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Indian Users Almost 5 Times More Likely to Encounter Crypto Hacking: Microsoft Report

6 years 2 months ago

While increased volatility and rising mining difficulties have deterred crypto-mining attacks, users in India and Sri Lanka face a relatively higher chance of encountering one, according to Microsoft’s recent cybersecurity report for countries in the Asia-Pacific region.

Mining attacks infect a user’s computer with crypto-mining malware that allows the hacker to utilize someone else’s computing power to mine cryptos without their knowledge. 

  • The report notes India’s encounter rate for such attacks is 4.6 times higher than the global and regional average. The crypto-hack encounter rate for India in 2019 was 0.23%, a decline of over 50% since 2018.
  • Users in Sri Lanka and Vietnam also face a high incidence of such attacks.
  • In addition to crypto-hacking, malware, ransomware and drive-by download attacks pose big cybersecurity challenges in India, according to the report.
  • Although the report states that drive-by download attacks have dipped overall in the region, India registered a rise of 140% in such attacks. These involve the unintentional download of malicious software when users visit a website or use an app and can be used to extract intellectual property or financial information. Singapore, India and Hong Kong are three countries that face the highest incidence of such attacks. 
  • The security report compiled by Microsoft, using data from January to December 2019, also states that about 6% of Indian users encountered malware attacks over the last year.
  • The Asia-Pacific region also has a higher than average malware and ransomware encounter rate – 1.6 and 1.7 times higher than global averages respectively, according to the report.

Read more: Is Bitcoin Mining Legal in India? Miners Still Don’t Know

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CoinDesk

Blockchain Bites: Ledger’s Breach, Celsius’ Contradictions and DeFi’s Next Frontier

6 years 2 months ago

Ledger suffered a data breach, crypto mining in India comes with questions and a new decentralized finance (DeFi) looks to offer lending and saving opportunities for PoS token holders.

You’re reading Blockchain Bites, the daily roundup of the most pivotal stories in blockchain and crypto news, and why they’re significant. You can subscribe to this and all of CoinDesk’s newsletters here. 

Top shelf

Anchor Aweigh
Liquidity mining is coming to proof-of-stake (PoS) blockchains. Anchor, the new DeFi platform from Terra, Cosmos, Web3 Foundation and Solana, is designed to launch with a governance-token reward. Version 1 will go live in October, according to a Terra co-founder, offering a two-pronged platform for PoS token holders. The system offers savings accounts and a lending platform – the bread and butter that made DeFi on Ethereum a multibillion-dollar enterprise. “We’ve been looking at ways in order to earn passive income on our users, for unused balances in unused assets,” Do Kwon, a co-founder of Terra and the startup built atop it, Chai, said. CoinDesk’s Brady Dale breaks down how it works.

Related: First Mover: Crypto Traders ‘Greedy’ as Goldman Warns on Dollar

Elevator Rides Towards Regulatory Approval
ArCoin became the first cryptographically traded U.S. Treasury Fund registered under the Investment Company Act of 1940 (a so-called ‘40 Act Fund) in early July – after 605 days of attempting to appease regulators. Arca Labs and Tokensoft, the fund’s pursuer and designer, met with and overcame regulators’ misconceptions of how crypto markets function, partly through proximity: Tokensoft’s offices were 10 floors apart from the SEC’s in San Francisco’s financial district. The fund does not represent an investment in the Ethereum blockchain, but it does signal a shift in the regulator’s tolerance for public blockchain investment vehicles. 

Celsius’ Contradictions
Crypto lender Celsius is making uncollateralized loans, on a limited basis, contradicting the claims of its founder, Alex Mashinsky. “Celsius’ total uncollateralized loans are less than a fraction of 1 percent out of tens of thousands of loans issued since 2018,” a Celsius representative said. Uncollateralized lending is one of several practices that the firm has downplayed or not shared with depositors – including the rehypothecation of collateral borrowers pledge. “In its terms of use, Celsius reserves the right to re-hypothecate customers’ assets, but it’s ambiguous whether the passage refers solely to depositors’ funds or to borrowers’ pledged collateral as well,” CoinDesk’s Nathan DiCamillo reports.  

Ledger Hacked
Ledger suffered a data breach that may have leaked client information for over two months. In a note to clients Wednesday, CEO Pascal Gauthier said the French hardware wallet provider’s e-commerce and marketing database was accessed by an unknown third party, exposing email addresses of customers who signed up to Ledger’s newsletter or receive promotional material, as well as full names, postal addresses, and phone numbers of about 9,500 customers. In total, the company estimates around one million email addresses have been stolen. Customer funds, passwords and payment info were not affected, and the hole has been patched. 

Mining Muddle
India’s Supreme Court has relaxed a ban on banking cryptocurrency firms but the verdict is still out on crypto mining. Recently, a rumor spread of a new government ban. ”It’s risky and bizarre to work in such an environment,” Anshul Dhir, founder of mining startup Qadcore, said. His business, and many like it, are operating under a cloud of uncertainty including whether customers will allow necessary ASICs chips into the country. 

Quick bites At stake

Related: Blockchain Bites: Bitcoin’s New ETP, Ethereum’s ‘Woodstock Moment’ and Silvergate’s SEN Zen

CoinDesk’s Nikhilesh De spoke with Commodity Futures Trading Commission (CFTC) Chairman Heath Tarbert about his approach to crypto regulation. The nation’s top commodities regulator noted that many of crypto’s unique attributes – borderlessness and decentralization – require a thoughtful approach. 

Economic systems are in a constant state of flux.

  • “Our entire financial and economic system outside the current system, the non-crypto system basically evolved since, one could argue, the Renaissance in Italy,” he said. “Whereas what people are doing in the digital asset space is effectively building within a decade or less an entire economic system based on human incentives and trust … I just find that fascinating.”
  • Tarbert specified that he is interested in the way developers are incorporating “hundreds of years of accumulated knowledge about human behavior and economic incentives” as well as cryptographic methods originally used in national security applications to build these digital commerce systems.  

Blockchain could become the foundation of an entirely new financial system.

  • “When you think about the idea that at some point a large part of our financial system could very well exist in blockchain format, that’s also revolutionary,” he said.

On the duties of a regulator. 

  • “My view is that to be a successful CFTC chairman, meaning regulating the derivatives market, you have to have [a] keen understanding of the underlying market,” he said. “And so I’ve tried to learn as much as I can about the various agricultural sectors. I’ve gone out into fields and … gone to grain elevators, I’ve gone to a feedlot to learn about cattle and wheat. I’m learning about oil but I’m also learning a lot about crypto and in many ways, because it’s so revolutionary and so cutting edge, I’m spending a lot of time just learning how it all works in the ecosystem.”

On writing the law of the land.

  • “I suspect some of it will be principles-based and some of it will be more specific rules … the right blend of each to allow for innovation and also flexibility both for market participants but also for ourselves because we don’t want a regulatory framework to be obsolete six months after it’s introduced, but at the same time, there may be customer protection and maybe some other issues that are so important that we want to provide very clear standards and rules to provide clarity.”
Market intel

FOMO, Greed & Crypto
A popular gauge of market sentiment known as the Crypto Fear and Greed Index has, in just one week, turned from “fear” to “extreme greed.” Swedish cryptocurrency analysis firm Arcane Research found the market is now at its greediest in a year. Bitcoin is up 51% in 2020. Meanwhile, Ether has jumped about 30% just in the past seven days – a bigger gain than the Standard & Poor’s 500 Index mustered in all of 2019 – and is up 142% on the year. “For bitcoin, this rally is driven largely by FOMO and a momentum play,” Denis Vinokourov, head of research for cryptocurrency prime broker BeQuant, said Tuesday in emailed comments. FOMO stands for “fear of missing out.” 

