successfully navigate an IPO. However, the mining giant’s stock has taken a severe beating since its IPO on Nov. 21. The company’s stock price value went as high as $13 per share on the day of the launch, only to take a painful nosedive to today’s value of $5.25, representing a 40% price crash.

After failing to secure an IPO in Hong Kong last year, Canaan looked to the United States, hoping to raise $400 million. However, the company was only able to raise $90 million, less than 25% of their planned amount.

Canaan endured a setback when it became clear that its biggest backer, Credit Suisse, decided to pull out a week before the IPO. According to people familiar with the matter, Credit Suisse was concerned whether the offering could secure sufficient orders.

Canaan’s competitor also files for IPO with SEC

Bitmain, Canaan’s largest competitor, quietly filed an application for an IPO with the U.S. Securities and Exchange Commission (SEC) at the end of October. 

Anonymous sources said at the time that the German multinational Deutsche Bank is sponsoring the application. Although no fund targets have been made public, reports previously forecasted that the amount could be between $300 million and $500 million.

With Canaan’s biggest competitor breathing down its neck, the possibility of Canaan losing its market position could soon become a reality. Especially now that Bitmain co-founder and tech billionaire Wu Jihan has resurfaced at the helm of the company while announcing new sales initiatives to attract new clients.a

Bitcoin Price Short-Term Indicators Hinting at $7.4K Weekend Bounce

Bitcoin Price Short-Term Indicators Hinting at $7.4K Weekend Bounce

Bitcoin price is attempting to rebound from this week’s slump as it heads into the weekend that might see a relief rally, but don’t bet the farm just yet.

The price of Bitcoin (BTC) has headed north over the last 24 hours, up over 1% at $7,272. As a result, each of the major cryptocurrencies has followed the market leader with the total cryptocurrency market cap reaching $198 billion and BTC dominance remaining steady at 67% of the total market. In other words, Bitcoin’s market cap now stands at $132 billion.

Cryptocurrency market daily view. Source: Coin360

Cryptocurrency market daily view. Source: Coin360

Weekly chart

 BTC USD Weekly chart. Source: TradingView

BTC USD Weekly chart. Source: TradingView

Despite a strong finish to the week, the price of Bitcoin is down 3.2% from the opening of $7,520 on Monday morning. The 50 and 100-week moving average (WMA) crossed this week, which is typically a sign of a market shifting to a more bullish trend. But as it stands, Bitcoin remains below the 100-WMA and has been unable to break through the previous support that has now turned into resistance at $7,600.

It is critical that the $7,600 level be reclaimed in order to be able to declare that there has been a fundamental shift in market structure that favors the bulls. Currently, trading volume remains in decline, showing a general lack of selling pressure in the downtrend and this may indicate a reversal could be pending.

The MACD is trending down below zero, which is another bearish signal but there is also an unconfirmed bullish divergence building on the histogram. This helps to identify that the downward momentum is in decline.

 Daily chart

BTC USD Daily chart. Source: TradingView

BTC USD Daily chart. Source: TradingView

The daily timeframe shows that Bitcoin price is still supported by the point of control at $7,200; the price where the most volume has traded in recent times. This is also the middle of the current trading range and also an important level to pay attention to as a loss of support here would open the door towards retesting the range lows in the mid $6,000s.

The moving average convergence divergence indicator, or MACD, is currently below zero but the signal and MACD line are trending to the upside and crossed bullish, which can explain the attempted bullish reversal today.

Each of the daily moving averages remains in decline following a “death cross” of the 50 and 200 moving averages a few weeks ago.

4-hour chart

BTC USD 4 hour chart. Source: TradingView

BTC USD 4 hour chart. Source: TradingView

The 4-hour chart clearly shows the price failing to make it to the top of the range earlier in the week and subsequently recording a lower high. This means that now there is some compression into the low $7,000s with $7,200 propping up the price.

The 4-hour MACD and RSI are both showing signs of a trend change to the upside, which implies that price may go higher over the weekend.

1-hour chart

BTC USD 1-hour chart. Source: TradingView

BTC USD 1-hour chart. Source: TradingView

The one hour chart shows that Bitcoin has formed a rounding bottom, which is in the process of attempting to break out to the upside.

This — combined with a bullish MACD above zero and a breakout in the RSI — would imply that there may be an attempt by the bulls to retest $7,400 over the weekend. Since weekend price action has a history of quickly reversing into the new week any weekend opportunity may be short-lived.

