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OKEx Founder ‘Star’ Xu Named as Key Holder in Police Custody: Report

5 years 11 months ago

A founder of the OKEx cryptocurrency exchange is being held by police, according to Chinese news source Caixin.

  • In a report on Friday, Caixin said it spoke to two individuals close to OKEx who indicated that Mingxing “Star” Xu, had been taken by police at least a week ago and hasn’t been seen since.
  • The report isn’t clear exactly where this occurred, however OKEx has a headquarters in Hong Kong, while being officially based in Malta.
  • The report also doesn’t indicate why police are holding Xu.
  • The news comes soon after CoinDesk reported earlier on Friday that OKEx has suspended cryptocurrency withdrawals citing the absence of an unnamed holder of the exchange’s private keys.
  • While the notice did say the individual is “cooperating with a public security bureau in investigations,” OKEx CEO and co-founder Jay Hao said on Weibo that the issue is over a personal matter and wouldn’t affect the business.
  • Xu was held by police as part of a fraud investigation back in 2018, but was not arrested.
  • As the news broke, cryptocurrency prices took a dive, with bitcoin dropping around 3% in half an hour.

Also read: OKEx Suspends Withdrawals, Says Key Holder Not Available Due to Cooperation With Investigation

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US Charges 6 With Laundering Mexican Drug Cartel Cash Using Crypto and Casinos

5 years 11 months ago

The U.S. Department of Justice (DoJ) has charged six individuals over alleged involvement in laundering drug cartel funds using cryptocurrency.

  • On Thursday, the DoJ unsealed an indictment (filed on Sept. 24) at the U.S. Eastern District Court of Virginia against Xizhi Li, 45, Jianxing Chen, 40, Jiayu Chen, 46, Eric Yong Woo, 43, Jingyuan Li, 47, and Tao Liu, 45.
  • The DoJ alleges the six individuals were part of an organization that laundered “millions” for the Mexican drug cartels using casinos and front companies.
  • They are also alleged to have used foreign and domestic bank accounts as well as bulk cash smuggling to launder the funds.
  • Phone applications such as WeChat and WhatsApp are said to have been used by the group to communicate their illicit activity.
  • One of the six, Tao Liu, is alleged to have attempted to use wire transfers and cryptocurrency to bribe a U.S. Department of State official to create passports for entry into the U.S.
  • The six face up to 14 charges including conspiracy to commit money laundering, conspiracy to distribute cocaine, attempted identity fraud, and bribery.
  • Superseding a previous indictment, the latest charges result from an investigation spanning nearly four years.
  • Law enforcement looked into the relationship between foreign drug trafficking organizations and Asian money laundering networks in the U.S., China, and elsewhere, according to a DoJ press release.
  • Each of the six now faces a minimum of 10 years imprisonment with a maximum sentence of life behind bars.

See also: DOJ Warns of Possible ‘Oncoming Storm’ in Report Detailing Dangers of Terrorist Use of Crypto

Read the court document in full below:

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Coinbase’s Global Marketing Head Latest to Join Mass Exit

5 years 11 months ago

Coinbase Global Marketing Head John Russ is leaving the U.S. cryptocurrency exchange – the latest in a host of departures over recent weeks.

  • Russ said in a tweet Wednesday that the decision came in response to Coinbase employees being asked to choose between accepting CEO Brian Armstrong’s enforced “apolitical” stance at the firm and going elsewhere.
  • In the summer, some Coinbase employees had protested internally, seeking a more public position on issues such as Black Lives Matter.
  • Armstrong pushed back saying the firm would focus solely on its financial mission and offering a severance package for employees unhappy with the position.
  • The former global marketing head joins at least 60 other employees in their departure from the exchange representing roughly 5% of the company’s headcount.
  • On Wednesday, Coinbase’s Chief Compliance Officer Jeff Horowitz also announced he would be stepping away from the company although it is not clear if he left over Armstrong’s missive.
  • Russ did not immediately return CoinDesk’s request for comment.

