CoinDesk Crypto

Cryptocurrency traders don’t seem to care that Goldman Sachs is such a bitcoin hater. 

At least, that’s the signal markets are sending. 

Bitcoin prices have surged since the Wall Street heavyweight’s money-management division declared in a presentation this week that the cryptocurrency is “not a suitable investment for our clients,” merely a beneficiary of a “mania” worse than the infamous run on Dutch tulips in the 1600s. 

Related: Bitcoin Rally Falters as Stocks Drop Ahead of Trump’s China Speech

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The bullish market reaction shows crypto traders largely shrugged off Goldman’s bearish commentary, doubling down on bitcoin while spewing vile condemnations and ridicule of the analysis on Twitter.

On Thursday, bitcoin rose more than 2% to about $9,400. The price is now up 33% in 2020, versus a 6.2% decline on the year for the Standard & Poor’s 500 Index of large U.S. stocks. Goldman’s own shares are down 12%.

One cryptocurrency trader even speculated Goldman may have weighed in on bitcoin because the Wall Street firm’s clients were begging to know whether they should jump in – or put another way, if they were at risk of missing out on future rallies. 

Related: Blockchain Bites: BlockTower’s Returns, Minecraft Goes Blockchain, ID2020 Shakeup

The global backdrop is that investors are desperately seeking ways to make money these days, with interest rates on U.S. Treasury bonds close to historic lows. Buoyant stock-market valuations don’t seem to reflect the economic devastation from the coronavirus. (A report Thursday showed more than 40 million jobless claims have been filed since early March.)       

Bitcoin might be getting a closer look from big money managers and rich families following reports earlier this month that the legendary hedge-fund manager Paul Tudor Jones II is now betting on the asset. Investors also might be looking at the year-to-date returns and wondering why Goldman didn’t steer them toward bitcoin sooner. 

“Goldman Sachs would not have put together this fancy presentation without demand or questions about crypto from the clients,” said Denis Vinokourov, head of research at the London-based digital-asset firm Bequant.

Patrick Lenihan, a Goldman spokesman, said the presentation “speaks for itself,” declining to comment further.

Invented just 11 years ago, bitcoin has already smeared egg on a lot of prominent naysayers’ faces. Past performance, of course, is no guarantee of future success. But the list of casualties includes the billionaire investor Warren Buffett, who in February described the cryptocurrency as having “no value,” only to see the shares of his own conglomerate, Berkshire Hathaway, tumble 18% this year as bitcoin rose.  

It goes without saying, as Goldman’s investment analysts pointed out, that bitcoin prices can be extremely volatile.

That might just be the nature of new technologies: Volatility isn’t uncommon among many small-cap tech companies whose stocks were taken public by investment bankers working for Goldman and its Wall Street competitors.

Amazon.com shares tumbled 80% amid the dot-com crash of 2000 – long before the internet-commerce giant eclipsed department stores including Sears, which filed for bankruptcy in 2018. Another U.S. department store chain, J.C. Penney, filed for bankruptcy protection earlier this month, as sales diminished because of coronavirus-related lockdowns.

But many big, sophisticated investors are comfortable with risk, as long as the potential rewards look attractive enough; long-term growth is the goal.

On that count, bitcoin’s market capitalization has grown 11-fold since the end of 2016 to $173.7 billion. Over the same period, Goldman’s own market cap has fallen to $69 billion from about $95 billion.

Jill Carlson, co-founder of the Open Money Initiative and an investor in early-stage startups with Slow Ventures, wrote Thursday in an op-ed for CoinDesk that Goldman’s report contained so many flaws that “it’s not worth detailing every misconception or failed bit of logic.” According to her LinkedIn profile, she worked as a credit trader at Goldman in the early 2010s.

That representatives have not adequately articulated the “defining attributes and uses of this paradigm-shifting technology” might be a fault of the crypto industry, Carlson added.

Facebook CEO Mark Zuckerberg, addressing questions about the proposed libra stablecoin at an annual shareholder meeting on Wednesday, noted how slow the traditional financial system had been to upgrade the plumbing behind payments.

The infrastructure around payments “hasn’t been updated in a very long time,” Zuckerberg said.

The broader question might be whether Goldman risks falling behind a fast-evolving digital-asset industry that, by some accounts, aims to disrupt Wall Street and potentially displace it.

Or if the firm’s clients risk missing out on a big rally, with quick-to-pivot Wall Street eventually embracing cryptocurrencies as a promising asset class. 

Those clients have certainly missed out on the rally so far this year. 

BTC: Price: $9,394 (BPI) | 24-Hr High: $9,621 | 24-Hr Low: $9,008

Trend: While bitcoin has gained over 8% so far this week, it’s still lacking clear directional bias. 

Prices are yet to move out of a symmetrical triangle pattern on the daily chart represented by trendlines connecting the May 10 and 25 lows, and May 7 and 18 highs.

A break above the upper end of the contracting triangle, currently at $9,780 would imply a continuation of the rally from the March low of $3,867 and could lead to a convincing move to the February high of $10,500. 

On the other hand, a UTC close below the lower end of triangle at $8,782 would confirm a bullish-to-bearish trend change. That could cause more sellers to join the market, leading to a deeper price decline toward $8,000. 

Both the falling wedge breakout and invalidation of a lower-highs setup confirmed earlier this week on the four-hour chart indicate scope for a rise to the triangle resistance at $9,780. Further, demand for bearish bets or put options is weakening, as evidenced by a recent decline in the one-month put-call skew from 22% to 6%. 

On-chain activity suggests the big players are accumulating. The number of addresses holding at least 100 BTC rose as prices dipped from $10,000 to $8,630 in the seven days to May 25, according to data provided  by Glassnode. That may be a sign many investors are long-term bullish. 

At press time, bitcoin is trading near $9,400, having risen from $8,800 to $9,620 in the last two days. 

• What Goldman Gets Wrong About Bitcoin (From Someone Who Used to Work There)
• Bitcoin News Roundup for May 28, 2020

Bitcoin’s bulls are taking a breather amid jitters in the traditional markets over rising tensions between the U.S. and China. 

The world’s biggest cryptocurrency is trading near $9,400 at press time, having posted an eight-day high of $9,620 on Thursday. Prices have gained 8% so far this week, according to CoinDesk’s Bitcoin Price Index. 

While bitcoin looks to be consolidating on recent gains, major European stock markets are flashing red for the first time this week. Leading the way lower is Germany’s DAX, down 1.5% on the day, followed by France’s CAC, which is reporting a 1% decline. Across the pond, futures tied to Wall Street’s equity index S&P 500 are down 0.5%, as per Investing.com.

Related: First Mover: Bitcoin Rally Shows Traders Don’t Care That Goldman Hates Their Asset Class

Markets look to have become cautious ahead of President Trump’s response to China’s decision to implement a national security law in Hong Kong, putting the jurisdiction’s autonomy in doubt. 

“We’ll be announcing what we’re doing tomorrow (Friday) with respect to China. And we are not happy with China. We are not happy with what’s happened,” Trump told reporters on Thursday. Trump warned earlier this week it would impose sanctions on China if the law is introduced. 