Market sentiment

BTC Futures USD 1weekchart. Source: TradingView

BTC Futures USD 1weekchart. Source: TradingView

The CME futures are currently trading with a small premium over spot prices whereas they’ve been trading with a discount in the week prior, implying that traders are generally neutral on the future price of Bitcoin versus today.

The commitment of traders report is a report issued by the Commodity Futures Trading Commission, or CFTC, which records the holdings of various market participants. As it stands, retail traders remain the most positive about the price of Bitcoin. Professional traders have moved from net long to net short and institutions remain short but there is a notable shift in their exposure to the downside.

Bitcoin Fear and Greed Index. Source: alternative.me

Bitcoin Fear and Greed Index. Source: alternative.me

The Bitcoin Fear and Greed Index meanwhile shows that the move down to the middle of the range at $7,000 has helped shift sentiment to an Extreme Fear score of 22.

Historically there has been a correlation between low sentiment scores and reversal in price, but typically these reversals are seen when the index score is below 20 as was seen for a sustained period between December 2018 and January 2019.

Looking forward

Overall, there as some signs that Bitcoin may be in the early stages of reversing the downtrend that looks to be losing momentum. The market is shaping up to look as though there may be a push to the bullish side over the weekend, but this is likely to be temporary as has been seen in the past.

Sentiment and positioning of retail investors going into the end of the year would suggest that despite there being fear in the market, participants have not been shaken out. A shakeout may still need to occur before the BTC/USD pair and the cryptocurrency market as a whole can finally make a more fundamental reversal.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

200K Users ‘Already in Line’ for Robinhood’s Fractional Stock Trading

200K Users ‘Already in Line’ for Robinhood’s Fractional Stock Trading

As Robinhood plans to allow its users to buy slices of shares at $1, over 200,000 users have expressed their intent to use the service.

More than 200,000 Robinhood clients have already expressed their intent to use its new fractional stock trading app announced yesterday.

Vladimir Tenev, co-founder at Robinhood, said that the clients were “already in line” for the app, considering the early signs as “really promising,” CNBC reports Dec. 13. After Robinhood’s user base recently crossed 10 million accounts, the firm is now valued at $7.6 billion and plans to expand its business to the United Kingdom, according to recent data.

Robinhood users can buy slices of Amazon shares and ETFs for just $1

Robinhood, a major California-based financial services firm that is known for its zero-fee crypto trading app, has announced its plans to launch fractional stock-trading on Dec. 12.

According to a report by Business Insider, Robinhood will start rolling out the service to certain customers on Dec. 16. The feature will also allow users to invest in portions of exchange-traded funds (ETFs), the report notes.

By launching the service, Robinhood apparently wants to attract first-time investors as the app will allow to buy slices of a share in popular companies such as Amazon — which trades at $1,765 per share at press time — for just as low as $1.

Tenev said:

“In particular, with this feature, we see customers’ eyes light up when they deposit $10 or $100 and the entire universe of stocks that they would like to invest in, or stocks that represent companies that make products they love, is available to them.”

Other big firms offering similar services

Robinhood is not the first firm to allow investors to buy small pieces of major stocks though. In late October, Twitter CEO Jack Dorsey’s financial services firm Square announced it will offer users the ability to trade fractions of a stock for as little as $1 on its Cash App. Prior to that, United States-based investment giant Charles Schwab announced a similar initiative on Oct. 17.

As reported on Nov. 22, American financial services giant JPMorgan announced a similar initiative, allowing accounts with less than $5,000 in ETFs and cash balances to trade both whole and fractional shares.

According to Business Insider, Robinhood’s product manager Abhishek Fatehpuria declined to reveal when the company started working on fractional shares, noting that they have been thinking about the initiative “for a while.”

The news comes after Robinhood voluntarily decided to withdraw its bank charter application with the Office of the Comptroller of the Currency in late November before applying for it in April this year.

Price Analysis 13/12: BTC, Cryptos Prepare for Possible ‘Santa Rally’

Price Analysis 13/12: BTC, Cryptos Prepare for Possible ‘Santa Rally’

Data shows that whales and institutional investors accumulated Bitcoin throughout its 2-year long bearish phase, should retail investors follow?