See also: Coinbase Senior Software Engineer Left This Week, Unclear if Departure Linked to New Policy

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OKEx Suspends Withdrawals, Says Key Holder Not Available Due to Cooperation With Investigation

5 years 11 months ago

OKEx has suspended all cryptocurrency withdrawals indefinitely, saying one of the exchange’s key holders has “been out of touch” with the exchange because they are “currently cooperating with a public security bureau in investigations.” OKEx’ CEO later said the investigation is due to the key holder’s “personal issue.”

  • Most of the top cryptocurrencies sold off on the news, with the price of bitcoin on OKEx dropping 3% in 30 minutes, touching $11,182 Friday morning, before starting to rebound to $11,300 at last check.
  • The key holder’s being out of touch prevented withdrawal authorization from being completed, the exchange wrote in a notice published early Friday morning.
  • Hours before the announcement, significant withdrawals of ether, tron and bitcoin were completed from known OKEx-affiliated addresses, as picked up by on-chain transaction monitoring service Whale Alert.
  • The exchange did not immediately respond to CoinDesk’s request for comment.
  • “OKEx’s other functions remain normal and stable and the security of your assets at OKEx will not affected,” the notice read. “We will resume digital assets/cryptocurrencies withdrawals immediately once the concerned private key holder is able to authorize the transaction.”
  • OKEx CEO Jay Hao claimed the key holder’s cooperation with officials was due to a “personal issue” and the investigation would not affect the business, according to a Weibo post.
  • Taking to Twitter, Hao indicated that non-crypto withdrawals should still be processing, claiming that all non-crypto or digital asset operations were unaffected.
  • The Malta-based exchange is the second-largest cryptocurrency derivatives platform by 24-hour volume, according to Skew.

Update (Oct. 16, 4:50 UTC): This article has been updated with information about coin withdrawals, price of bitcoin.
Update (Oct. 16, 6:12 UTC): This article has been updated with public statements from CEO Jay Hao.

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Fed Chairman Powell to Speak About Digital Currencies Next Week at IMF

5 years 11 months ago

Federal Reserve Chairman Jerome Powell will speak next week as part of a panel on the future of cross-border payments at the International Monetary Fund’s (IMF) annual meeting.

  • Panelists will discuss “the benefits and risks of cross-border” digital currencies as well as their policy implications, IMF said.
  • The panel, which will be webcast, will start at 8 a.m. Eastern time on Monday.
  • Also on the panel will be: Agustín Carstens, general manager of the Bank for International Settlements; Nor Shamsiah, Governor of Bank Negara Malaysia; and Governor of the Saudi Arabian Monetary Authority Ahmed Abdulkarim Alkholifey, whose central bank is collaborating with the United Arab Emirates on a blockchain-based transaction platform.
  • It was not immediately known if Powell’s remarks will include his thoughts on a digital dollar.

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Market Wrap: Bitcoin Tests $11.5K; Ether Futures Open Interest Flattens

5 years 11 months ago

Bitcoin is turning bullish Thursday while ether futures open interest sticks around $1 billion the past month.

  • Bitcoin (BTC) trading around $11,537 as of 20:00 UTC (4 p.m. ET). Gaining 1.5% over the previous 24 hours.
  • Bitcoin’s 24-hour range: $11,249-$11,543
  • BTC above its 10-day and 50-day moving averages, a bullish signal for market technicians.

Bitcoin’s price is on the rise Thursday, moving from a mostly flat trend to hit as high as $11,543 on spot exchanges such as Bitstamp. It was changing hands at $11,537 as of press time. 

The move upward arrives as the world’s oldest cryptocurrency has struggled to stay above $11,500 since Oct. 13. Andrew Tu, an executive at trading firm Efficient Frontier, said this phenomenon, often known as “resistance” where traders take profits, creates sell momentum and holds back bitcoin from pushing higher.

Related: Is Crypto Converging With Public Markets?

“There is significant resistance past $11,400,” Tu told CoinDesk. “It may be that we fail to stay above $11,500 and begin to range from $10,500-$11,400.” With the exception of a quick bounce to as high as $11,730 on Oct. 13, bitcoin has been in $11,400-$11,500 territory most of the past week. 