The expectation is Trump will announce some symbolic sanctions against individuals and companies. That said, with the presidential elections due in November, a bigger action cannot be ruled out. The resulting geopolitical tensions could bode well for bitcoin as many analysts and investors consider it a safe haven asset. 

“I expect serious anti-Chinese rhetoric in the coming days/weeks/months as Trump tries to use nationalism/protectionism and anger towards China/COVID as a major catalyst for support,” Phillip Gillespie, CEO of B2C2 Japan, told CoinDesk in an email. “I am personally bullish [on bitcoin] due to a combination of excess stimulus from all the major central banks (ample liquidity in the system) and pick-up in geopolitical risks.”

Related: Market Wrap: Short Seller Liquidations Help Push Bitcoin Beyond $9,500

Meanwhile, analysts at Stack, a provider of cryptocurrency trackers and index funds, believe the geopolitical tensions have created a “perfect storm” for the cryptocurrency. 

In fact, they suggested in a weekly report on Thursday that the cryptocurrency’s week-to-date gains are the result of increased haven demand fueled by the U.S.-China tensions and the slide in the yuan. 

“Previously back in 2019, similar fears have driven Chinese investors to move their onshore RMB (China’s yuan) out of the country, where speculators reckon a part of that has trickled into Bitcoin given the increased demand over the same period,” according to the report. “We are observing similar price action currently as Bitcoin has rallied 6.2% since, from $8,700 to $9,250 level, once again breaking out from its 2019-2020 daily trendline.“

Also read: Slipping Chinese Yuan May Boost Bitcoin Price, Past Data Suggests

It remains to be seen if the geopolitical tensions escalate and lead increased haven flows into bitcoin. The cryptocurrency did rise by over 30% in the first half of January when Iran and the U.S. conducted airstrikes on their respective bases in Iraq, injecting geopolitical uncertainty into the financial markets.

Some might argue that bitcoin failed to perform as a haven asset during the height of the coronavirus crisis in March. While that is true, almost every asset, including classic safe haven asset gold, took a beating back then as investors fled for cash. 

Aside from President Trump’s China speech, bitcoin analysts are also keeping an eye on the May expiry of cash-settled futures and options contracts listed on the Chicago Mercantile Exchange (CME). 

“23k bitcoin equivalent futures and 10k bitcoin options are set to expire this Friday on CME. Approx 50% of open interest for each product,” crypto derivatives research firm Skew tweeted earlier this week.

Price volatility tends to pick up around the time of expiry of futures and options activity due to increased trading activity.

However, CME’s contribution to total futures open interest listed across the globe is only 11%, according to Skew data. Similarly, the Chicago exchange’s contribution to total options open interest is also quite low, so the expiry – due Friday at 15:00 UTC – may not have a major influence on prices. 

Disclosure: The author holds no cryptocurrency at the time of writing.

• Bitcoin News Roundup for May 28, 2020
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Gibraltar Stock Exchange (GSX) Group’s digital securities platform has tokenized the shares of a client for the first time.

The recently launched blockchain-based venue, GRID, allows for the tokenization of securities using GSX Group’s native STACS network. In this inaugural issuance, shares for adtech firm tribeOS were created and distributed digitally.

STACS is a scalable digital ledger network layer that “stacks on top of existing financial institutions” and facilitates tokenization of the financial services industry, GSX Group said in a press release Wednesday.

Related: ASX’s Long-in-the-Works DLT Plan on Ice Amid Coronavirus Concerns

“We are excited to have completed the successful digitalization of tribeOS’ shares,” said Nick Cowan, GSX Group CEO. “TribeOS is the first issuer to utilize our GRID venue, and we look forward to welcoming further pioneering companies who wish to push the boundaries of innovation and accelerate the adoption of blockchain within the capital markets.”

With blockchain initiatives like GRID and STACS, GSX Group said it’s working to help move the capital markets away from “the cumbersome and costly legacy infrastructure” and make traditional financial structures more interoperable.

“Our ambition is to deliver dynamic cost-saving solutions, broaden the accessibility of capital, and help issuers in terms of speed-to-market,” Cowan said.

See also: National Stock Exchange of Australia Plans DLT Platform to Compete With ASX

Related: Asset Ratings Giant Morningstar Takes First Plunge Into Blockchain Securities

Last year, the Gibraltar Stock Exchange began allowing financial firms to list blockchain-based securities on its GSX Global Market platform. It said then that its existing regulatory permissions from the Gibraltar Financial Services Commission (GFSC) cover the use of blockchain or distributed ledger technology.

“Using the GRID to create and deploy our shares in digital form allows for a quick and cost-effective route into the digital space,” tribeOS CEO Matt Gallant said.

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Nuggets, a digital identity and payments platform, has developed a way to accept deliveries without needing a physical signature to combat a spike in fraud and chargebacks during the COVID-19 pandemic.

Using biometrically verified contactless delivery technology secured with blockchain technology, the London-based firm wants to equip consumers with the means to provide verified proof of identification while still maintaining the social distancing required under coronavirus measures.

Nuggests says the contact-free signing system would help counter a rise in delivery fraud and chargebacks amid the pandemic. Since customers no longer have to sign for deliveries in order to maintain distancing, fraudulent chargebacks are skyrocketing. Citing figures from the U.K., Nuggets also said failed deliveries have also cost courier firms as much as £1.6 billion (US$2 billion).

Related: Telegram CEO Donates 10 BTC to Pandemic Relief Effort

“Merchants are so overstretched with increased orders, staffing issues, and supply chain fulfilment problems that having to dispute chargebacks ends up at the bottom of the list,” said Nuggets CEO and co-founder Alastair Johnson.

See also: FATF Releases Guidance on Global Digital IDs as Use Cases Grow

During a delivery, the courier would use an app to scan the receiver’s digital ID (issued by Nugget) to verify they are indeed the customer that ordered the item(s).

When the customer is successfully identified, the parcel is delivered and a proof of delivery is immediately sent to the company at which the purchase was made. Nuggets said the system “guarantees verified delivery of a package to the right recipient,” while using a blockchain allows for the secure communication of customers’ biometric and payment information.

Related: $103M Bailout Denied for Coronavirus-Hit Firms in Switzerland’s ‘Crypto Valley’

E-commerce has seen a huge boost in recent months, due largely to coronavirus stay-at-home orders. Global courier DHL “has seen volume growth of more than 36% in domestic volume and 28% cross border volume from the daily averages seen in February,” industry publication Aircargo News reported on May 14.

See also: Immunity Passes Explained: Should We Worry About Privacy?

“The combination of the astronomical costs facing our eCommerce businesses, from fraudulent chargebacks to failed deliveries and fake user reviews, big savings can be delivered by having Nuggets integrated, said Johnson.

CoinDesk reached out to ask if the firm when its technology might see real-world adoption, but did not immediately hear back.

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Receiving regulator approval to operate in Gibraltar is anything but easy, crypto derivatives exchange ZUBR told CoinDesk.

ZUBR, which began trading in March, said Wednesday it had received in-principle approval from the Gibraltar Financial Services Commission (GFSC) as a Distributed Ledger Technology (DLT) provider. The approval is on the condition the exchange addresses some of the regulator’s feedback by the time it gets its license.