Latest ETH ATH
Ethereum usage is rocketing as the number of contract calls – a metric for network activity – hits an all-time high. Coin Metrics reported Tuesday more than 3.1 million daily contract calls had gone through on July 25, an all-time high. A contract call is where a user requests a specific function from a smart contract that, unlike a transaction, doesn’t publish anything on the blockchain – sort of like a dry run. The bump primarily came from DeFi applications, which has more than quadrupled in size to $4 billion total value locked, year-to-date.

Tech pod

Lighten the Node
MIT researchers have developed a way to make it easier to run a Bitcoin full node. The software, called Utreexo, shrinks the size of a node’s “state,” or an up-to-date account of the entire Bitcoin network, from roughly four gigabytes to less than a kilobyte. This is an important step for a continually growing network that relies on nodes to validate transactions. The code exists as a testnet; developers will have to eventually modify Bitcoin Core to make it suitable for use with real money.

Secret Contracts
The community behind “secret contracts” is moving forward after months of delay. The Secret Network, an open source network that protects data for users of decentralized applications, known as “Secret Apps,” has started a token burn and is welcoming players such as Binance, Staked and Figment to its testnet of “secret contracts.” The network’s protocol lets decentralized applications use encrypted data without revealing it on a public blockchain, or even to nodes themselves, using smart contracts that use private data termed “secret contracts.” 

Opinion

First Amendment Protections
Justin Wales, co-chair of Carlton Fields’ national blockchain and virtual currency practice, said Bitcoin is protected under the First Amendment, including all the decentralized bits and bobs it enables. “We’ve all heard the phrase ‘Money is Speech,’ which stems from the U.S. Supreme Court’s recognition that the use of money can itself be an expressive act. One has a right to donate to a political party because we view that type of spending not as financial, but as communicative. Because of Bitcoin, money is no longer restrained to a dollar’s limitations. Accordingly, the range of expression one is capable of has been expanded because money has taken on a more useful form,” he writes. 

Podcast

Why Bitcoin Boomed
NLW looks at eight factors that may explain Bitcoin’s recent surge to a yearly high – ranging from banks beginning to custody crypto after a recent rules change, federal money printing and Robinhood traders getting wise to crypto. 

Who won #CryptoTwitter? Related Stories
CoinDesk

DeFi Lender Aave Rolls Out Governance Token on Path to Decentralization

6 years 2 months ago

Money protocol Aave is going fully autonomous, according to documents shared with CoinDesk.

Formerly EthLend, Aave will transfer ownership of the protocol over to a “genesis governance” built and approved by token holders. The platform’s native lend (LEND) token will also swap for the new aave (AAVE) token, documents show.

Aave launched its Ethereum-based money market in January 2020 after completing a 2017 initial coin offering (ICO) raising $16.2 million, according to Messari. EthLend originally launched as a peer-to-peer (P2P) lending protocol but switched to a pooled protocol that allows for more dynamic asset listings, network liquidity and variable interest rates.

Related: Why DeFi on Ethereum Is Like Algorithmic Trading in the ‘90s

The platform was one of the first to include the novel decentralized finance (DeFi) product flash loans this past spring. These financial products allow users to make outsized positions on trades without any downside.

Read more: Everything You Ever Wanted to Know About the DeFi ‘Flash Loan’ Attack

LEND tokens swapped for AAVE

The 1.3 billion LEND tokens will swap with the newly minted AAVE at 1:100 for a total of 16 million AAVE. Of the 16 million, 3 million will be issued to a new “Aave Reserve” for protocol improvements under the auspices of the community, Aave writes. The rest will be issued to current LEND holders.

Market Policies (for determining asset listings, loan-to-value (LTV) ratios and interest rate modeling) and Protocol Policies (for risk, general improvements and platform incentives) will be determined by community votes, formalized in Aave Improvement Proposals (AIPs). 

Liquidity mining

Related: How the EEA Made Ethereum Palatable to Big Business

The Aave platform will incorporate en vogue liquidity mining, a method to attract assets to the platform. The team said AAVE tokens will be accrued to users for deposits into the protocol’s backstop, the Safety Module (SM). 

Read more: What Is Yield Farming? The Rocket Fuel of DeFi, Explained

Aave’s SM provides security for the platform in the case of a catastrophic failure from a major liquidation event, smart-contract bug or pricing data mistake. Aave will use Chainlink’s oracle network for pricing assets. 

The SM is constructed via Balancer, another DeFi protocol called an automatic market maker (AMM). These protocols let users swap tokenized assets such as ether and dai (ETH/DAI) in a permissionless manner. Users will also gain Balancer (BAL) tokens, plus various network fees for SM depositors, Aave says.

Read more: Following COMP’s Surge, DeFi Platform Balancer Begins Distribution of BAL Tokens

Aave isn’t the only DeFi platform to migrate toward autonomous and decentralized governance. 

The Maker Foundation, which oversees MakerDAO, has been slowly moving toward full decentralization since the project launched in 2015. Asset platform Synthetix similarly announced its transition to a network of multiple decentralized autonomous organizations (DAOs) Monday.

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CoinDesk

Marine Corps Bans Crypto Mining Apps From Government-Issued Mobile Devices

6 years 2 months ago

The U.S. Marine Corps (USMC) on Tuesday banned service members from installing bitcoin and cryptocurrency mining apps on government-furnished mobile devices.

  • “Bitcoin/Cryptocurrency Mining Tools” appears on a list of prohibited application types, alongside games, gambling, dating, security bypassing and other unsanctioned categories banned in a USMC memo signed Tuesday.
  • While the memo allowed that certain commercial apps “provide new opportunities to improve mission effectiveness,” others nonetheless introduce “privacy and security concerns,” especially when installed on government phones. It did not provide a specific reason for the bitcoin mining app ban.
  • The memo asked service members to heed the U.S. government’s warnings when downloading prohibited apps on their personal devices.
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CoinDesk

Binance Australia Is Actually Run by the Founders of TravelbyBit

6 years 2 months ago

Binance launched a new Australian fiat-to-crypto exchange platform Wednesday that CoinDesk has discovered is run by the founders of a company providing crypto payment services for the local tourist industry.

  • Binance announced Wednesday its Australian platform – a local onramp to the broader Binance ecosystem – will now accept AUD deposits from local bank accounts.
  • In the announcement, CEO Changpeng Zhao said the gateway will provide a “regulated platform” for Australian users.
  • After CoinDesk made inquiries, a spokesperson said Binance Australia was a separate entity from the main exchange group – similar to Binance U.S.
  • It is operated by InvestbyBit Pty, a Queensland-based private company and a licensed Australian digital currency exchange.
  • Through InvestbyBit, Binance Australia is registered with AUSTRAC, one of the country’s primary financial enforcement agencies, the spokesperson added.
  • As the name suggests, InvestbyBit has close ties to TravelbyBit, a crypto payment provider for the tourist industry in which Binance invested $2.5 million in late 2018.
  • On LinkedIn, InvestbyBit CEO Caleb Yeoh is one of the co-founders of TravelbyBit; COO Shireen Yip is also listed as InvestbyBit’s investment consultant.
  • When Binance Australia’s precursor, Binance Lite, launched in early 2019, it was also operated by InvestbyBit.