“Looking back at 2020 so far, bitcoin is on a nice and steady walk upwards,” said Henrik Kugelberg, an over-the-counter crypto trader based in Sweden. “It is very fortunate that we have bitcoin to look at when most other macro things look gloomy, to say the least.” 

Read More: World’s Growing Stockpile of Negative-Yielding Debt a Positive for Bitcoin

BItcoin is trouncing traditional investment hedges such as gold and even silver. While gold is up 26% in 2020 and silver has gained 35%, bitcoin has climbed 57%.

Related: Nigeria Is Developing Strategies for National Blockchain Adoption

“There will always be plunges, bull runs and plateaus with bitcoin,” Kugelberg added. “But I am confident we have not seen all the effects of the amazing developments in and around bitcoin.” One of these developments has been the increasing number of publicly traded companies holding some bitcoin as a reserve asset, something Kugelberg sees as a bullish driver.  

Efficient Frontier’s Tu sees significant upside if bitcoin can get over the $12,000 price point. “If we do successfully break $12,000 we could see BTC sharply rise, as there are few historical resistance lines past this point,” he added.

Ether futures flatten

Ether (ETH), the second-largest cryptocurrency by market capitalization, was up Thursday trading around $378 and climbing 0.74% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

Read More: How the DeFi Craze Made Its Way to China

The ether futures market has stagnated in the past month, hovering around $1 billion in open interest per day after hitting record numbers on Aug. 15 and Sept. 1, when it briefly surpassed $1.7 billion. 

Vishal Shah, a crypto options trader and founder of derivatives exchange Alpha5, says the earlier open interest spike can be attributed to the decentralized finance, or DeFi, frenzy. 

“The way I look at that chart is by extracting out the mid-July to mid-September open interest change. That was the DeFi effect,” Shah said. “Now we are mostly tracking broader industry growth with some elements around Ethereum 2.0 keeping hopes high.”

Other markets

Digital assets on the CoinDesk 20 are mixed, mostly red Thursday. Notable winners as of 20:00 UTC (4:00 p.m. ET): 

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

Read More: Filecoin Launch Finally Brings $200M ICO to Fruition

Equities:

Commodities:

  • Oil was down 0.28%. Price per barrel of West Texas Intermediate crude: $40.97
  • Gold was in the green 0.26% and at $1,906 as of press time.

Treasurys:

  • U.S. Treasury bond yields were mixed Thursday. Yields, which move in the opposite direction as price, were down most on the two-year, dipping to 0.139 and in the red 4%.
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Hackers Infiltrated Almost 2,000 Robinhood Accounts, More Than Thought: Report

5 years 11 months ago

Nearly 2,000 Robinhood Markets accounts were hacked in a recent series of attacks that stole customer funds, an indication the infiltration was more pervasive than previously believed, Bloomberg reported, citing a person with knowledge of an internal review.

  • According to the company’s statement at the time of the hacks, the attacks were said to have affected only a “limited” number of clients..
  • Despite the company’s statement at the time blaming the attacks on the victims’ personal email accounts being compromised, several victims told Bloomberg they found no evidence this happened.
  • In addition, several victims said they’d already used two-factor authentication, something Robinhood was advising the individuals who’d been hacked to set up, Bloomberg said.
  • A Robinhood spokesperson declined to comment on the Bloomberg report, only referring CoinDesk back to the company’s earlier statement.

UPDATE: 20:30 UTC: Adds that some clients were already using two-factor authentication, several found no evidence of comprised personal email accounts.

Read also: Robinhood Traders, Including Bitcoin Holders, Left in the Lurch Following Theft: Report

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DeFi Audit Firms Seeing ‘Overwhelming Demand’ Even Amid Token Price Slump

5 years 11 months ago

If you’re an Ethereum project looking to get audits done before the close of 2020, it’s probably too late in the game.

Audit firms CoinDesk spoke with said they are swamped with decentralized finance (DeFi) projects. The months-long backlog comes amid a sharp pullback across the $11 billion DeFi market, with most tokens down 19% over the last 30 days, according to Messari.