But just getting to this point has proven difficult.

Related: Number of Bitcoins on Crypto Exchanges Hits 18-Month Low

“From day one we realized hundred percent … that we would have to sacrifice a lot to get into the regulated space,” co-founder Oleg Ravnushkin said. Even before the regulator provided feedback, ZUBR capped its maximum leverage at 20x and introduced high entry barriers to ensure it only served professional, not retail, clients.

The GFSC has offered DLT licenses since the beginning of 2018. Based on nine very general principles – including one clause that an applicant “must conduct its business with honesty and integrity” – the license provides a broad-stroke and flexible regulatory framework for any activity that comes under the umbrella of DLT, such as to transmit or store value on behalf of others.

Around a dozen companies have a Gibraltar DLT license, including the blockchain subsidiary for the Gibraltar Stock Exchange. Ravnushkin said there’s probably another twelve more entities going through the application process, alongside themselves.

See also: Crypto Derivatives Platform Gets Nod From London Stock Exchange’s Software Tester

Related: India’s Central Bank Removes Lingering Confusion Over Banking for Crypto Firms

Nine principles may seem like an overly simplistic framework, but ZUBR disagrees.

“It took us a preliminary application to go through to a full application stage; to go through to a set of interviews with key [GFSC] personnel, [then] a set of presentations of our business model, and a number of rounds of follow-up discussions and additional requests made by the regulator to have clarity on very specific questions,” ZUBR’s chief legal officer, Olga Okuneva, said.

“It’s not that straightforward to just come and get a Gibraltar license … you cannot just, you know, switch to Gibraltar,” Ravnushkin said. “We had to be comfortable with a lot of additional, you know, checks and outsourcing providers to make sure that the trading was transparent and that the market structure was solid so there’s no manipulation whatsoever.”

“It’s going to be 10 principles pretty soon,” he added.

Neither Ravnushkin nor Okuneva described the regulatory feedback as “changes,” but rather “more of a fine-tuning of something we have discussed thoroughly with the regulator,” Okuneva said.

Ravnishkin said this could include relocating more of their staff to Gibraltar, but added: “I cannot obviously comment on the exact nature of this.”

See also: Hong Kong’s First Regulator-Approved Bitcoin Fund Targets $100M Raise

But Ravnishkin confirmed none of the changes will affect its core business model. That’s probably a relief. ZUBR forked out £30,000 (~$37,000) just for the application fee for the category three license, which covers companies dealing with complicated assets, including crypto derivatives.

Having first submitted its license more than 12 months ago, Ravnushkin reckons ZUBR will still have to wait for a few months before it receive its full license.

“We’d love to have it tomorrow,” he said.

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Twetch is off Twitter.

The Twitter account of social media platform Twetch – run on the Bitcoin SV (BSV) blockchain – was suspended Thursday without warning, according to Twetch co-founder Josh Petty. (As of press time, it was restored but stripped of its follower count.)

Twetch positions itself as an alternative to the platform it was deplatformed from, actively marketing itself against the San Francisco firm run by Bitcoin enthusiast Jack Dorsey. Petty said the application maintains censorship resistance by archiving conversations on the BSV blockchain.

Related: Italy’s Leading Wire Service Is Using Ethereum to Thwart Copycats

In fact, Twetch posted a meme aimed at Dorsey for censoring conversations on the platform mere hours before its account was suspended.

In the meantime, Twetch has launched an alternative account and will appeal the decision. If Twetch wins its appeal, Petty said it could be hours to days before the account is back up and running due to cache issues with Twitter’s infrastructure. 

The deplatforming comes after President Donald Trump issued an executive order Thursday regarding the use of federal oversight of social media platforms such as Twitter and Facebook. 

Trump’s order was spurred by a “fact-check” performed on his tweet concerning the use of mail-in ballots for elections.

Related: Canadians Get US Jail Time for Stealing 23 Bitcoin in Twitter Scam

Petty said Twitter may have suspended the firm’s account due to heightened pressure on social media accounts following Trump’s threat of “nationalizing” platforms.

It may have been a case of “getting caught in the algorithms,” Petty said.

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Bitcoin broke through $9,500 Thursday and those short sellers betting on lower prices got liquidated by some crypto derivatives exchanges. That also helped push the world’s oldest cryptocurrency higher.    

As of 20:50 UTC (4:50 p.m. ET), bitcoin (BTC) was trading at $9,447, up 2.9% over the previous 24 hours. Trading seems to support a higher upward climb with a large session of buying around 12:00 UTC (8 a.m. ET) briefly pushing price to as high as $9,526 on exchanges including Coinbase. Bitcoin’s price continued its rising trend from Wednesday, well above its 10-day and 50-day moving averages, a technical analysis signal of bullish sentiment. 

“A breakout above $10,055 would be a catalyst for significant upside in our work, and support is now defined by the 200-day moving average, which is now at $8,377,” said Katie Stockton, an analyst that covers global markets at Fairfield Strategies. 

Related: Bitcoin News Roundup for May 28, 2020

Stockton doesn’t see the buying momentum for bitcoin slowing down anytime soon. “We think intermediate-term trend-following indicators are pointing higher,” she told CoinDesk.

Large price movements in the bitcoin spot market can often be attributed to the crypto derivatives markets. The derivatives exchange BitMEX, for example, automatically liquidates both long and short seller positions when price begins to quickly move. Bitcoin’s upward trend is being helped in this instance by short sellers getting squeezed out, which triggers automatic buy orders that help move prices higher. 

Read More: Bitcoin Price Tests $9.4K as Demand for Put Options Drops

“There are definitely topside liquidations on BitMEX, and more than on average,” said Vishal Shah, an options trader and founder of derivatives exchange startup Alpha5. Over the past 24 hours, buy liquidations are at $39 million on BitMEX, and have far outpaced the $4 million in sell liquidations. 

Related: Bitcoin Price Tests $9.4K as Demand for Put Options Drops

Since May 25, sell liquidations (shown in red in the above chart) have started to abate as buy liquidations grow (shown in blue).

The influence of BitMEX on the markets has been controversial as the exchange’s $700 million in liquidations during March’s precipitous price drop was considered a huge factor in downward selling pressure at the time. 

Read More: Genesis Hires Ex-Galaxy Digital Staffer to Run New Derivatives Trading Desk

However, Shah says BitMEX’s influence, while still important, is not what it was prior to March. After hitting a high of $1.1 billion in open interest in February, it has not recovered since the March 12 crash and now stands around $630 million. “I do think BitMEX is turning more into a fractal of the market than the anchor. Open interest is definitely in osmosis.”

Along with short squeezes, it’s obvious more people looking to buy bitcoin are helping the price appreciation, according to Rupert Douglas, head of institutional sales for cryptocurrency asset manager Koine. Douglas senses spot exchanges could continue to be heavy on buy orders for bitcoin. “I think the big rally is about to start. I don’t think we are going to trade below $9,000 again,” he said.

However, not everyone is bullish as some traders are planning for downside price action in bitcoin to return at some point. A consistent price increase simply isn’t the dynamics of a market, and crypto is no different, said Josh Rager, a bitcoin trader and founder of educational platform Blackroots. 