Data from CoinMetrics shows that crypto whales now hold 42.1% of Bitcoin’s current supply. This is a slight increase compared to 37.9% two years back and analysts have interpreted the increase as a positive sign, as it shows large investors have been accumulating Bitcoin during its bear phase. There is, however, no major change in the top 1,000 addresses, as their holdings only inched up from 34.4% at the end of 2017 to 34.8%, according to Flipside.

While retail traders have been worried about picking a bottom, large investors are looking at the possible upside to be attained over the next few years. Mark Yusko, the chief executive and chief investment officer at Morgan Creek Capital Management, anticipates Bitcoin to rally to $100,000 by 2021 and to $250,000 by 2025. By 2030, Yusko expects Bitcoin to reach “gold equivalence” and rise to $400,000 or $500,000.

Daily cryptocurrency market performance. Source: Coin360

Daily cryptocurrency market performance. Source: Coin360

Major financial firms have recognized the increasing demand from institutional investors and have been working towards offering custody and other services for cryptocurrencies. The latest to join the bandwagon is Amsterdam-based bank ING, which is reportedly in the early stages of developing cryptocurrency custody technology.

With increasing institutional involvement, should retail investors also jump in and buy at the current levels or could the prices fall further and provide a better entry point later? Let’s analyze the charts to find out.

BTC/USD

The bulls have been defending the immediate support at $7,085.80 for the past two days but have failed to secure a sharp bounce off it. This shows hesitation among the bulls to buy aggressively at these levels. However, if the bears fail to sink Bitcoin (BTC) below $7,085.80 within the next few days, we anticipate buying to pick up.

BTC USD daily chart. Source: Tradingview

BTC USD daily chart. Source: Tradingview

The first sign of strength would be a close (UTC time) above the 20-day EMA. Above this level, a move to $7,856.76 is likely. If the bulls can scale above this resistance, a rally to the downtrend line is possible.

We expect that the bears will mount a stiff resistance at the downtrend line but if the bulls can propel the price above it, the BTC/USD pair could move up to $10,360.89. Therefore, we retain the buy recommended in our earlier analysis.

On the other hand, if the recovery attempt from the current level fizzles out at the 20-day EMA, the bears will make another attempt to break below $7,085. If successful, a drop to $6,512.01 will be on the cards.

ETH/USD

Ether (ETH) dipped below the support at $143.259 on Dec. 12 but managed to recover and close (UTC time) above it. This shows buying at lower levels. The bulls will now try to push the price to the overhead resistance zone of $151.829 to $157.50.

ETH USD daily chart. Source: Tradingview

ETH USD daily chart. Source: Tradingview

A breakout of the resistance zone can propel the altcoin to $173.841 and above it to $197.75. Traders can attempt to ride this move by initiating long positions as suggested in our earlier analysis.

However, if the bounce from the current levels fails to find buyers above the resistance zone, the bears will make another attempt to sink the price below $143.259. If successful, the ETH/USD pair might drop to $131.484.

XRP/USD

Although XRP slipped below the first support at $0.22 on Dec. 12, the bulls defended the next support at $0.20946. Currently, the bulls are trying to push the price back above the uptrend line of the ascending triangle and $0.22. If successful, a move to the 20-day EMA and above it to $0.23260 is possible.

XRP USD daily chart. Source: Tradingview

XRP USD daily chart. Source: Tradingview

A breakout of $0.23260 will be the first indication that the buyers are making a comeback. We would wait for the price to sustain above $0.23260 before suggesting a trade in it.

Nonetheless, if the bulls fail to propel the price above the 20-day EMA, the bears will again attempt to sink the price below $0.20946. If successful, a drop to $0.20041 is possible.

BCH/USD

Bitcoin Cash (BCH) has been trading close to the $203.36 support for the past three days. The failure of the bears to sink the price below it shows that the selling pressure is waning. We now expect the bulls to push the price to the 20-day EMA.

BCH USD daily chart. Source: Tradingview

BCH USD daily chart. Source: Tradingview

A breakout of the 20-day EMA could carry the price to $227.01. If the bulls succeed in pushing the price above this resistance, the BCH/USD pair might start a rally to $306.78. Therefore, traders can attempt a long position above $227.01 as suggested in our earlier analysis.

On the other hand, if the bulls fail to carry the price above the 20-day EMA, a break below $203.36 is likely. The next support on the downside is $192.52, below which the downtrend will resume.