Audit firm OpenZeppelin, which has overseen audits on DeFi staples such as Compound and Augur, said it is “seeing an overwhelming demand for audits” and is booking clients “well out into Q1 2021.”

Related: How the DeFi Craze Made Its Way to China

“We’re seeing a lot of requests for governance token clones of varying quality,” OpenZeppelin Marketing Lead David Steinrueck told CoinDesk in an email. 

Juliano Martinez, technical writer at audit firm Quantstamp, told CoinDesk in a Telegram message that the “high volume” of applicants has led to his company “rejecting lots of projects.”

The separation between audited projects and non-audited projects became palpable over DeFi’s boom months – often referred to as “DeFi Summer” – as code flaws in some projects led to contracts being exploited by hackers. In fact, some projects such as “monetary experiment” Yam.Finance openly flaunted being unaudited.

Read more: DeFi Meme Coin YAM Succumbs to Fatal ‘Rebase’ Bug, Makes Plans for ‘YAM 2.0’

A three-month ‘lead time’ for DeFi audits

Related: First Mover: As Ethereum Enthusiasm Builds, ‘Bear Case’ Could Still See Prices Double

Trail of Bits co-founder and CEO Dan Guido, on the other hand, told CoinDesk in an email the firm is running a typical three-month “lead time” before a new project can be audited.

Guido said Q4 has always been a busy quarter for DeFi audit firms as “institutional clients try to spend their remaining cash before the end of the year.”

Trail of Bits also conducted audits on three Ethereum 2.0 clients including Nimbys, Prysm and Lighthouse ahead of that project’s presumed late-autumn launch.

A lack of new projects rolling out is not the reason why DeFi is entering a bear market, however.

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

Independent analyst and former quantitative trader at Tower Research Qiao Wang told CoinDesk in a private message the “market is exhausted because it was overheated” from overplayed retail buyers and that the sharp fall in DeFi token prices is “pretty independent from new high-quality projects, of which there are many.”

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Coinbase to Sponsor 2 Bitcoin Core Developers With New Grant Program

5 years 11 months ago

Coinbase is sponsoring at least two Bitcoin Core developers with a new grant program, the San Francisco-based exchange announced Thursday.

“We believe helping to connect and grow the cryptoeconomy is essential to building an open financial system for the world,” Manish Gupta, executive vice president of engineering at Coinbase, said in a statement. “Our Crypto Community Fund aims to grow and improve the entire crypto industry, while making it simpler to use and more secure for everyone. If successful, we intend to expand the program to other types of projects and crypto communities.”

The move comes after years of complaints from some members of the Bitcoin community that Coinbase and other exchanges have taken up the coder talent pool and made money off bitcoin but haven’t contributed directly to the open-source Bitcoin Core codebase.

Related: Taproot Has Been Merged Into Bitcoin Core: Here’s What That Means

In April of this year, Wyoming-based startup CardCoins became one of the smallest industry players to sponsor Bitcoin Core developers.

Read more: Why a Startup You’ve Never Heard of Is Now Sponsoring a Bitcoin Core Developer

Coinbase says the kinds of projects it is willing to support includes:

  • Direct contributions to Bitcoin Core (e.g., improving testing, fuzzing, bug fixes, improvements)
  • Significant code and/or Bitcoin Improvement Proposal (BIP) review
  • Contributor tooling (e.g., bitcoinacks.com, which is open source)
  • Bitcoin Core libraries and tools (e.g., libsecp256k1)
  • Improvement to testing (e.g., fuzz testing, functional tests)

Coinbase would not reveal the size of the fund but did say in an emailed statement that it hopes to increase the fund over time. 

Related: Coinbase Chief Compliance Officer Departs Amid Wider Exodus

The exchange compared this effort to other developer-focused initiatives it has led in the past, such as its “USDC Bootstrap Fund,” which was launched in September 2019 and supports developers by “investing directly in the protocol” with stablecoin liquidity. 