“What we’re seeing with bitcoin is a two-month run-up with a potential pullback right now, reversion to the mean and price heading back down to $7,000 to $8,000 wouldn’t be out of the question,” Rager said. “In fact, it would be healthy after running up in a two month period.” 

Digital assets on CoinDesk’s big board are all in the green Thursday. Ether (ETH), the second-largest cryptocurrency by market capitalization, gained 3.8% in 24 hours as of 20:50 UTC (4:50 p.m. ET). 

Cryptocurrency winners on the day include cardano (ADA) bouncing a healthy 14%, qtum (QTUM) climbing 2.8% and neo (NEO) in the green 2.4%. All price changes were as of 20:50 UTC (4:50 p.m. ET) Thursday.

Read More: Chainlink ‘Marines’ Are HODLing and Here’s Why You Should Care

In the commodities sector, oil is making major gains, climbing 4.3% with a barrel of crude at $33.62 as of press time. 

Gold traded flat on the day, with the yellow metal gaining less than a percent and closing at $1,718 at the end of New York trading. 

The equities markets had a good day as the negative impact of coronavirus on the economy seems to be decreasing, at least in investors’ eyes. In the United States, the S&P 500 index ended trading flat, down less than a percent. In Europe, the FTSE Eurotop 100 index ended trading up 1.5%. Japan’s Nikkei 225 of large companies ended the day up 2.3%, with the Asian index hitting its highest close since February 27. 

U.S. Treasury bonds were mixed on the day. Yields, which move in the opposite direction as price, were down most on the two-year bond, in the red 8%.

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BitClave, a California startup whose Ethereum-based search engine raised $25.5 million in a 2017 token sale, will pay back its 9,500 investors in a settlement with the U.S. Securities and Exchange Commission (SEC).

The settlement ended BitClave’s court saga almost as soon as it began. Prosecutors with the SEC announced their charges Thursday in tandem with an order that called BitClave’s Consumer Activity Token (CAT) sale an unregistered initial coin offering (ICO).

BitClave neither admitted nor denied that it broke the law when it sold CAT in 2017. In exchange, the “blockchain services firm” will return all $25.5 million to the investors and pay nearly $4 million in additional fines and fees. 

Related: US Court Freezes Assets Linked to Alleged $9M ICO Scam

CoinDesk reported in 2017 that CAT sales were meant to boost awareness of BitClave’s data-centric search engine alternative, the BitClave Active Search Ecosystem (BASE). At the time, founder Alex Bessonov described BASE as a transparent pairing of retailers and search engines. CAT was the carrot incentivizing BASE usage, Bessonov said. 

The SEC, however, called CAT something else: an investment contract.  

Read more: US Court Freezes Assets Linked to Alleged $9M ICO Scam

Thursday’s SEC order said CAT tokens were investment contacts because investors had a reasonable expectation CAT would appreciate in value as BitClave matured. The order quotes BitClave’s white paper:

Related: Telegram Quits Court Fight With SEC Over TON Blockchain Project

“As more service providers join, the amount of CATs required for an equivalent service will gradually decrease, corresponding to a CAT value increase.”

As per the settlement, BitClave will transfer 1.32 billion uncirculated CAT for “permanent disabling” and request that exchanges delist it. CoinMarketCap showed YoBit.net as the only exchange carrying CAT at press time Thursday. The data site lists CAT’s market cap at $76,753.

“Issuers of securities, traditional or digital, must comply with the registration requirements of the federal securities laws,” Kristina Littman, the SEC’s cyber enforcement chief, said in a statement. “The remedies ordered by the SEC will provide meaningful relief to investors in this unregistered offering.”

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A New York City man has been indicted for allegedly stealing and selling reams of payment card data, the proceeds of which he laundered in bitcoin.

Vitalii Antonenko, 28, was charged in the U.S District Court for the District of Massachusetts on Tuesday with conspiracy to engage in computer hacking, payment card trafficking and money laundering, according to a federal indictment.

Law enforcement found hundreds of thousands of stolen payment cards on Vitalii Antonenko’s computers after arresting the Ukraine native at Kennedy International Airport in March 2019. They charged Antonenko with money laundering at the time.

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In the Tuesday indictment, prosecutors outlined a multi-pronged money-laundering scheme that turned proceeds of stolen and sold credit card data – including data from an unnamed Massachusetts hospitality business – for tens of thousands of dollars.

Working with two conspirators from 2014 to 2016, Antonenko allegedly received at least 114 bitcoin from one, sent about as much bitcoin to the other, and then received nearly $40,000 in cash bank deposits 10% below market rate, the indictment said.

Law enforcement officials say an undercover agent bought a victim’s stolen card data from the first conspirator in November 2016. It further alleged the conspirator sent Antonenko 4.38 bitcoin the same day they discussed hospitality card data Antonenko still had for sale.

Antonenko also hacked a “non-profit scientific research institution” in Massachusetts, according to the indictment. The indictment does not name either victim.

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BlockTower Capital, a digital asset hedge fund, managed to more than double its lifetime return in the first four months of 2020, according to investors and documents reviewed by CoinDesk. This news comes a day after Goldman Sachs denounced cryptocurrencies as an investment.

Meanwhile, Samsung and Minecraft have rolled out new blockchain integrations and Russia is mulling appending mortgage documents to its national distributed ledger. Here’s the story:

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. 

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Digital vs Traditional Assets
BlockTower Capital’s hedge fund has returned 33% profits in the first four months of 2020, two BlockTower investors said. Despite the havoc coronavirus wreaked on markets, the fund did better in those four months than the stock index did in any full year since 1997. And as a result of the climb, the fund returned 73% for those who invested from day one and held on through to last month. MaiCapital has launched the “Bitcoin+ Investment Fund,” an actively managed, quant-driven hedge fund to track bitcoin’s performance. (The Block) Yet, Goldman Sachs analysts noted yesterday that while cryptocurrencies like bitcoin “have received enormous attention,” they “are not an asset class.”

Blockchain Integrations: Minecraft & Samsung
Minecraft, one of the world’s most popular video games, has a new plug-in enabling players to place blockchain assets directly into their servers. While Samsung Blockchain users in the U.S. and Canada can now connect to Gemini’s mobile app to buy, sell and trade crypto after the companies built an integration between the two applications. 

Investments and New Offerings
Genesis Global Trading has launched a derivatives trading desk to be led by former Galaxy Digital staffer Joshua Lim. The new derivatives desk will expand the company’s suite of products as it aims to attract more institutional clients to the newly branded Genesis Prime, announced last week. Canaan plans to issue $12.4 million worth of shares in an employee benefit plan. (The Block) The Stellar Development Foundation has invested $550,000 in the micropayments provider SatoshiPay. (Decrypt)

The Decentralized Web
Elizabeth Renieris resigned from the ID2020 Alliance, which aims to bring digital identities to billions of people, citing the organization’s opacity on digital immunity passes, corporate influence and the risks of applying blockchain to immunity passes. While Torus Labs has unveiled a new identity solution, DirectAutha, for blockchain-agnostic dapp logins. Handshake, which airdropped an estimated $100 million worth of HNS tokens to developers, has attracted thousands of participants who have spent more than $10 million of those tokens. Handshake aims to decentralize the internet’s domain-name infrastructure.