See also: Binance Is Not Under Our Jurisdiction, Says Malta Regulator

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CoinDesk

Marathon Boosting Bitcoin Mining Game With 1,360 More Rigs Arriving in August

6 years 2 months ago

Publicly traded cryptocurrency mining firm Marathon Patent Group is planning to receive 1,360 additional bitcoin mining rigs in August in a rollout that will rocket its Quebec facility’s hashpower up 320% to 184 peta hashes.

  • The company said in a press release it expects 700 newly bought M31S+ ASIC Miners from MicroBT and 660 previously ordered Bitmain S-19 Pro Miners to arrive in mid-August.
  • Marathon has purchased 3,020 total rigs from the fiercely competitive mining rivals in the past few months. It already has 700 active MicroBT miners, and, in addition to the August arrivals, is waiting on 1,000 more from Bitmain coming in Q4.
  • “Based on current bitcoin prices, the company would expect to become cash flow positive” once it installs the August rigs, CEO Merrick Okamoto said in a press statement.

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CoinDesk

Carbon Credits Have a Double-Spend Problem. This Microsoft-Backed Project Is Trying to Fix It

6 years 2 months ago

The InterWork Alliance (IWA), a tech-agnostic token standardization initiative that grew out of the Enterprise Ethereum Alliance, is working on blockchain tools to prevent the “double-spending” of carbon credits.

Carbon accounting works by allowing countries or corporate entities to pay for their carbon-emitting sins, thus creating a market mechanism to drive industry toward greener processes.

But there’s a problem.

Related: Microsoft Partners With Waves Enterprise to Tokenize Industrial Assets

“There’s no way right now for you to determine that a tree hasn’t been sold 100 times over,” said Microsoft blockchain architect and IWA Chairman Marley Gray.

The Microsoft-backed IWA sustainability group is stepping in with a tokenization standard that aims to bring transparency to carbon accounting.

Read more: Firm Uses Ethereum to Tokenize Sustainable Infrastructure in Fight Against Climate Change

Large companies can offset their carbon emissions by participating in and funding environmentally friendly projects. However, there is a distinct lack of verified carbon-offsetting credits, said Gray.

Related: EU-Based Universities Say Blockchain Could Help Meet Paris Agreement Carbon Goals

“There are not enough verified – verified is the key word – carbon offset credits in the world today just to satisfy Microsoft’s needs for this year,” said Gray. “That was an eye-opener. Every major corporate is coming out with these big sustainability goals, so we have to do something dramatic to improve the supply of verified offsets.”

IWA’s solution

The IWA sustainability working group includes Accenture, Climate Chain Coalition, Digital Asset, Nasdaq, Neo Global Development, R3, SIX Digital Exchange (SDX), Xpansiv and others. The group will create a standardized framework for tokenization, starting with voluntary carbon offsetting, and will then expand its focus to regulated markets in the near future.

This is not a new problem and numerous technologists have tried to come up with ways to make carbon accounting more rigorous, including using blockchains. 

“You had a lot of startups go after these spaces, and everyone’s sort of building these walled gardens that don’t match the buyers’ requirements,” said Gray. “So we decided to back the bus up, and get everyone to agree on what a carbon credit is, how it’s structured and how we should then tokenize that to solve our double-spend credit problem.”

Read more: Hyperledger Conference Shows Where Blockchain Can Fight Global Warming

The term “carbon credit” has become overloaded, said Gray. Part of the IWA’s mission is to break down the different types of carbon credit for tokenization, such as EU-issued carbon credits traded on regulated markets. 

Carbon offsets, on the other hand, can be either derived from avoiding emissions by, for instance, using renewable energy, or by removing emissions via projects that plant trees. Illustrating the problem, these two variants are measured differently and priced differently, said Gray.

When it comes to verifying carbon offsetting projects, firms don’t care whether there’s a blockchain underlying the solution, they just want to be sure it’s trusted and transferable, Gray added.

“We have to be able to define a project so that buyers of carbon credits can find out the project details and see the provenance of that carbon credit and its worthiness,” he said.

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CoinDesk

Bitcoin Looks Overbought but Analysts Play Down Drop Fears

6 years 2 months ago

With bitcoin rising to its highest level in 11 months this week, some investors are beginning to worry that the cryptocurrency is overbought and may be due for notable price drop. 

But analysts suggest that’s an overreaction.

  • Bitcoin’s price rose to $11,319 on Monday, the highest level since August 2019, according to CoinDesk’s Bitcoin Price Index.
  • At time of writing, the cryptocurrency is trading near $11,100, representing a 18% gain from lows near $9,400 observed a week ago.
  • The sudden rally has pushed the 14-day relative strength index (RSI) above 80.00.
  • A measurement of over 70.00 is considered overbought, meaning the bullish move is now overstretched.
  • Asim Ahmad, co-chief investment officer at London-based Eterna Capital, said that an above-70 RSI does not necessarily imply an impending major price slide.
  • More likely it indicates that the bullish move is overstretched and vulnerable to consolidation or a minor retracement at worst, Ahmad said.
  • Lennard Neo, head of research at Stack funds, explained the RSI can stay inflated for longer periods in a strongly trending market, adding that other indicators are showing strong buying momentum.
  • The RSI is based on price and remained elevated during the previous bulls runs.
Consolidation ahead?
  • Bitcoin remained bid and rose 160% in the second quarter of 2019 (above left) despite the RSI printing highs above 70.00 several times during the three-month period.
  • A similar pattern was observed during the bull market frenzy of 2017 (above right).
  • Back to summer 2020 and the overbought measurement on the RSI may keep the cryptocurrency hovering around $11,000 for some time. Support is seen around $10,500.
  • Rotation of money out of the DeFi space and traditional markets and into bitcoin would create momentum for the cryptocurrency, said Neo.
  • Prices could rise quickly toward $12,000 in the short-term if the U.S. Federal Reserve signals higher tolerance for inflation. That could yield another sell-off for the greenback and send gold above the $2,000 mark.
  • Bitcoin still remains vulnerable to a sell-off in equities, as was seen during the wider markets crash in March, according to Joel Kruger, a currency strategist at LMAX Digital.

Also read: How Real Is Bitcoin’s Rally? 8 Interpretations of Bitcoin’s Massive Surge

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CoinDesk

First Mover: Crypto Traders ‘Greedy’ as Goldman Warns on Dollar

6 years 2 months ago

During a turbulent year when cryptocurrencies have outperformed just about every other major investment category, traders in digital-asset markets are getting even greedier. 

Bitcoin, the oldest and largest cryptocurrency, sits at an 11-month high of around $11,000 after surging earlier this week. It’s up 51% in 2020, nearly double the gains in gold, which generated enthusiasm in traditional markets this week when it rose to a record intraday high. 

Ether, the second-largest cryptocurrency, has jumped about 30% just in the past seven days, a bigger gain than the Standard & Poor’s 500 Index mustered in all of 2019. So far in 2020, ether is up 142%. 