LTC/USD

Litecoin (LTC) made a doji candlestick pattern near the support of $42.0599 on Dec. 12, which shows indecision among bulls and bears. If the bears sink the price below the support, a drop to $36 is possible.

LTC USD daily chart. Source: Tradingview

LTC USD daily chart. Source: Tradingview

Conversely, if the bulls manage to push the price above the small downtrend line and the 20-day EMA, a range-bound action between $50 and $42.0599 will ensue.

We spot a possible bullish divergence on the RSI, which is a positive sign. The LTC/USD pair could pick up momentum above $50. Therefore, traders can buy on a close (UTC time) above $50 with a stop loss below $42. The target objective is a rally to $66.

EOS/USD

Although EOS dipped below the support at $2.5804 for the past two days, the bears have not managed to close (UTC time) below it. This shows buying at lower levels. The bulls will now try to push the price above the 20-day EMA. If successful, the range-bound action between $2.5804 to $2.5695 is likely to continue for a few more days.

EOS USD daily chart. Source: Tradingview

EOS USD daily chart. Source: Tradingview

A breakout of $2.8695 will be the first sign of strength. Above this level, a rally to the downtrend line and above it to $3.69 is possible. The short-term traders can ride this up move as suggested in our earlier analysis.

Contrary to our assumption, if the EOS/USD pair turns down from the current levels or the 20-day EMA and plummets below $2.5804, a drop to $2.4001 is possible.

BNB/USD

Binance Coin (BNB) bounced off the support at $14.2555 on Dec.12 but the bounce has been shallow, which suggests a lack of aggressive buying at these levels. We anticipate the bears to again attempt a breakdown of the support. If successful, a drop to $11.30 is possible.

BNB USD daily chart. Source: Tradingview

BNB USD daily chart. Source: Tradingview

Conversely, if the bulls can carry the price above the 20-day EMA, the BNB/USD pair might remain range-bound for a few more days. A break above $16.50 will be the first indication that the buyers are back in the game. Above this level, a rally to $21.80 is likely.

As the risk to reward ratio is attractive, we retain the buy recommendation given in the previous analysis. The bullish divergence on the RSI is the only positive setup on the chart.

BSV/USD

Bitcoin SV (BSV) is struggling to stay above the support at $92.693. This shows a lack of buyers even at these levels because they are not confident that a bottom is in place yet. If the price does not rise above the 20-day EMA within the next few days, the possibility of a breakdown to $78.506 increases.

BSV USD daily chart. Source: Tradingview

BSV USD daily chart. Source: Tradingview

However, if the BSV/USD pair bounces off the current levels and rises above the 20-day EMA, a move to $113.960 is possible. The pair might consolidate in this range for a few days and pick up momentum on a breakout and close (UTC time) above $113.960. We would wait for a new buy setup to form or the price to sustain above the 50-day SMA before proposing a trade in it.

XTZ/USD

Tezos (XTZ) rebounded sharply from the 20-day EMA on Dec. 12, which shows that the sentiment is to buy the dips. We anticipate the bulls to face a minor resistance at $1.6555 but as the momentum is strong, a move to $1.85 is likely.

XTZ USD daily chart. Source: Tradingview

XTZ USD daily chart. Source: Tradingview

Previously, the rallies have turned down from close to $1.85, hence, we anticipate the bears to mount a stiff resistance at this level. If the price turns down from $1.85 once again, we expect the buyers to step in at $1.65 and below it at the 20-day EMA.

Contrary to our assumption, if the bulls propel the price above $1.85, it will signal a major bottom and the next target could be $2.95. We remain bullish and would suggest a trade if we find a buy setup with an attractive risk to reward ratio.

XLM/USD

The bulls are attempting to defend the support at $0.051014 but the failure to achieve a strong bounce is likely to attract further selling. If the bears break below the support at $0.051014, Stellar (XLM) could drop to the next support at $0.041748.

XLM USD daily chart. Source: Tradingview

XLM USD daily chart. Source: Tradingview

The downsloping moving averages and the RSI close to the oversold zone shows that bears are in command.

Our negative view will be invalidated if the XLM/USD pair rises sharply from the current levels and breaks out of the 20-day EMA. Such a move will keep the price range-bound for a few days. The pair could pick up momentum above $0.060, hence, traders can initiate long positions as suggested in our earlier analysis.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Market data is provided by HitBTC exchange.