Related: Defying Coronavirus Crash, BlockTower Crypto Fund Stretches 30% Total Return to 73%

The National Stage
Russia’s central bank is considering putting mortgage records on Masterchain – a government-backed distribute ledger project now in testing with leading banks. Speaking during an online meeting with the country’s parliament, the State Duma, the Bank of Russia’s first deputy chief, Olga Skorobogatove, said a previously launched trial on a decentralized depository system for digital mortgage bonds proved successful.

Chainlink Outperforms
During a year when traditional assets like U.S. stocks are floundering and bitcoin is up 27%, Chainlink more than doubled, making it the top-performing digital asset among the top 10 ranked by market capitalization, according to OnChainFX. The coin’s market value is now almost $3.8 billion. New data suggests that many of the project’s devoted fans are holding the LINK token as a long-term investment. The data suggest the Marines are sending their tokens to either their own wallets or Chainlink smart contracts. The percentage of LINK supply held by the top 1% of addresses has grown by almost 25% in the past year, according to Glassnode. 

Crypto vs COVID Charity Poker Tournament
Hold ‘Em for a cause on May 31, when crypto figureheads come together to play poker for charity. Buy in with fiat or crypto for a chance to play against Ryan Selkis, Brock Pierce, Hailey Lennon, Ran Neuner, Charlie Lee and more for a chance to win two bitcoins. 

Ante up at least one hour before first bet. 

The History of Innovation
Matt Ridley, author of the “Rational Optimist,” joins The Breakdown to discuss economic history and possible futures of prosperity’s most important driver: innovation.

The Breakdown: Money Reimagined
As clarity emerges amid the COVID-19 crisis, what have we learned about the battle for the future of money? Does the dollar reign supreme, are the euro or China’s digital yuan gaining ground or does an alternative like bitcoin stand a chance? 

The fourth and final episode of The Breakdown: Money Reimagined poses the big questions this podcast microseries has explored with speakers and panelists from Consensus: Distributed, CoinDesk’s virtual summit held May 11-15. 

These voices include former Treasury Secretary Lawrence Summers, the Winklevoss brothers, former CFTC Chair Christopher Giancarlo, Binance CEO Changpeng Zhao, YouTube influencer and beauty mogul Michelle Fan, The Chainsmokers, esteemed economist Calota Perez and more. Subscribe here.

UPDATE (MAY 28, 17:45 UTC): The headline and lede of this article have been edited for clarity.

• Blockchain Bites: Google Validates Theta, Coinbase and BitGo Eye Crypto Prime Brokerage
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The Enigma mainnet was rebranded the Secret Network after an on-chain proposal by the community unanimously passed on May 17. The new website, Twitter and blog, among other digital assets, went live Wednesday. 

The Secret Network, so named to describe its decentralized governance, is an open source network that protects data for users of decentralized applications, now known as “Secret Apps.” 

With 28 active validators, the vote was, in part, a move to bring the different core contributors under a single, identifiable umbrella, even though they remain separate entities, in part as a way to attract developers and users. With the rebrand now complete, an acute push for developers is one of the next steps. Key contributors to the development of the mainnet and governance include Enigma, Secretnodes.org and Chain Of Secrets, among others. 

Related: ‘Decentralized ID at All Costs’: Adviser Quits ID2020 Over Blockchain Fixation

“Enigma is thrilled that the branding for the mainnet blockchain now better reflects the communal effort supporting the chain, its growth and its mission — to bring privacy to public blockchains,” said Tor Bair, Head of Growth at Enigma, in a text message.

The Secret Network’s protocol lets decentralized applications utilize encrypted data without revealing it on a public blockchain, or even to nodes themselves, using smart contracts that can utilize private data termed “secret contracts.” The secret contract testnet is a few weeks away from launching but if all goes well it will then be proposed to the mainnet. 

See also: Enigma Launches Second Testnet for ‘Secret Contract’ Blockchain

As CoinDesk has reported previously, the aim is “to create a secure, off-chain environment able to process sensitive and private blockchain data with end-to-end encryption.” If the testnet is incorporated into the mainnet by a vote, it will be the first layer one blockchain with privacy-preserving smart contracts, according to Bair.

Related: Citizen App’s New Contact Tracing Feature Raises Privacy Red Flags

The mainnet is based on the Cosmos software development kit, a network of parallel independent blockchains, and using the consensus algorithm Tendermint. It was secured by a “Secret” coin when it originally launched in February. This move is an extension to expand that name to the whole network, and reflect its community driven progress. 

“The branding of ‘Secret Network’ follows the name of its native coin (Secret, SCRT) as well as existing concepts in the ecosystem such as secret nodes, secret contracts, and Secret Apps. Secret Network now has its own community-maintained website,” according to a new blog post on the site. 

This comes a few months after an Enigma MPC settlement with the U.S. Securities and Exchange Commission (SEC) over charges relating to the blockchain startup’s $45 million token sale in 2017. 

From now on, validators on the Secret Network will be known as “Secret Nodes,” and data being processed will be kept encrypted from the node itself. The network is also planning to conduct an incentivized testnet where validators can help develop this new function. 

“Enigma and the Secret Network community are now looking forward to the upcoming launch of our incentivized testnet and the Secret Games, where we’ll continue to test secret contract functionality for the network,” said Bair.

• Market Wrap: Here’s Why Ether’s Price Has Jumped 65% So Far This Year
• Ukraine Arrests Hacker Accused of Selling Personal Data, Crypto Wallet Info

The Stellar Development Fund (SDF) has loaned micropayments firm SatoshiPay $550,000 in XLM tokens after the coronavirus pandemic put the kibosh on its Series A funding round.

Under lockdown in his Berlin flat, SatoshiPay CEO Meinhard Benn told CoinDesk via Google hangout the Series A, which was to have been finalized by the start of Q2, “fell apart” at the last minute because of the coronavirus pandemic as it became impossible to arrange meetings with potential investors, and market turbulence led to previously committed investors to pull out.

Through its Enterprise Fund, SDF had already pledged $550,000 to the Series A. After it became clear the round wouldn’t happen, the Foundation agreed to convert their investment into a loan to provide the company with cash flow for the next 12 months. The value of the loan was transferred in lumens at a fixed exchange rate, which SatoshiPay can choose to convert out again into fiat currency when required.

Related: Fed Up With Its Fork of Stellar, Kin Is Looking to Move Onto Solana

“It was very kind of them, you know. They see this situation happening [and] they sit on $550 million and they thought, okay, we might as well help these guys, just to kind of safely get them through all of this, and then have a proper raise afterwards,” Benn said.

Overall, SatoshiPay has reduced costs by almost 60%, which gives it a year-long runway – enough, Benn believes, to see the back of the coronavirus. He rubs his shaven head – a “necessity” as restrictions mean barbers will remain shut for months.

Like many other German companies, SatoshiPay is reliant on Kurzarbeit – a scheme where the German state pays a share of employee salaries to keep them on the payroll. SatoshiPay’s staff is currently working half-days, with the government paying 50% of the wages, Benn said.