Related: Blockchain Bites: Bitcoin’s New ETP, Ethereum’s ‘Woodstock Moment’ and Silvergate’s SEN Zen

You’re reading First Mover, CoinDesk’s daily markets newsletter. Assembled by the CoinDesk Markets Team, First Mover starts your day with the most up-to-date sentiment around crypto markets, which of course never close, putting in context every wild swing in bitcoin and more. We follow the money so you don’t have to. You can subscribe here. 

A popular gauge of market sentiment known as the Crypto Fear and Greed Index has, in just one week, turned from “fear” to “extreme greed.” According to the Swedish cryptocurrency-analysis firm Arcane Research, the market is now at its greediest in a year. 

“Although bitcoin has showed strength, Ethereum has been the real powerhouse of this bullish week in crypto,” Arcane wrote Tuesday in a report. Ether is the native token of the Ethereum blockchain. 

Bitcoin’s rally this week adds to the momentum witnessed recently across digital asset markets, which have grown rapidly in 2020 despite the tumult that has whipsawed traditional assets like stocks and bonds.

Related: Why Bitcoin-Like Scarcity Would Be a Disaster for the Dollar

“For bitcoin, this rally is driven largely by FOMO and a momentum play,” Denis Vinokourov, head of research for cryptocurrency prime broker BeQuant, said Tuesday in emailed comments. FOMO stands for “fear of missing out.” 

While bitcoin has gained because of its perceived use as an inflation hedge, similar to gold, alternative cryptocurrencies like ether have soared due investor speculation that they might play an outsize role in the monetary systems of the future, or even serve as the building blocks for a new financial system. 

“Ethereum has shown particularly strong gains, a rational response to its improving network fundamentals,” according to a report from the cryptocurrency data firm Coin Metrics. 

Heath Tarbert, chair of the Commodity Futures Trading Commission, told CoinDesk’s Nikhilesh De in an interview published Tuesday he finds it “fascinating” how far the digital asset industry has come in the 11 years since bitcoin’s launch. 

“What people are doing in the digital asset space is effectively building, within a decade or less, an entire economic system,” Tarbert said. “When you think about the idea that at some point a large part of our financial system could very well exist in blockchain format, that’s also revolutionary.” 

The devastating economic toll of the coronavirus has severely tested all markets this year, both in analog and digital finance. Investors of all manner are having to account for multitudinous and countervailing forces, from the deflationary impact of soaring unemployment, to the trillions of dollars of government and central-bank stimulus, to the rapidly growing ranks of bankrupt companies, to the wild gyrations in foreign-exchange rates. 

The Federal Reserve on Wednesday is expected to issue a statement at the conclusion of its two-day closed-door meeting, followed by a press conference with Chairman Jerome Powell. 

As highlighted in First Mover on Tuesday, policy markets aren’t expected to take any major actions at the meeting, but Deutsche Bank Strategist Jim Reid says the Fed may need to inject another $12 trillion into financial markets in the next few years to help the economy heal.

The U.S. central bank already has expanded its balance sheet this year by about $3 trillion to roughly $7 trillion, fueling predictions that inflation could heat up once the economy start to recover.  

“The Fed is pivoting from ‘stabilization’ to ‘accommodation,'” Bank of America analysts wrote this week in a report. “The focus will be on stage-setting for future easing, which risks lower real rates and a weaker U.S. dollar.”

Fitch, the credit-ratings firm, wrote this week that the coronavirus impact will weigh on economic growth “for years to come.” 

Goldman Sachs, the Wall Street heavyweight, warned Tuesday that U.S. policy is triggering currency “debasement fears” that could jeopardize the dollar’s role as the world’s reserve currency. 

But as is always the case, the implications aren’t clear-cut. 

The Wells Fargo Investment Institute, which conducts financial-markets analysis on behalf of the third-biggest U.S. bank, predicted Tuesday that former Vice President Joe Biden will defeat President Donald Trump in November’s election, with Democrats also winning control of both chambers of Congress. Such an outcome that could lead to more “spending programs to potentially stimulate the economy.” 

Paul Christopher, head of global market strategy for the Wells Fargo unit, told First Mover in emailed comments that inflation is “very unlikely to mount a recovery,” due to the sluggishness of the economic recovery. 

“While many analysts focus on the rising supply of dollars, the demand for cash in spending is very likely to remain subdued. In such an environment, we believe inflation will fail to gain traction in the coming two years, or longer,” Christopher said. 

To Coin Metrics, just the increased uncertainty might provide support for crypto bulls who think higher inflation will eventually appear. 

“The coronavirus and the monetary and fiscal response have increased the uncertainty in the future path of monetary policy, inflation, and growth, all of which are supportive to bitcoin,” the firm wrote.  

Greed begets more greed. And based on the track record so far this year in digital asset markets, greedy crypto traders haven’t been disappointed. 

Tweet of the day Bitcoin watch

BTC: Price: $11,028 (BPI) | 24-Hr High: $11,196 | 24-Hr Low: $10,743

Trend: The bitcoin market is looking indecisive after witnessing solid two-way business on Tuesday. 

The leading cryptocurrency by market value clocked a high and low of $11,263 and $10,580 yesterday, before ending the day with a 1% drop at $10,940. Essentially, bitcoin charted a “spinning top” candle, which represents marginal gains or losses on the day following two-way price action. 

The spinning top is widely considered a sign of indecision in the marketplace, with neither bulls nor bears being in a commanding position. It also validates the overbought or above-70 reading seen on the 14-day relative strength index. 

In such situations, seasoned technical traders often wait on the sidelines till a strong directional move emerges. So far, bitcoin has not shown any signs of directional strength. Although the cryptocurrency is flashing green near $11,030 at press time, it is still trading well within Tuesday’s price range. 

Acceptance above Tuesday’s high of $11,263 would revive the bullish bias put forward by Monday’s high-volume break above the February high of $10,500 and expose resistance at $12,000.

Alternatively, a high-volume move below $10,500 would invalidate Monday’s bullish breakout. 

Exchange flows suggests the latest price breakout is here to stay, as does increased institutional participation. As such, a sustained move below $10,500 looks unlikely. 

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CoinDesk

Digital Yen Now ‘Top Priority’ for Japan Central Bank, Says Senior Official

6 years 2 months ago

As pressure mounts to catch up with rival China, a Bank of Japan (BoJ) official has said digital currencies are a “top priority.”

  • Speaking to Japanese news outlet The Asahi Shimbun, Takeshi Kimura, departmental director-general, described the digital yen as a chief concern for the central bank.
  • The BoJ has been experimenting with a central bank digital currency (CBDC) but has so far said there are no plans to launch one.
  • The government said this month the launch of a digital yen would be considered as part of this year’s legislative agenda.
  • A proposal from the ruling Liberal Democratic Party in June said China’s global lead in CBDC development could become a national security threat.
  • Senior Japanese lawmakers have been calling on the government to step up research since February.
  • The Philippine central bank has also commissioned research for a CBDC, Governor Benjamin Diokno confirmed Wednesday. Results will be due sometime next month.

See also: Bank of Japan Forms New Team to Explore Central Bank Digital Currency

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CoinDesk

Why DeFi on Ethereum Is Like Algorithmic Trading in the ‘90s

6 years 2 months ago

Mona El Isa would never go back to traditional finance. 