Sweden’s Central Bank to Partner with Accenture to Launch E-Krona

Sweden’s Central Bank to Partner with Accenture to Launch E-Krona

Sweden’s central bank plans to create a pilot platform for a new digital currency, called the e-krona, in latest in European CBDC news.

Sweden’s central bank is planning plans to create a pilot platform for a digital currency known as the e-krona.

While Switzerland took a negative stance towards a central bank digital currency (CBDC) earlier today, with its government claiming that it could do more harm than good, Sweden is starting to explore the potential benefits of e-krona, Reuters reports Dec. 13.

Riksbank eyes partnership with Irish professional services firm Accenture

According to the report, Riksbank, Sweden’s central bank, said that it would partner with Irish professional services company Accenture to create a pilot platform for a digital currency dubbed the e-krona.

By initiating the move, the Riksbank aims to bolster its knowledge about the potential of the digital currency as the bank reportedly said:

“The primary objective of the e-krona pilot project is to broaden the bank’s understanding of the technological possibilities for the e-krona.”

Head of the Riksbank previously deemed Libra as an “incredibly important catalytic event”

As noted in the report, the Riksbank has been looking closely at whether it should issue a digital currency, as the use of cash has declined sharply in Sweden in recent years.

Indeed, the Riksbank appears to have been closely observing the issues surrounding digital currencies so far. In mid-October, the head of Sweden’s Riksbank considered Facebook’s Libra stablecoin project an “incredibly important catalytic event.” Riksbank Governor Stefan Ingves noted that such initiatives trigger the world’s central banks to ready themselves for digital transformation.

The news comes against the backdrop of Switzerland, which is the homeland to the Crypto Valley Association, abruptly shutting down the idea of issuing a digital Swiss franc earlier today. As reported by Cointelegraph, the Federal Council concluded that a CBDC cannot meet expectations for payment efficiency, effective monetary policy, and a more stable financial system.

VeChain Loses $6.6M in VET Tokens to Hacker in Attack on Buyback Wallet

VeChain Loses $6.6M in VET Tokens to Hacker in Attack on Buyback Wallet

VeChain token slips over 4% after an unknown hacker has redirected $6.6 million from the VeChain Foundation’s buyback wallet.

Note: This story has been updated to provide more details about the incident.

VeChain Foundation’s wallet has been compromised in a hacker attack targeting funds earmarked for the foundation’s buyback program.

Per a VeChain Foundation announcement on Dec. 13, an unknown hacker has redirected 1.1 billion VET tokens — valued at approximately $6,600,000 at press time — from the VeChain Foundation’s buyback wallet to a personal wallet address.

Security breach is likely a result of internal misconduct unnoticed due to human error

In the initial update on the incident, VeChain Foundation noted that the hack is in “no way related” to the operations of the actual standard procedure or VeChain’s hardware wallet solutions.

According to the statement, the VeChain’s security breach was likely due to misconduct of one of its staff members in the finance team. Specifically, the person has allegedly created the buyback account partly violating the standard procedure approved by the Foundation. The auditing team did not pick up the misconduct due to human error, the announcement notes.

Measures to mitigate the situation and add more clarity

In the same announcement, the Foundation has listed a number of measures designed to mitigate the incident and get more clarity. As such, the firm provided a link with the hacker’s address tagged on VeChainStats in order to instantly trace other addresses interacting with the hacker’s address.

As part of their efforts, the company notified all exchanges to monitor, blacklist and freeze all funds coming from the attacker as well as withdrawals from the corresponding exchanging wallets.

Additionally, VeChain has launched a security investigation on other crypto assets that are subject to the custody of the Foundation to prevent further breach. The Singapore-based firm also reported on the incident to law enforcement in Singapore and will keep monitoring the situation and working with cybersecurity and law enforcement professionals to add more clarity, the statement notes.

VET token slides over 4% amid the hack

VeChain is a major cryptocurrency and blockchain platform designed to enhance supply chain management and business processes. VET token is ranked the 28th largest crypto asset by market capitalization of $325 million at the time of this writing. Following the news, the token dipped over 4% with the market cap dropping to a low of $320 million. The altcoin is seeing a slight recovery at press time, according to Coin360.