Luckily, Benn added, SatoshiPay had been in a comfortable cash position prior to the pandemic. The SDF loan will allow the company to continue, in a slim-downed format, to operate until such time as it can begin a Series A in 2021. Once the funding round is over, SDF’s loan will be converted into an equity stake. 

Related: Stellar Enterprise Fund Invests $5M in Crypto App Abra Ahead of Blockchain Integration

But is SDF interested in perhaps a larger stake? “That’s not been talked about at all,” Benn said. “If the raise stays as planned, then they will not.”

See also: Fed Up With Its Fork of Stellar, Kin Is Looking to Move Onto Solana

The relationship between SatoshiPay and SDF was already close. SatoshiPay runs Stellar nodes and launched Solar, an open-sourced wallet on the protocol. “We’re a close ally,” Benn said. “We have, like, two or three calls with the Foundation every week on technical matters and strategic matters.”

Benn wouldn’t say exactly how much his company expects to raise through the Series A, only that it was “north of a couple of million.”

How much would the SDF equity stake be worth? Benn wouldn’t go into details – “this would give away an equity valuation” – but to give perspective, it would be less than the 27.7% stake held by SatoshiPay’s biggest investor, the London-listed Blue Star Capital, which invested $700,00 in early 2017.

See also: Stellar Invests in Security Token Platform Targeting Developing Markets

Delaying the Series A because of the coronavirus wasn’t great, but Benn sees a possible silver lining. Lockdown gives the company more time to work on product development. By the time the Series A does take place, SatoshiPay will have a new B2B solution for cross-border money transfers and micropayments in public beta, Benn said.

Does the loan give SDF too much control over SatoshiPay? Benn doesn’t think so: “They want to maintain us as independent as much as possible while still supporting us,” he said. “They need independent players, independent companies that have a real-world need for what they’re doing and not just because they are paid off partly by SDF.”

“I think we’ve managed to maintain that balance quite perfectly,” he added.

Correction (May. 28, 16:50 UTC): A previous version of this article misstated the loan amount. This has been corrected.

• IoT App Nodle Moves From Stellar Blockchain to Polkadot
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Facebook can benefit from Libra, if its users tap the payments project to buy goods off the social media giant’s marketplaces, CEO Mark Zuckerberg said.

Speaking during an annual shareholder meeting Wednesday, Zuckerberg said Facebook’s commerce work, including Libra, should be viewed through the lens of its ads business, according to a transcript posted by Thomson Reuters. The company treats its ads business as an auction, meaning entities can bid for their best price.

“Because we don’t have to set a price, every business can just bid for themselves what an ad is worth to them in terms of what results they’re trying to get, which means that we can always offer any business the lowest possible price, which is great because that way, it’s very inclusive,” Zuckerberg said. “Millions of businesses around the world can participate, and the business can be very efficient.”

Related: Blockchain Bites: Facebook’s Calibra Facelift and Tencent’s ‘New Infrastructure’ Investments

Combining ads with an effective payment tool for users can benefit businesses further, he said, citing both Facebook Pay and Libra.

“If we can make commerce be more effective for businesses if when they run an ad, somebody who clicks on that ad is now going to be more likely to buy something because they actually have a form of payment that works that’s on file,” Zuckerberg said. “Then it basically becomes worth it more for the businesses to bid higher in the ads than what we see are higher prices for the ads overall.”

See Also: Libra’s Long Road From a Facebook Lab to the Global Stage: A Timeline

He also reiterated past talking points about Libra, saying the infrastructure around payments “hasn’t been updated in a very long time.”

Related: To See Libra’s Potential, Look at the Philippines, Not the US

A tool like Libra, which currently envisions a number of different stablecoins pegged to fiat currencies, could make it easier for individuals to transfer funds or pay for goods across national borders, which would further benefit businesses and Facebook.

“I think that, that’s going to be great for people around the world. I think it will be helpful for the economy overall,” Zuckerberg said.

• Facebook’s Calibra Rebrands to Novi, Details Wallet Tie-Up With WhatsApp
• Facebook’s Toothless Oversight Board Has Lessons for Blockchain

Coinbase is expanding its Tezos staking service to select European countries.

The San Francisco-based exchange announced Thursday that users in the U.K., Spain, France and the Netherlands would now be able to stake Tezos through its proprietary staking service.

“Coinbase is offering an easy, secure way for U.K. and certain [European Union] customers to actively participate in the Tezos network,” the exchange said in a press release. “While it’s possible to stake Tezos on your own or via a delegated staking service, it can be confusing, complicated and even risky with regard to the security of your staked Tezos.”

Related: Blockchain Bites: Google Validates Theta, Coinbase and BitGo Eye Crypto Prime Brokerage

Coinbase first launched its staking service in the U.S. back in November. It claims customers have earned well over $2 million in crypto since then. In the press release, the exchange said staking offered a new lucrative alternative to more traditional investments, such as equities or bonds.

Coinbase – which only listed Tezos last July – estimates the current annual earnings for users staking Tezos comes in at around 5%.

See also: Industry Group Led by Polychain, Coinbase Seeks to Get Ahead on Staking Regulations

A spokesperson for the exchange told CoinDesk it was working with local regulators, in response to a question about why it’s only offering the service to four European nations.

Related: Bitcoin News Roundup for May 27, 2020

“While we are starting with these new markets first, as we expand internationally, we are continuously reviewing and considering additional markets as well,” the spokesperson said.

• Coinbase Buys Tagomi as ‘Foundation’ of Institutional Trading Arm
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Users of the Compound lending platform will begin earning COMP tokens in mid-June, pending the public review of the decentralized finance (DeFi) firm’s distribution plan. 

COMP, the governance token for the Ethereum-based lending dapp, was first announced in February. According to a draft blog post shared in advance with CoinDesk, roughly 42% of the total supply of COMP tokens will move into a reservoir pool and begin daily distributions to users of the protocol for the next four years. 

“Today, we’re excited to announce that Governance is ready to scale from our core team and shareholders, to the entire Compound ecosystem,” Compound’s founder, Robert Leshner, wrote in the blog post. 

Related: RenBTC Quietly Goes Live in Latest Bid to Bring Bitcoin to Ethereum

Read more: Compound Extends DeFi Ethos to Itself, Launches Governance Token

As previously reported, anyone can propose a change to the Compound protocol. Changes might include adding new assets, changing the model for setting a given asset’s interest rate or sunsetting an asset. All of these actions were recently tried out in a closed test of the governance platform, according to the blog post. 

A proposed governance change will only go to a vote if 1 percent of the total supply of COMP tokens signals that it should do so. From there, the full process from voting to code change takes several days. 

COMP token allocations were described when the plan to decentralize was first announced: 46% will be held by shareholders, founders and the Compound team, but about half of that is subject to a four-year vesting period. This means a large portion of the voting power is controlled by the people who created Compound, even if the company that did so won’t hold any COMP. 

Related: Why Kyber Network Tokens Tripled to $100M Despite the Coronavirus Recession

“Delegation is core to this decentralization,” Leshner told CoinDesk. “COMP token holders (most of which are not in the business of writing protocol upgrades) already delegate to the community; adding tens of thousands of new token holders will multiply participation.”