The former Goldman Sachs vice president developed the Melon protocol, a vehicle for creating Ethereum-based hedge funds without having to spend the tens of thousands of dollars it would take to launch a fund in traditional markets.

“Managers who are used to a fund custodian and fund administrator are starting to experiment with automating technology,” El Isa said.

Related: How the EEA Made Ethereum Palatable to Big Business

El Isa admits that not many founders in the decentralized finance (DeFi) space have her background in traditional capital markets. In the traditional world, DeFi resembles what algorithmic trading was in the ‘90s, said Tarun Chitra, CEO of Gauntlet Network, a business that does stress-tests on blockchain networks and DeFi platforms. 

“A lot of money was made on random equities on electronic exchanges,” Chitra said of the Clinton-era innovation. “They were people who were more technical than financial.”

Now Ethereum’s surging DeFi sector could force a similar migration.

Chitra said some traders are beginning to move away from over-the-counter (OTC) desks in favor of emerging DeFi platforms like automated market maker (AMM) Curve and lending protocol Compound. Why bother with an OTC middleman?

Related: Proof-of-Stake Chains Team Up to Prove DeFi Is Bigger Than Ethereum

Still, while proprietary traders have taken an interest in DeFi, few hedge funds and banks have entertained it, he said. 

But builders who’ve come from equities to DeFi see a lot of opportunity for growth.

New interest

For example, in the Melon protocol’s first year there were almost no users and only $250,000 on the platform, El Isa said. After Melon’s user interface was updated last February, the platform’s total assets increased to $1.2 million. Now the number of funds on Melon has tripled in the last four months, although many of them are experimental, El Isa added. Around two dozen of the funds on the platform are real funds. 

“The biggest success story on our platform is now half of the whole [assets under management],” El Isa said, referring to a closed fund that only lets in whitelisted investors. “He’s got $625,000 on his network.”

For traditional funds, operation costs are normally less than $100,000 for the first year and $75,000 for every year after that, she added. On Melon, the setup cost is currently $100 for the first year and around $1,000 to $2,000 per year in gas prices after that (the cost was around a fourth of those estimates last year, before gas prices started to spike).

As funds build longer track records,  El Isa hopes Melon will become more attractive to investors. “The track records are not long enough to make that attractive for people yet,” she said. “I think in a few months people will be like, ‘Wow, this fund has consistently been outperforming ether.’”

Even if El Isa ends up moving from building protocols to launching another fund, she said she’s determined to do so in DeFi. Melon protocol is now decentralized and El Isa has launched Avantgarde Financial, a company that plays the lead developer role for Melon. El Isa was formerly the CEO of Melonport AG.

‘Less scary’

Barney Mannerings, CEO of Vega Protocol, which aims to allow users to spin up a market for derivatives anywhere in the world, said that while DeFi is still in an experimental phase, he sees a great deal of interest from the large investment banks – the ones he used to advise while at Capco and Accenture.

Instead of creating a new derivative over the course of a year, Vega will allow users to submit market proposals and deploy them over the course of a few hours.

In keeping with Ethereum’s ethos, the protocol was designed to cut out the middlemen: In this instance, the commercial bank or broker that consumers pay to trade and the investment bankers those middlemen pay to trade for the consumer. 

“I was always thinking about the traders that I knew in London and New York and the products that they used in the real economy,” Mannerings said. 

In addition to building out Vega, Mannerings said he hopes large countries like the United States develop more crypto integrations to the traditional economy. 

“If I want to hedge my U.S. dollar risk on Vega and I can do it for a fifth of the cost, that’s great, but I also need to make sure that I can get U.S. dollars into an appropriate stablecoin and take that position easily,” he said. “We have to chip away at that risk and make it less and less scary.”

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How the EEA Made Ethereum Palatable to Big Business

6 years 2 months ago

Related: Market Wrap: Bitcoin’s Price and Ether’s Dominance Sit at 2020 Highs

No matter what enterprise platforms look like in 15 years, there will be pieces that evolved from ‘industry coopetition’ conversations that never would have happened otherwise.

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Crypto Wallet Maker Ledger Loses 1M Email Addresses in Data Theft

6 years 2 months ago

Ledger said customer details have been stolen in a data breach that may well have been exploited for over two months.

  • In a note to clients Wednesday, CEO Pascal Gauthier said the French hardware wallet provider fell victim to a large scale data breach from an unauthorized third party.
  • The hacker, whose identity remains unknown, gained access to Ledger’s e-commerce and marketing database.
  • Customers affected include those who signed up to Ledger’s newsletter or receive promotional material.
  • Information stolen included email addresses, with a smaller “subset” of 9,500 customers also having their full names, postal addresses, and phone numbers exposed.
  • In total, the company estimates around one million email addresses have been stolen.
  • Payment information, passwords, and cryptocurrency funds have not been affected.
  • The data breach was first detected as part of a bug bounty program on July 14.
  • Ledger estimates the data may have been accessed from April until the end of June.
  • A Ledger spokesperson confirmed to CoinDesk the data breach has now been fixed.
  • The wallet provider has now alerted the French authorities and is filing a complaint with the public prosecutor.
  • Ledger said it has not found customer information disseminated online nor has it received any ransom demands.

See also: Coincheck Customers Fall Victim to Data Breach After Domain Account Error

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CoinDesk

Pantera Capital Leads $2.6M Seed Round for DEX Protocol Injective

6 years 2 months ago

Injective Protocol, a decentralized derivatives exchange protocol incubated by Binance Labs, has raised $2.6 million in a seed funding round.

  • Led by Pantera Capital, the round also saw Asia-based QCP Soteria, Axia8 Ventures and Boxone Ventures, Bitlink Capital and others participate, Injective announced Wednesday.
  • Injective Protocol sets out to resolve scalability issues and bottlenecks that can mar the user experience on decentralized exchanges (DEXs).
  • The project was one of eight inducted into the Binance Labs Incubation Program in 2018, with the mission to resolve some of the shortcomings DEXs face, such as high latency and poor liquidity.
  • Aside from the seed investment, the group of investors will also provide liquidity solutions for Injective and support its business developments and global brand recognition, according to the press release.
  • Pantera Capital partner Paul Veradittakit said the investment firm led the round because of its belief that Injective is a “strong contender” for expanding decentralized finance (DeFi) beyond Ethereum’s platform.
  • The funding comes as the protocol prepares for a mainnet launch and a new token to be issued in the latter half of 2020.

See also: Morgan Creek Leads $2.8M Seed Round for Crypto Insurance Upstart Evertas

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605 Days Later: How ArCoins Got the SEC Go-Ahead as an Ethereum-Traded Treasurys Fund

6 years 2 months ago

Convincing the U.S. Securities and Exchange Commission (SEC) that the Ethereum blockchain is an acceptable medium to store regulated investment funds was no easy task for Mason Borda of Tokensoft.

The CEO of this Bay Area tokenization firm spent over two years crusading for a peer-to-peer tradable fund. Borda developed compliance-appeasing token standards, hired regulatory veterans to lead his transfer agent subsidiaries and even moved Tokensoft into the same San Francisco high-rise as the SEC’s West Coast enforcement wing (albeit on a different floor).