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Trump’s Security Hawks Call Distributed Ledgers ‘Critical’ in US-China Tech Arms Race

5 years 11 months ago

The Trump Administration has included “distributed ledger technologies” (DLT), the grandaddy tech behind cryptocurrency and blockchain, in its strategy for preserving America’s technological supremacy over China and Russia.

  • DLT is one of 20 focus areas on the National Security Council’s "critical and emerging technologies" shortlist, released Thursday.
  • The NSC’s strategy calls for investing in, developing, adopting and promoting the priority technologies.
  • Also on the shortlist: AI, data science, quantum computing and “space technologies,” weapons of mass destruction mitigation technologies, and others.
  • Absent from the document: hard numbers and a concrete roadmap to implementation.
  • Pockets of the U.S. government are already investing in blockchain infrastructure, the Department of Homeland Security most publicly so.
  • The U.S. military is also examining DLT for combat operations, but efforts are still in their early stages.
  • Chinese officials have long been bullish on DLT. A state-sanctioned distributed network for hosting dapps and internet services debuted months ago.
  • It is not quite as clear where Russia stands on state-sponsored DLT use cases.

Read more: US Military Is Falling Behind China, Russia in Blockchain Arms Race: IBM, Accenture

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Nigeria Is Developing Strategies for National Blockchain Adoption

5 years 11 months ago

Nigeria’s federal government is reportedly developing an ambitious plan to facilitate national crypto adoption with the vision of creating a “Digital Nigeria.”  

  • According to an early draft of the strategy framework obtained by local publication Technology Times, the country’s Federal Ministry of Communications and Digital Economy and the National Information Technology Development Agency (NITDA) have partnered to develop a blueprint for national blockchain adoption.
  • The project was confirmed by a blockchain engineer who worked on the draft.
  • Aptly titled the “National Blockchain Adoption Strategy,” the document states that facilitating blockchain adoption is part of a larger effort by Nigeria President Muhammadu Buhari to diversify the Nigerian economy.
  • Protests have erupted across Nigeria, with citizens marching against police brutality, including calling for the disbandment of the special anti-robbery squad SARS. Buhari has come under fire for renaming – rather than disbanding – SARS. 
  • Protest groups in Nigeria have accused the government of interfering with traditional fundraising methods, and have begun raising funds using the Bitcoin system to circumvent censorship.
  • According to the new framework, the idea is to “use blockchain technology as a platform for the transition into a digital economy.”
  • In 2017, the Central Bank of Nigeria declared digital currencies are not legal tender in Nigeria, while the country’s Securities and Exchange Commission warned against the risks of investing in digital assets.
  • But last month regulators showed interest in governing the space, with Nigeria’s SEC saying it will treat all cryptocurrencies and token offerings as securities.   
  • Now, the proposed adoption framework includes an initiative to create a legal framework for governing the crypto space.
  • The draft also outlined five strategic objectives: establishing regulatory oversight; stimulating innovation and entrepreneurship; developing security, trust, and transparency in value chains; encouraging investment opportunities and job creation; and governance.
  • The blueprint also alluded to the creation of a National Blockchain Consortium aimed at driving adoption initiatives, particularly in applications in the public sector. 
  • Nigeria’s mission is to drive adoption of the technology in public administration, leading to improved efficiency, transparency and accountability, according to the document. 
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Stellar to Add Support for USDC Stablecoin, Opening Up Dollar-Backed Remittances

5 years 11 months ago

USDC is being added to its third blockchain: Stellar.

Announced Thursday during the Stellar Development Foundation’s quarterly review call, the addition of the dollar-backed stablecoin seeks to bolster Stellar’s standing as a cross-border payments network.

“We are focused on creating equitable access to the financial system by building a global network that delivers services to users regardless of their geography,” Stellar Development Foundation CEO Denelle Dixon said in a statement, adding: 

Related: CoinDesk Joins IMF, CFTC, Swiss FINMA at DC Fintech Week

“The addition of USDC to Stellar will allow us to continue to expand our global reach in pursuit of this mission while opening up new avenues for growth and innovation for the developers and businesses building on the network.”