VET 24-hour price chart. Source: Coin360

VET 24-hour price chart. Source: Coin360

VeChain, which is known for providing its blockchain Thor blockchain for Walmart China’s blockchain platform, has recently partnered with Cointelegraph Consulting, a division of Cointelegraph aiming to contribute to the global adoption of blockchain technology.

Libra Updates White Paper, Removes Dividends for Libra Association

Libra Updates White Paper, Removes Dividends for Libra Association

Libra white paper is quietly updated with amended Libra Association members and removal of dividends for early investors.

The white paper for Facebook’s proposed Libra currency has been quietly updated, according to a Dec. 10 article written by Georgetown University law professor, Chris Brummer. Aside from expected amendments reflecting the revised Libra Association members, the biggest change is the removal of dividends payable to those early investors.

Change in use of interest on reserve assets

While the initial Libra white paper published in June specified that interest on the reserve assets would be used to cover system costs, keep transaction fees low, support growth, and pay dividends to the early investors i.e. Libra Association members, mention of dividends has now been removed, so it now reads: 

“Interest on the reserve assets will be used to cover the costs of the system, ensure low transaction fees, and support further growth and adoption.”

Dividend removal alleviates potential conflict of interest

The problem with awarding dividends, and potentially the reason for the change according to Brummer, is that it created a potential conflict of interest between Libra Association members, and end-users of the currency.

To encourage uptake of Libra, the reserve assets with which they are backed should be stable. However, if dividends are paid from the interest on these assets, this gives an incentive to load the reserve with higher-risk assets.

This in turn would reduce trust in and uptake of Libra, because the supposed stablecoins could lose their value.

Avoiding branding as securities

There is also the possibility that the changes are in some way addressing concerns that Libra may be classified as a security.

As Cointelegraph reported earlier this month, two lawmakers in the United States would like Libra and other managed stablecoins to be defined as securities. However, Brummer believes that this is an unlikely outcome, due to the very nature of stablecoins not increasing in value.

Project Ragnarok: Digix Integrates Dissolution Mechanism for DigixDAO

Project Ragnarok: Digix Integrates Dissolution Mechanism for DigixDAO

Digix announces ‘Project Ragnarok’ integration of dissolution mechanism for its DigixDAO platform.

Gold-backed stablecoin issuer Digix has integrated a dissolution mechanism into its DigixDAO platform, created to fund projects which encourage the growth of the Digix ecosystem. Each quarter, DGD token holders will vote on the mechanism — called Project Ragnarok — with DigixDAO only continuing into the next quarter if the dissolution vote fails.

The first Project Ragnarok proposal was recently submitted to the DigixDAO for voting, although the concept was first announced in a blog post on Nov. 29.

Why introduce a dissolution mechanism?

Digix makes clear that its position is firmly opposed to dissolution, as it believes that the Digix Gold (DGX) ecosystem would not have grown as it has without the support of DigixDAO community members. Due to this bias, it will abstain from voting on any dissolution projects.

However, feedback received from those who have participated in DigixDAO has been mixed. One recurring request has been for a mechanism so that DGD token holders can make a clean break from DigixDAO.

After considering a number of options, including a burn contract whereby DGD could be swapped for a proportion of the Ether held in the DigixDAO, Digix decided on a quarterly vote on dissolution.

And if dissolution vote passes?

If the dissolution vote passes, all of the remaining ETH in the DigixDAO fund, after other quarterly passed projects have been funded, will be returned to DGD holders. The DigixDAO will then not continue into the next quarter.

Digix and DGX tokens will continue to exist, but the platform for funding projects around the Digix ecosystem, will not.

Digix is one of a number of gold-backed stablecoin issuers, being one of the first to market, with a beta platform launched in January 2016.

Silk Road Darknet Marketplace Founder: BTC Will Reach $100,000 in 2020

Silk Road Darknet Marketplace Founder: BTC Will Reach $100,000 in 2020

The price of Bitcoin will skyrocket up to $100,000 in the coming year, according to the founder of infamous darknet marketplace Silk Road, Ross Ulbricht.

The price of Bitcoin (BTC) will skyrocket up to $100,000 in the coming year, according to the founder of infamous darknet marketplace Silk Road.

In a series of blog posts on Dec. 10, Ross Ulbricht — the founder of now-defunct anonymous marketplace Silk Road — predicted that BTC’s price will reach $100,000 in 2020. The blogs were published based on letters he wrote in prison, using a type of market analysis known as Elliott Wave Theory.