The effort paid off earlier this month: In early July, the SEC granted a notice of effectiveness to ArCoin, a cryptographically-traded U.S. Treasury Fund pursued by digital asset manager Arca Labs and designed by Tokensoft. It’s the first Ethereum blockchain-native investment fund registered under the Investment Company Act of 1940 (a so-called ‘40 Act Fund).

Related: Arca’s Flagship Crypto Hedge Fund is Up 77% in 2020

Read more: Arca Labs Launches Ethereum-Based SEC-Registered Fund

ArCoin’s registration marks a shift in the regulator’s tolerance for public blockchain investment vehicles, Borda said. He and Arca CEO Rayne Steinberg both said ArCoins could light the way for future offerings with similarly decentralized structures. 

But regulatory filings capture just how hard-fought first that victory was. 

Long road

Arca signaled its earliest interest in offering a U.S Treasury Fund in an SEC filing from November 2018. Over the next 605 days, it filed volleys of prospectus amendments as nearly 10 different evolutions of what would eventually become ArCoins repeatedly hit a regulatory wall. 

Related: SEC, CFTC Hit Crypto App Abra With $300K in Penalties Over Illegal Swaps

Steinberg said there was no guarantee his firm’s costly regulatory campaign would ultimately prevail.

Tokensoft signed on as Arca’s tokenization specialist in July 2019, Borda told CoinDesk. Even then, a full year passed before ArCoin finally cleared that regulatory wall.

“This took a lot of backchanneling with the SEC,” Borda said.

10 floors apart

Borda said one benefit of running a compliance-focused tokenization firm from his high-rise in San Francisco’s Financial District is that SEC regulators asking questions about his proposals are just an elevator ride away.

“There was a case where I received a call the night before to do a presentation in the morning because the Crypto Czar was in town,” Borda said, explaining office proximity (Tokensoft is on floor 38, the SEC is on floor 28) made “meetings a lot more accessible.”

That can be handy when meeting topics are as potentially contentious and fraught as the marriage of public blockchains and regulated investment vehicles. The SEC has been reticent to approve crypto-tied proposals before, perhaps most visibly in its ongoing denial of a bitcoin ETF.

Read more: What to Make of the SEC’s Latest Bitcoin ETF Rejection

The particulars behind one crypto project’s failure before the SEC and another’s success are not interchangeable. For example, ArCoins do not represent an investment in the Ethereum blockchain, only a product (U.S. Treasurys) whose vehicle is traded on that blockchain. 

But Borda said a major obstacle in pushing through a tokenized ‘40 Act Fund were regulators’ misconceptions of how crypto markets function.

“There were a lot of preconceived notions just based on how the crypto space operates that we had to overcome: that these tokens are freely tradable, that there’s no way to control them,” Borda said. 

He said regulators “thought these securities worked like bitcoin.” He made clear to CoinDesk that they don’t. 

The SEC declined a request for comment.

Restricted transfers

Borda said Tokensoft and Arca had to prove ArCoin’s blockchain backend was far more restrictive, regulatable – and, well, permissioned – than the permissionless Ethereum mainchain this fund’s smart contract lives atop. Ethereum is the leading smart contract platform in the world.

Unlike the vast majority of Ethereum tokens (and also completely dissimilar to bitcoin and most every other crypto asset), ArCoins cannot just jump around from wallet to wallet, Borda said.

Two critical functions are executed before a transfer prevents ArCoins from flying freely between wallets: detectTransferRestriction and messageForTransferRestriction. They comprise the core of the ERC-1404 standard, a whitelist-focused derivation of the ubiquitous ERC-20 token standard.

Tokensoft spearheaded development of the open-source ERC-1404 with the express purpose of creating a token standard that could pass regulators’ muster. Its outcome, unveiled in September 2018, restricts token activity like peer-to-peer transfers and trading during lock-up periods, among other concerns. 

Read more: TokenSoft Launches Wallet Allowing Investors to Self-Manage Security Tokens 

Though these caveats seemingly run counter to the permissionless, borderless and stateless ideals of some corners of Crypto Twitter, Borda said they’re essential for working inside regulators’ demands – and even workable within the idealist’s framework.

“It is possible to build a token on a public blockchain and have it follow the most aggressive standards in the world,” he said.

ArCoins accomplishes this by checking intended recipients against a whitelist maintained by the fund’s transfer agent, Tokensoft subsidiary DTAC LLC, at the start of any transfer. Only investors who have passed AML and KYC protocols (and whose wallet addresses therefore appear on the whitelist) will receive their ArCoin.

Non-whitelisted addresses receive nothing – Borda said the transfer simply won’t go through. 

“The cool thing about having this on a blockchain is you can now prevent unauthorized transfers, the smart contract will just reject it,” Borda said.

Appealing to Arca

Arca CEO Steinberg said his firm tapped Tokensoft only after considering at least eight different tokenization tech providers. 

Steinberg said the only thing clear to Arca, a digital assets investment management firm, was that it didn’t want to build that solution in-house. Though Steinberg admitted Arca could have programmatically restricted smart contract transfers without ERC-1404, he said “that’s kind of reinventing the wheel that already exists for something like this.”

“Specialists are most likely going to do that better and come up with novel solutions like a standard than you will in building it yourself,” he said.

Steinberg sees this as a key value of utilizing standards like ERC-1404. His firm has now demonstrated that the SEC is comfortable granting effectiveness to a ‘40 Act investment vehicle that runs on ERC-1404.

ArCoin’s proving the concept may make what Steinberg described as the expensive, expansive and time-consuming procedure of bringing any investment product (and especially blockchain-based ones) past the SEC a little bit easier.

He noted that getting any product on the regulated market is never a sure thing, and recalled how “the vast majority of people” he spoke to after ArCoins’ green-light were shocked that the historically reticent SEC had allowed ArCoins to register.

“The goal of Arca is to become a multiproduct asset manager with multiple different wrappers like this,” he said.

Future groundwork

Borda chalked Tokensoft and Arca’s success in registering ArCoins to a confluence of compliance and structural factors – one major one was his tapping former SEC and CFTC regulator Alex Levine to head the legal team for Tokensoft’s affiliate transfer agent DTAC LLC. 

Borda is even more bullish about ERC-1404 and the future of token-based securities in the ‘40 Act Fund mode, especially its potential appeal to regulators, who could use the built-in transfer restrictions of smart contracts to their benefit: They won’t ever have to worry about unapproved transfers or bearer instruments falling into the wrong hands. 

Companies could also catch that upside, he said:

“This should prove to the companies out there that there is a path to have better compliance.”

Related Stories
CoinDesk

605 Days Later: How ArCoins Got the SEC Go-Ahead as an Ethereum-Traded Treasuries Fund

6 years 2 months ago

Convincing the U.S. Securities and Exchange Commission (SEC) that the Ethereum blockchain is an acceptable medium to store regulated investment funds was no easy task for Mason Borda of Tokensoft.

The CEO of this Bay Area tokenization firm spent over two years crusading for a peer-to-peer tradeable fund. Borda developed compliance-appeasing token standards, hired regulatory veterans to lead his transfer agent subsidiaries and even moved Tokensoft into the same San Francisco high-rise as the SEC’s West Coast enforcement wing (albeit on a different floor).