Revealed today, new COMP will be awarded every day to users of the protocol, based on usage. There will be rewards to borrowers and lenders in each asset and new COMP will be distributed at every block. Approximately 2,880 COMP per day will be released to users of the protocol. 

Half the distribution each day goes to suppliers of assets and half to borrowers. Assets that are seeing the most activity will also receive the most COMP tokens each day, so allocation will move with the market. 

Read more: DeFi Startup Compound Finance Raises $25 Million Series A Led by A16z

Right now, COMP purely runs Compound. No returns accrue to the token in its present design, but that is something COMP holders could address themselves later. 

“The governance right gives the community complete control to evolve the economics of the protocol and COMP in entirely new ways – so I have no idea what COMP looks like in two years,” Leshner wrote.

As of press time, some $98.5 million worth of crypto assets are locked into the Compound protocol, with yields ranging from 0.7% for supplying BAT to 2.70% for tether (USDT).

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A federal court has frozen all funds raised in a $9 million token sale the Securities and Exchange Commission (SEC) has accused of being fraudulent.

In a filing earlier this month, the U.S. District Court sitting in Austin, Texas, froze the assets of the individuals and entities believed to have received funds from the Meta 1 Coin initial coin offering (ICO).

The court agreed with the SEC that the “Warner relief defendants” — Wanda Ironheart Traversie-Warner (“Traversie”), Alfred Dewitt Warner Jr. (“Warner”) and Ironheart Trust (“Ironheart”) — would try to “dissipate, conceal or transfer assets,” including by sending them offshore, unless the assets were frozen.

Related: Telegram Quits Court Fight With SEC Over TON Blockchain Project

The ruling, dated May 14, encompasses all the fiat currencies and cryptocurrencies linked to the Meta 1 Coin sale. The Warner relief defendants were also tasked with providing the SEC with a list of all assets valued at over $1,000.

See also: ICO Project Enigma Settles SEC Charges Over $45M Token Sale

This is the latest twist in an increasingly bizarre tale. Launched in 2018 by David Schmidt, a former Republican state senator in Washington State, Meta 1 Coin claimed to have a digital token backed by an art collection valued at over a $1 billion as well as a gold vault worth $2 billion, all audited regularly by KPMG.

The project also promised investors they would make returns of 225,000% from a risk-free investment that would never lose its value.

Related: Kin Foundation Publishes First Transparency Report Amid SEC Court Fight

The SEC has a history of looking sternly at ICOs and this one was no exception. The regulator began legal proceedings against Meta 1 Coin at the end of March. In a strongly worded amended complaint, also filed May 14, the regulator says defendants raised more than $9 million in an unregistered securities offering that was “nothing but a vehicle to steal investors’ money.”

“The Defendants have variously claimed that the Coin [Meta 1 Coin] is backed by a $1 billion art collection and/or $2 billion in gold. In reality, the coin is backed by nothing,” the filing reads. The SEC says that $215,000 of the funds raised in the ICO was spent on a Ferrari.

Meta 1 Coin has denied any wrongdoing. At one point the defendants claimed to have turned down an $8 billion offer from a private individual to buy the total coin supply. In a radio show in April 2019, Schmidt and fellow Meta 1 executive trustee Robert Dunlap claimed to have met with the SEC’s legal counsel.

“[Dunlap] had about a one-hour discussion with a man from the SEC,” claimed Schmidt. “And the fact that he was so impressed with everything that we’re doing, that’s absolutely upfront and legal, he came in and bought coins.”

Dunlap subsequently admitted he had, in fact, not met with anyone from the SEC.

See also: SEC Sues Dropil Founders for Fraud After $1.8M Token Sale

CoinDesk received a statement from Dunlap at the time of the SEC’s initial complaint. Describing the case as having no merit and being slanderous, he argued Meta 1 Coin was waging a “holy war” against the SEC and the wider federal government so as to provide financial freedom to humanity.

“I am looking forward to dismantling the SEC as they are committing crimes against Humanity in the attempted enforcement of financial slavery,” he said. Claiming the defendants had increased the collateral backing the coins, he also wrote: “Meta 1’s Service and Victory For Humanity Will Be Everlasting.”

The SEC wants funds to be returned to investors and the defendants hit with civil penalties. The regulator is calling for a lifetime ban for Schmidt, Dunlap and the rest of the Meta 1 Coin team from purchasing, selling or issuing securities.

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Bitcoin’s price is gathering upward momentum as traders buy fewer put options, which are bearish bets on the top cryptocurrency. 

At press time, bitcoin was changing hands near $9,400, representing a 2% gain on the day, according to CoinDesk’s Bitcoin Price Index. On a week-to-date basis, the cryptocurrency is now reporting over 8% gains.

Bitcoin’s recent price rise is accompanied by a slide in demand for put options. Such derivative contracts give the holder the right but not the obligation to sell the underlying asset at a predetermined price on or before the predetermined rate. Meanwhile, a call option gives the holder the right to buy, 

Related: Bitcoin News Roundup for May 28, 2020

The one-month put-call skew, which measures the price of puts relative to that of calls, is currently at 6.6%, down from its multi-month high of 22% on May 22, according to data provided by the crypto derivatives research firm Skew.

The metric fell sharply from 15% to 5% on Wednesday as prices rose from $9,000. This confirms a bullish breakout on technical charts. Essentially, the demand for put options, or bearish bets, has dropped as prices rise. 

“The decline in skew is related to higher perceived halving risk since mid-May, causing elevated skews,” said  Luuk Strijers, COO at cryptocurrency derivative exchange Deribit. “Now the market seems to be less worried about further downward moves reducing the demand for puts.”

Put options drew greater demand after the May 11 reward halving, pushing the one-month skew higher to 20% from 12%. This was possibly due to fears that the cryptocurrency would witness a price pullback similar to the 30% decline seen in the four weeks following the second halving, which took place on July 9, 2016. 

Related: First Mover: Chainlink ‘Marines’ Are HODLing and Here’s Why You Should Care

A 9% correction happened last week with prices falling from $9,950 to $8,660. The cryptocurrency defended levels below $8,700 multiple times earlier this week before jumping back above $9,000.

As bitcoin fell from $10,000 to $8,630 in the seven days to May 25, the number of addresses holding at least 100 BTC rose from five-year lows, according to data provided by Glassnode.

“Once again, the big players seem to be accumulating into the dip,” analysts at blockchain intelligence firm Santiment noted in a blogpost. 

The number of addresses rose from 16,010 to 16,089 during the price decline, a sign of dip demand and investor belief in the long-term bullish story,  The number of addresses holding at least 0.01 BTC and 0.1 BTC also reached record highs during the recent price drop. 

Technical charts now indicate a scope for a rally toward resistances lined up near $9,850 and $10,000.

Bitcoin has invalidated the bearish lower highs pattern on the four-hour chart with a convincing move above $9,310 (horizontal line).  With that, the positive view put forward by Wednesday’s falling wedge breakout has gained credence. 

The cryptocurrency could rise further to resistance located at $9,875, the upper end of the narrowing price range seen on the daily chart. A close above that level would signal a resumption of the rally from the low of $3,867 observed in March. 