According to CENTRE – the USDC consortium jointly led by Circle and Coinbase – there are around 2.8 billion USDC in circulation. Stellar, which is primarily used by financial institutions for cross-border transactions, has 4.6 million accounts. 

Stellar will be the third official chain for USDC, having launched on Ethereum and expanding to Algorand in June 2020. Stellar says the coin should be available on its network by January 2021.

Read more: Circle, Coinbase Bring USDC Stablecoin to Algorand’s Blockchain

Related: FSB Recommends Stablecoin (Libra) Safeguards as G7 Continues Blockade

Launched in 2018, USDC is the second-largest stablecoin by market capitalization, with $2.75 billion, trailing Tether’s USDT, with a multichain market cap of $16.17 billion, according to data compiled by Messari.

The Stellar addition is part of the CENTRE’s multichain approach to USDC.

“We value the increased interoperability and wide range of developers that the Stellar network brings to the table, and look forward to seeing how adding a strong and stable USD anchor to Stellar grows its ecosystem and its importance as a platform driving global financial inclusion,” Circle CEO Jeremy Allaire said in a statement. 

The next version of the Stellar protocol will be deployed in Q4 with a pair of new features, Stellar’s Justin Rice said on the call.

Added Dixon:

“Just having USDC is going to open up more opportunities and corridors.” 

Stellar also announced the dates for its second Meridian conference, a free virtual event held this year Nov. 16-20.

Zack Seward contributed reporting.

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Blockchain Bites: Filecoin’s Mainnet, M&A’s Upswing, Tarbert’s Environmental Concerns

5 years 11 months ago

Crypto M&A is up, CoinList set a record mint of wrapped bitcoin and the CFTC Chairman is “impressed” with Ethereum. Not to mention, Filecoin has pivoted to mainnet.

Top shelf

Filecoin flies
The Filecoin network mainneted at 14:44 UTC, beginning its FIL token distribution. Filecoin is a system from Protocol Labs meant to be both a decentralized file storage and content distribution network in one. The new token is very likely to make history as the fastest newly live blockchain to reach a market capitalization of over a billion dollars, though we can’t really know until the FIL tokens enter trading. Despite multiple delays, the Filecoin project has attracted considerable attention, particularly in China, where investors have been speculating heavily on the network’s mining hardware and the FIL token.

M&A Up&Up
The value of crypto M&As in the first half of 2020 has already surpassed that of full-year 2019, according to a PricewaterhouseCoopers report. Around $597 million was spent in 60 deals in the first half of 2020, compared to $481 million spent in all of 2019 for 125 deals. This year is on track to rival 2018’s $1.9 billion total spent on acquisitions in the crypto space. The acquisitions for the first half of this year were driven by an increase in transactions involving crypto exchanges and trading infrastructure, and native crypto companies continue to be the most active purchasers in the space. 

Related: First Mover: As Ethereum Enthusiasm Builds, ‘Bear Case’ Could Still See Prices Double

Brainiacs
A relic from Bitcoin’s early days, a “brainwallet” refers to a private key that is stored in the user’s memory either in the form of a seed phrase or a password, essentially giving you a portable “bank account” locked inside your head. Once you have the private key memorized, the rationale goes, you can access your bitcoin wallet from anywhere in the world, as long as you have internet access. Since brainwallets rely on the user remembering a passphrase, there is always the risk that you’ll forget it or, in the case of a user-generated phrase, that it will be easily guessed.

Broker deal
Security token firm Securitize is trying to become a broker-dealer (meaning it’s able to buy and sell securities) and alternative trading system for digital assets, the company announced Thursday. The firm signed an agreement to purchase Distributed Technology Markets (DTM), a broker-dealer and alternative trading system registered with the U.S. Securities and Exchange Commission (SEC) and the U.S. Financial Industry Regulatory Authority (FINRA). As part of the acquisition, Securitize will also acquire Velocity Platform, a money services business with licenses in several states. The deal is pending regulatory approval and the terms of the deal were not disclosed. 