The effort paid off earlier this month: in early July, the SEC granted a notice of effectiveness to ArCoin, a cryptographically-traded U.S. Treasury Fund pursued by digital asset manager Arca Labs and designed by Tokensoft. It’s the first Ethereum blockchain-native investment fund registered under the Investment Company Act of 1940 (a so-called ‘40 Act Fund).

Related: Arca’s Flagship Crypto Hedge Fund is Up 77% in 2020

Read more: Arca Labs Launches Ethereum-Based SEC-Registered Fund

ArCoin’s registration marks a shift in the regulator’s tolerance for public blockchain investment vehicles, Borda said. He and Arca CEO Rayne Steinberg both said ArCoins could light the way for future offerings with similarly decentralized structures. 

But regulatory filings capture just how hard-fought first that victory was. 

Long road

Arca signaled its earliest interest in offering a U.S Treasury Fund in an SEC filing from November 2018. Over the next 605 days, it filed volleys of prospectus amendments as nearly 10 different evolutions of what would eventually become ArCoins repeatedly hit a regulatory wall. 

Related: SEC, CFTC Hit Crypto App Abra With $300K in Penalties Over Illegal Swaps

Steinberg said there was no guarantee his firm’s costly regulatory campaign would ultimately prevail.

Tokensoft signed on as Arca’s tokenization specialist in July 2019, Borda told CoinDesk. Even then, a full year passed before ArCoin finally cleared that regulatory wall.

“This took a lot of backchanneling with the SEC,” Borda said.

10 floors apart

Borda said one benefit of running a compliance-focused tokenization firm from his high-rise in San Francisco’s Financial District is that SEC regulators asking questions about his proposals are just an elevator ride away.

“There was a case where I received a call the night before to do a presentation in the morning because the Crypto Czar was in town,” Borda said, explaining office proximity (Tokensoft is on floor 38, the SEC is on floor 28) made “meetings a lot more accessible.”

That can be handy when meeting topics are as potentially contentious and fraught as the marriage of public blockchains and regulated investment vehicles. The SEC has been reticent to approve crypto-tied proposals before, perhaps most visibly in its ongoing denial of a bitcoin ETF.

Read more: What to Make of the SEC’s Latest Bitcoin ETF Rejection

The particulars behind one crypto project’s failure before the SEC and another’s success are not interchangeable. For example, ArCoins do not represent an investment in the Ethereum blockchain, only a product (U.S. Treasuries) whose vehicle is traded on that blockchain. 

But Borda said a major obstacle in pushing through a tokenized ‘40 Act Fund were regulators’ misconceptions of how crypto markets function.

“There were a lot of preconceived notions just based on how the crypto space operates that we had to overcome: that these tokens are freely tradeable, that there’s no way to control them,” Borda said. 

He said regulators “thought these securities worked like bitcoin.” He made clear to CoinDesk that they don’t. 

The SEC declined a request for comment.

Restricted transfers

Borda said Tokensoft and Arca had to prove that ArCoin’s blockchain backend was far more restrictive, regulatable – and, well, permissioned – than the permissionless Ethereum mainchain this fund’s smart contract lives atop. Ethereum is the leading smart contract platform in the world.

Unlike the vast majority of Ethereum tokens (and also completely dissimilar to bitcoin and most every other crypto asset), ArCoins cannot just jump around from wallet to wallet, Borda said.

Two critical functions are executed before a transfer prevents ArCoins from flying freely between wallets: detectTransferRestriction and messageForTransferRestriction. They comprise the core of the ERC-1404 standard, a whitelist-focused derivation of the ubiquitous ERC-20 token standard.

Tokensoft spearheaded development of the open-source ERC-1404 with the express purpose of creating a token standard that could pass regulators’ muster. Its outcome, unveiled in September 2018, restricts token activity like peer-to-peer transfers and trading during lock-up periods, among other concerns. 

Read more: TokenSoft Launches Wallet Allowing Investors to Self-Manage Security Tokens 

Though these caveats seemingly run counter to the permissionless, borderless and stateless ideals of some corners of Crypto Twitter, Borda said they’re essential for working inside regulators’ demands – and even workable within the idealist’s framework.

“It is possible to build a token on a public blockchain and have it follow the most aggressive standards in the world,” he said.

ArCoins accomplishes this by checking intended recipients against a whitelist maintained by the fund’s transfer agent, Tokensoft subsidiary DTAC LLC, at the start of any transfer. Only investors who have passed AML and KYC protocols (and whose wallet addresses therefore appear on the whitelist) will receive their ArCoin.

Non-whitelisted addresses receive nothing – Borda said the transfer simply won’t go through. 

“The cool thing about having this on a blockchain is you can now prevent unauthorized transfers, the smart contract will just reject it,” Borda said.

Appealing to Arca

Arca CEO Steinberg said his firm tapped Tokensoft only after considering at least eight different tokenization tech providers. 

Steinberg said that the only thing clear to Arca, a digital assets investment management firm, was that it didn’t want to build that solution in-house. Though Steinberg admitted Arca could have programmatically restricted smart contract transfers without ERC-1404, he said “that’s kind of reinventing the wheel that already exists for something like this.”

“Specialists are most likely going to do that better and come up with novel solutions like a standard than you will in building it yourself,” he said.

Steinberg sees this as a key value of utilizing standards like ERC-1404. His firm has now demonstrated that the SEC is comfortable granting effectiveness to a ‘40 Act investment vehicle that runs on ERC-1404.

ArCoin’s proving the concept may make what Steinberg described as the expensive, expansive and time-consuming procedure of bringing any investment product (and especially blockchain-based ones) past the SEC a little bit easier.

He noted that getting any product on the regulated market is never a sure thing, and recalled how “the vast majority of people” he spoke to after ArCoins’ green-light were shocked that the historically reticent SEC had allowed ArCoins to register.

“The goal of Arca is to become a multiproduct asset manager with multiple different wrappers like this,” he said.

Future groundwork

Borda chalked Tokensoft and Arca’s success in registering ArCoins to a confluence of compliance and structural factors – one major one was his tapping former SEC and CFTC regulator Alex Levine to head the legal team for Tokensoft’s affiliate transfer agent DTAC LLC. 

Borda is even more bullish about ERC-1404 and the future of token-based securities in the ‘40 Act Fund mode, especially its potential appeal to regulators, who could use the built-in transfer restrictions of smart contracts to their benefit: They won’t ever have to worry about unapproved transfers or bearer instruments falling into the wrong hands. 

Companies could also catch that upside, he said:

“This should prove to the companies out there that there is a path to have better compliance.”

Related Stories
CoinDesk

Australian Crypto Exchanges Partner With Koinly to Simplify Tax Reporting for Users

6 years 2 months ago

Three of Australia’s digital asset exchanges have teamed up with crypto tax software provider Koinly following the Australian Tax Office’s (ATO) crackdown on local investors.

  • Announced Wednesday, Cointree, CoinJar and Swyftx have begun offering their users the ability to link their accounts and public wallet addresses to Koinly's service, providing investors with a capital gains tax report.
  • Citing the complexity of preparing crypto transactions reports for the ATO, CoinJar’s CEO Ashter Tan said users’ trading data would be processed into an “ATO-friendly” report in minutes.
  • Users of the exchanges can easily integrate their trading history, providing an instant profit and loss calculation that can be given to an accountant at tax time, Swyftx business development manager Tommy Honan said.
  • Koinly’s product further allows users to save time and money costs compared to manually preparing reports, according to the announcement.
  • The ATO began issuing warnings to Australian residents in March of this year, reminding up to 350,000 individuals of their tax obligations when trading in digital assets.