Meanwhile, the lower end of the narrowing price range is the level to beat for sellers. 

• Market Wrap: Bullish Traders Push Bitcoin Over $9,100, Returning to Halving Levels
• Goldman Sachs: Cryptocurrencies ‘Are Not an Asset Class’

One of the largest pharmaceutical companies in the world is working with VeChain to develop a new blockchain-based traceability platform.

Bayer China revealed in an interview Thursday that it had chosen VeChain as tech provider for a new blockchain-powered solution that will allow the firm – a branch of Bayer – to track clinical drugs across the supply chain.

Known as “CSecure,” the system loads a batch number relating to a specific drug onto the blockchain. Each drug can then be tracked as it moves across the supply chain, using timestamps and user-identification information at different waypoints. Because of the immutable nature of the blockchain, the data can’t be changed by a non-permissioned third party.

Related: Tradeshift Proposes Plan to Protect Denmark’s Supply Chains From COVID-19 Crisis

Also see: IBM, Merck Declare FDA-Backed Drug Tracing Blockchain a Success

VeChain won the right to work with Bayer China in a competition back in 2019, after it proposed that the company consider implementing a blockchain-based supply chain solution. The proposal subsequently went on to become CSecure.

The system is based on ToolChain, a proprietary blockchain-as-a-service (BaaS) system that allows VeChain to design and build full distributed ledger technology solutions to a client’s specific requirements.

Bayer China is the latest in a series of high-profile partnerships for the blockchain project. Last June, the Chinese arm of supermarket chain Walmart, as well as Big Four accountancy firm PwC teamed up with VeChain to work on a new food tracking solution for China.

Related: IBM, Merck Declare FDA-Backed Drug Tracing Blockchain a Success

However, VeChain isn’t saying much about the latest deal. A spokesperson told CoinDesk that the firm is bound by a non-disclosure agreement (NDA) and can’t divulge further information about how CSecure would actually work “under the hood.”

A statement from CEO and co-founder Sunny Lu did say he was grateful Bayer put VeChain through its paces in testing CSecure’s product design.

“We’ve experienced the rigorousness of the medical industry by working with Bayer China,” he said. “I feel Bayer’s professionalism and superb work ethic towards medicine and healthcare causes as a whole.”

See also: VeChain Foundation Hacked for $6.5M in VET Token Theft

Last year, Uganda’s president backed a similar tracking project from MediConnect that was to use blockchain tech to fight the issue of counterfeit medicines.

• World Economic Forum Shares Roadmap for Deploying Blockchains in Real World
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Russia’s central bank is considering putting mortgage records on Masterchain – a government-backed distribute ledger project now in testing with leading banks.

Speaking during an online meeting with the country’s parliament, the State Duma, the Bank of Russia’s first deputy chief, Olga Skorobogatove, said a previously launched trial on a decentralized depository system for digital mortgage bonds proved successful.

“We suggested to the government that we refine the project to the point when all kinds of transactions needed for the digital mortgage issuance can be done on Masterchain,” Skorobogatova said. “This platform is working and, without further ado, we can complete this development.”

Related: India’s Central Bank Removes Lingering Confusion Over Banking for Crypto Firms

The official further said six Russian banks have been testing Masterchain for exchanging digital letters of credit, “and some other are ready to join.” Skorobogatova didn’t specify the names of any the banks in that effort, or entities that might participate in the digital mortgage pilot. 

CoinDesk confirmed Skorobogatova’s statements via an audio recording of the meeting. The Bank of Russia did not respond to a request for additional information by press time. 

See also: Russia Considering Draconian Rules for Illegal Crypto Operations

Masterchain was launched in 2017 by the Fintech Association, which is supervised by the Bank of Russia. The project includes participants like Sberbank, Alfa Bank, VTB, Raiffeisenbank Russia and Otkritie, as well as the National Settlement Depository and the federal land registry service, Skorobogatova said.

Related: First Mover: Bitcoin Could Get a Boost From Central Bank Digital Currencies

The project was previously criticized as “disappointing” by the blockchain expert of Sberbank, Russia’s largest retail bank.

Skorobogatova said the Bank of Russia’s regulatory sandbox for distributed ledger projects has applications from 50 projects in the pipeline, some of which have already completed pilots.  

“We tested two digital assets projects, one for hybrid tokens representing digital rights and goods, and another for tokenization of services,” she said. “Both projects got a green light from us, and the companies are now waiting for regulation to be passed so they can launch in Russia.” 

Again, the projects were not named. However, one might be the metal tokenization project by Nornickel, Russia’s mining and smelting giant, which was reported as successfully trialed in the regulator’s sandbox in February. 

In the meantime, the Duma is preparing to hear a bill for the first regulation of digital assets in Russia. The draft passed the first hearing (out of the three required) last May and has been left untouched until last week, when the second draft was introduced together with a package of other laws. 

See also: Russians Withdrew a Year’s Worth of Cash in a Month Over Coronavirus Fears

The new package is proposing a procedure for issuing registered digital securities on the blockchain in Russia, while banning any operations with cryptocurrencies using Russia-based servers and web domains.

Cryptocurrencies are considered commodities in the draft and should be reported for tax purposes. However, they won’t be allowed to be legally sold for fiat. The draft fully reflects the stance of the Bank of Russia, which is in favor of blockchain securities, but does not believe crypto should be legal in the country. 

• Russia Considering Draconian Rules for Illegal Crypto Operations
• Central Banks Mull Creating a CBDC, but Not on a Blockchain: Survey

Digital currency giant Genesis Global Trading has launched a derivatives trading desk to be led by former Galaxy Digital staffer Joshua Lim.

The desk will provide liquidity across crypto derivatives markets and trade cleared and bilateral over-the-counter (OTC) options and forwards. Last week, the New York based-trading firm, which is a subsidiary of CoinDesk parent firm Digital Currency Group, announced it was entering into prime brokerage with its acquisition of crypto custodian Vo1t. 

The new derivatives desk will expand the company’s suite of products as it aims to attract more institutional clients to the newly branded Genesis Prime, said Genesis CEO Michael Moro.

Related: Blockchain Bites: Google Validates Theta, Coinbase and BitGo Eye Crypto Prime Brokerage

Read more: Genesis Trading Buys Crypto Custodian Vo1t in Bid to Become Prime Broker

Lim, a former employee of both Galaxy Digital and Circle, will lead the new derivatives trading desk. At payments startup Circle, Lim helped develop an OTC trading desk. At crypto merchant bank Galaxy Digital, he built customized products for institutional clients. According to a report last month by The Block, Lim departed Galaxy following a round of layoffs in February.

“We want to be present on Deribit and CME as a liquidity provider,” Lim said of his new remit. “For those traders that don’t have enough size on their order books, they can reach out to us and we can be present on the other side of the trade.”

Over the coming months, Genesis will seek to prove to the market that it can do derivative trading, Moro added. Later this year, Genesis will be introducing capital introduction for family offices seeking crypto hedge funds that have the strategies, fee structure and asset exposure to fit their investing needs.

• Coinbase Buys Tagomi as ‘Foundation’ of Institutional Trading Arm
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• Crypto Custodian Anchorage Teases Growth Plan With 2 Executive Hires