Ulbricht claimed the possibility to carry out such an analysis even without knowing Bitcoin day-to-day price movements and the general condition of the market. To forecast the highs and lows in financial market cycles, Ulbright identified extremes in investor psychology. In terms of Bitcoin, investors’ emotions purportedly play a more significant role as opposed to traditional markets.

As such, Bitcoin price could be artificially increased by investor expectations combined with mass psychology and through a positive feedback loop of buyer optimism

Industry players predict BTC price

Some other industry players have also made predictions in regards to Bitcoin price movements in the upcoming year. Sources told Cointelegraph that Andy Cheung, head of operations at cryptocurrency exchange OKEx, sees Bitcoin surging above $14,000 in 2020. According to Cheung, a Bitcoin ETF listing in the United States could be a catalyst for the price increase.

Robert Beadles, president at blockchain company Monarch, reportedly suggests that Bitcoin’s halving in May could spike the price to $11,000 around this time. “I would further venture to say Bitcoin will hit $2 million a coin in the next 5 years so long as the core dev team doesn’t destroy it accidentally from within,” Beadles added.

The mastermind behind the Silk Road

Operating under the pseudonym ‘‘Dread Pirate Roberts,” Ulbricht was the mastermind behind the Silk Road, which let users buy and sell anything, regardless of legality. Although the site listed weapons, stolen credit card details as well as legal products, illicit drugs were by far the most common listing.

The Silk Road pioneered the use of Tor, the network software used to access the darknet, and Bitcoin escrow to conceal purchaser and seller identities and their activity. Ulbricht was arrested and sentenced to life in prison in 2015, convicted of money laundering and aiding in the distribution of drugs, computer hacking and fraud, among other charges.

Earlier in December, Tim Draper, one of the most successful investors in the world, called for Ulbricht’s release.

Celsius CEO Says Entire Internet Will Become an Application on the Blockchain

Celsius CEO Says Entire Internet Will Become an Application on the Blockchain

Serial Entrepreneur Alex Mashinsky stated that the entire internet will become an application on the blockchain due to the rise of fake news.

Speaking at ELEV8CON in Las Vegas on Dec. 10, founder and CEO of Celsius Network Alex Mashinsky said that there is a war brewing between centralized and decentralized networks.

“The centralization of the Internet by companies such as Facebook and Google has created a distorted reality where fake news and blatant lies get the same treatment as documented truths,” said Mashinsky.

Mashinsky said that the rise of centralized social media networks has resulted in an increase in fake news, causing a great deal of confusion regarding the basic facts of issues and events.

Mashinsky also noted that fake news stories tend to increase reader engagement, which is then gets converted into huge profits for companies like Facebook and Google.

“If such lies bring engagement (which is immediately converted into huge profits) then they deserve to be pushed and promoted by the world’s best algorithms, which work tirelessly to extract every dollar out of them. No need to worry about our democracy or human rights, corporate mega-profits can cure all ills if we just issue PR that we donated 1% of what we made to a school or the disabled,” said Mashinsky.

A blockchain-based solution

Mashinsky told Cointelegraph that a blockchain-based data platform is the only solution capable of combating fake news. A system such as this can verify the identity of users and the authenticity of data, bringing a much-needed layer of transparency to the online world.

Mashinsky mentioned that a project like EOS Voice, which uses blockchain technology to record the inner operations of its network, will be one of the first decentralized applications to bring trust to the internet. EOS Voice is a social media platform that was unveiled by EOS creator Block.One. The beta version is scheduled to launch on Feb.14, 2020.

Unlike centralized social media networks that extract personal user information without permission, all operations across EOS Voice are recorded on the blockchain. Moreover, while Mashinsky noted that social networks are vulnerable to fake news due to the fact that anyone can post whatever they please, EOS Voice users must verify their identities. This provides a way to decrease fake accounts and illegitimate content, as everything posted can be traced back to specific people.

Yet while platforms like EOS Voice are being brought to market, Mashinsky pointed out that gaining user traction remains a challenge.

“Platforms designed to protect us and act in our best interest already exist. We are just waiting for 7 billion people to discover them. When they do, the entire internet will become an application on the blockchain” said Mashinsky.