See also: Australian Payment Card Company to Trial Micropayments Using Hedera Hashgraph

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CoinDesk

Market Wrap: Bitcoin’s Price and Ether’s Dominance Sit at 2020 Highs

6 years 2 months ago

Bitcoin’s price is at its 11-month high as volatility bounces back up. Meanwhile, ether’s dominance has spiked on continued growth in decentralized finance (DeFi).

  • Bitcoin (BTC) trading around $10,998 as of 20:00 UTC (4 p.m. ET). Gaining 2.1% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $10,573-$11,422
  • BTC above 10-day and 50-day moving averages, a bullish signal for market technicians.

The price of bitcoin hit another 2020 high Tuesday, reaching $11,422 on spot exchanges like Coinbase. The last time the price of the world’s oldest cryptocurrency hit that level on Coinbase was Aug. 12, 2019. 

Read More: Bitcoin Futures Volume Surges 186% as Price Hits $11K

Related: How Real Is Bitcoin’s Rally? 8 Interpretations of Bitcoin’s Massive Surge

“Bitcoin has pushed decisively through not only psychological resistance of $10,000 but also a key level near $10,055,” said Katie Stockton, an analyst at Fairlead Strategies. However, she is skeptical the price can stay over $11,000. 

“There are some signs of upside exhaustion on this push higher, so we would be sure to await confirmation of the breakout before adding exposure to bitcoin. This would occur on consecutive weekly closes above $10,055,” she added. 

“The Fear and Greed Index is in the ‘extreme greed’ zone, moving towards the overbought level,” noted Konstatine Kogan of cryptocurrency fund of funds BitBull Capital. “The first support is located at the level of $10,000. If bitcoin falls below this mark, then there is a possibility of a subsequent decline,” he added. 

Not all stakeholders are suspicious of the bitcoin market’s price run-up. One positive for traders is that volatility is making a comeback, according to data from aggregator CryptoCompare. 

Related: Bitcoin’s Latest Rally May Have Staying Power, Exchange Flows Suggest

“Historical bitcoin volatility has bounced from its lowest point since March 2019,” said James Li, research analyst for CryptoCompare. “The question is whether this is just a temporary bounce or are we heading back to a historical, more volatile BTC market,” he added. 

Read More: Bitcoin’s Latest Rally May Have Staying Power, Exchange Flows Suggest

Ethereum dominance hits 2020 high

The second-largest cryptocurrency by market capitalization, ether (ETH), was down Tuesday, trading around $318 after slipping 1.5% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Read More: Soaring DeFi Usage Drives Ethereum Contract Calls to New Record

The dominance of ether in the cryptocurrency market crossed 12% Monday, its highest point in 2020, according to data calculated by real-time charting firm TradingView. Dominance, or the market cap as a percentage of the entire cryptosphere, is a measure traders use to quickly get a sense of a cryptocurrency’s importance relative to the broader digital currency market. Although ether’s dominance has dipped below 12% Tuesday, it’s still higher than it has been all year; the last time ether hit 12% dominance was back in May 2019.

“DeFi users can access that market using stablecoins. But clearly the main core asset fueling the DeFi run is still ether, hence its recent dominance,” said Jean-Marc Bonnefous, managing partner for Tellurian Capital, which has been investing in crypto projects since 2014.“The recent development and ramping up of new and better DeFi applications such as Compound, Aave and Balancer is clearly generating more traction for Ethereum,” he added. 

Read More: Staking on Ethereum 2.0 Takes First Step With Test System for Validators

Other markets

Digital assets on the CoinDesk 20 are mostly flashing green Tuesday. Notable winners as of 20:00 UTC (4:00 p.m. ET): 

Read More: Deribit Reports Daily Record $539M of Bitcoin Options Traded

Notable losers as of 20:00 UTC (4:00 p.m. ET): 

Read More: Tetras Capital Shuts Down Crypto Hedge Fund After 75% Loss

Equities:

Read More: One Billion, Two Billion, Three Billion, Four? DeFi Knocking on TradFi’s Door

Commodities:

  • Gold is up 0.75% at $1,956 as of press time after hitting an intraday high of $1,980.
  • Oil is down 1.7%. Price per barrel of West Texas Intermediate crude: $40.94

Read More: Expectations for Bitcoin Gains Keep Lid on Futures Contracts Liquidations

Treasurys:

  • U.S. Treasury bonds all slipped Tuesday. Yields, which move in the opposite direction as price, were down most on the two-year, in the red 11.7%.

Read More: The Dollar Drop May Have Helped Push Bitcoin Past $11K

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CoinDesk

Bitcoin’s Latest Rally May Have Staying Power, Exchange Flows Suggest

6 years 2 months ago

Bitcoin is currently trading above $10,000, but is the latest move into five figures here to stay? Data suggests this rally might have legs.

The leading cryptocurrency has failed a number of times during the last 12 months to keep gains above the $10,000 mark. But this time may be different. Consider the flow of bitcoins and stablecoins in and out of cryptocurrency exchanges observed on Monday, suggesting the latest price breakout may persist.

The inflow of bitcoins into exchanges increased by 68,970 BTC to 130,039 BTC on Monday – the largest single-day rise in 134 days – as the cryptocurrency jumped over 10% to $11,315 to reach its highest level in nearly 12 months, according to Chainalysis, a blockchain intelligence firm.

Related: Fireblocks Claims Exchange Program Enables Zero-Confirmation Crypto Deposits

In other words, as the cryptocurrency rallied to multi-month highs, some investors moved their coins to exchanges. Investors typically transfer coins from their wallets to exchanges when they lack confidence in the rally or resources to hold coins for long-term and want to liquidate their investments. 

As such, one may argue that additional supply has poured into exchanges. While that seems to be the case, the buying pressure, as represented by the inflow of the largest stablecoin tether (USDT) into exchanges, has also strengthened. 

See also: Tether’s Supply on Compound Jumps to Over $224M in a Week

Stablecoins are cryptocurrencies that peg their market value to some external reference, usually the U.S. dollar. Tether and other major stablecoins are widely used to fund cryptocurrency purchases and their market capitalization has grown enormously this year. Tether, the largest dollar-backed stablecoin, crossed a $10 billion market cap earlier this month.

Related: Bitcoin Futures Volume Surges 186% as Price Hits $11K

Tether inflows surged by over 440 million USDT to 726 million USDT on Monday, as per Chainalysis. “There was $726 million worth of demand for bitcoin entering into exchanges yesterday to balance the $1.3 billion worth of bitcoin looking to sell,” Philip Gradwell, chief economist at Chainalysis, tweeted early Tuesday. 

And while the inflow of tether was less than that of bitcoin, there are other means to buy cryptocurrencies. “There will also be demand from fiat,” Gradwell noted. 

Thus flows suggests the buying pressure may be strong enough to absorb the extra supply that has come onto exchanges and bitcoin may finally succeed in establishing a strong foothold above $10,000.

At press time, bitcoin was changing hands near $11,140, having tested dip demand with a drop to levels below $10,600 during the European trading hours. 

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