Blockchain economics

To his point, Mashinsky presented a slide during his keynote entitled, “Blockchain Economics.” Written on the slide was “E=MC2”. In this case, E stood for Ethereum, M stood for members, and C stood for Consensus.

“If you want the Ethereum blockchain to ever be valuable you need members and consensus,” explained Mashinsky.

Mashinsky ended his keynote by explaining that we already went through the blockchain hype curve, but that we still need to cross the chasm. He noted that stable coins are a great stepping stone to get people to understand the potential of cryptocurrency. He also recommended to stop using centralized networks entirely:

“The amazing thing is that if we stop this addiction, Facebook will lose their power and disappear just as fast as they got hold of it. How do I know that? I helped make the old phone companies that charged $700 a month to disappear. Now, it’s free because [Voice over IP] allows us to take the power back and leave these toll collectors behind. It is up to us to decide if the future will be more centralized or decentralized.”

Bitcoin Miner Riot Blockchain Announces Additional 1,000-Rig Purchase

Bitcoin Miner Riot Blockchain Announces Additional 1,000-Rig Purchase

Riot Blockchain announces additional 1,000 new Antminer S17-Pro mining rig purchase, bringing recent order totals to 4,000 in December.

Cryptocurrency mining firm Riot Blockchain announced the purchase of an additional 1,000 next-generation Bitmain S17-Pro Antminers on  Dec.12. This completes the upgrade of its Oklahoma City mining facility, following an initial purchase of 3,000 units announced on Dec. 4.

The latest generation of Application-Specific Integrated Circuit miners from mining hardware giant Bitmain represents an approximate 50% improvement in hardware power efficiency compared to the S9 Antminers currently in use by Riot.

The company anticipates that the new miners will generate 440% of the hashrate of the S9s while consuming only 220% of the power.

Riot mined over 1,820 Bitcoins (BTC) in Q3 2019, posting a gross profit margin of 14% (excluding depreciation and amortization), and hopes to increase these figures when its new purchases are deployed in Q1 2020.

Full steam ahead

Assuming full utilization of the Oklahoma City facility’s 12-megawatt available electricity supply, and deployment of the total 4,000 new miners, Riot estimates the aggregate operating hashrate will be around 248 petahash (248 quadrillion hases) per second. 

Riot reportedly paid around $1.35 million dollars for the additional 1,000 S17-Pro Antminers, or approximately $1,350 per rig. The retail price listed on the Bitmain web-store is $1401 per unit, although this is unlikely to include local sales tax.

In April this year, Riot Blockchain announced its intention to launch a regulated cryptocurrency exchange in the United States by the end of Q2 2019. To date, however, this has still failed to materialize.

Lisk’s Lightcurve Lays Off 40% of Workforce to Decrease Overheads

Lisk’s Lightcurve Lays Off 40% of Workforce to Decrease Overheads

Lisk’s Lightcurve team reduces workforce by 40% in an attempt to reduce operational overheads and become more agile again.

Blockchain development studio Lightcurve — a part of the Lisk open-source blockchain application platform — laid off 40% of its workforce earlier this week. Lightcurve and Lisk co-founder, Max Kordek, announced the decision earlier this week on Discord, citing a need for the project to cut costs.

The job losses represent 21 of Lightcurve’s 53 employees, and in addition, the project has canceled the contracts of three employees who were set to join. 

Kordek said that the firm would focus on keeping talent in the research, backend development and developer relations departments while downsizing frontend development, marketing, design and operations. Kordek further explained:

“The reasons were to decrease our burn rate which by a large degree consisted of human resources costs, and to decrease our operational overhead in order to become more agile again.”

The remaining 32 employees will continue to focus on building the Lisk platform from Lightcurve’s Berlin-based offices.

Several blockchain companies feeling the pinch

Lightcurve is just the latest of several blockchain companies to recently announce job losses due to cost-cutting and streamlining measures.

As Cointelegraph reported, blockchain payments company Circle announced a further 10 job losses this week, following a cull of around 30 staff (representing approximately 10% of the firm) in May.

Also this week, Ethereum development studio Consensys announced the closure of offices in India and the Philippines, resulting in 11 job losses.

And last month, blockchain analysis firm Chainalysis reportedly laid off almost 20% of its workforce, totaling 39 staff. According to Maddie Kennedy, Chainalysis’ director of communications, the research and development team was most affected by the cuts.