Wrapped bitcoin
Token investment platform CoinList minted a total of $57.1 million worth of wrapped bitcoin (4,997 WBTC) in back-to-back mints for its customers Wednesday, setting an all-time record for the most bitcoins wrapped by one merchant in a single day. The previous daily record was set on Sept. 18 when Alameda Research minted $44.7 million (4,093 WBTC) in three separate mints, according to transaction data analyzed by CoinDesk. CoinList is responsible for over 30% of all WBTC ever minted. As of Wednesday there were 105,132 WBTC in circulation, according to the project’s website, representing more than 17,000% growth year to date.

Quick bites At stake

Going green?
Speaking Wednesday during invest: ethereum economy, Heath Tarbert, chairman of the U.S. Commodity Futures Trading Commission, made comments suggestive of the agency’s support of green tech. 

Related: Blockchain Bites: Ethereum Power Users, Composability Questions, Staking Solutions

While “impressed” by Ethereum’s financial and technological capabilities, Tarbert said the network boasts environmental benefits (at least in comparison with Bitcoin). 

“There are issues with mining, of course, so number one [is] environmental issues,” he said in a conversation with Chief Content Officer Michael Casey. “And so I think we were generally supportive as a larger matter in reducing … the environmental footprint, and moving to proof-of-stake [PoS] clearly does that.”

This line of thought is a continuation of a greener financial system the CFTC is looking to foster, as noted in a brief dated Sept. 9. The CFTC’s report details the growing threat of climate change and the steps needed to manage these risks. It also introduces the Climate-Related Market Risk subcommittee.

“Climate change poses a major risk to the stability of the U.S. financial system and to its ability to sustain the American economy [and] may also exacerbate financial system vulnerability that have little to do with climate change; including vulnerabilities caused by a pandemic that has stressed balance sheets, strained government budgets, and depleted household wealth,” the press release reads.

While the agency does not explicitly cite cryptocurrency or blockchain technology or any specific financial technologies, the agency is pledged to “accelerate the net-zero transition.”

“Policymakers, regulators and stakeholders can begin the process of taking thoughtful and intentional steps toward building a climate-resilient financial system that prepares our country for the decades to come,” CFTC Commissioner Rostin Behnam said in the press release. 

Ethereum, the second-largest blockchain by market capitalization, is in the process of shifting to a new PoS consensus model. Nominatively, the shift is designed to help improve the network’s throughput. 

Though other speakers throughout the virtual invest conference also noted PoS’ lowered energy consumption. This includes Ethereum founder Vitalik Buterin, who mentioned several times the lower energy requirements of PoS. 

That said, Buterin did not indicate when Ethereum will be ready to make the shift. Phase 0, involving an independent beacon chain as a proving ground, will happen “very soon,” he said.

“At some point we’ve got to move in terms of scale and efficiency to deal with environmental issues but also to deal with the cost issue,” Tarbert said. “I see proof-of-stake as being potentially helpful.”

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Trump Says He Would Increase Stimulus Offer to Reach Deal With House Democrats: Report

5 years 11 months ago

U.S. President Donald Trump said Thursday he’s prepared to increase his $1.8 trillion stimulus offer if it helps reach a deal with the Democrat-led House of Representatives, Reuters reported.

  • House Democrats have been seeking a $2.2 trillion package.
  • Trump said Thursday on Fox Business Network there’s still a chance a stimulus package can be passed before the presidential election, but those chances are fading, Reuters reported.
  • The president’s comments may rankle some in the Republican-led Senate who had objected to the size of Trump’s current offer.
  • Why this matters to crypto: Bitcoin (BTC) prices have been buoyed this year as investors bet that trillions of dollars of government and central bank spending around the world in response to the coronavirus-induced economic slowdown will inevitably result in inflation, and therefore be positive for the cryptocurrency.
  • As such, if a stimulus deal is reached, BTC may rise further.

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Authorities Arrest 20 Suspected of Ties to Russian Rapper’s Alleged Money Laundering Syndicate

5 years 11 months ago

European, American and Australian law enforcement said Thursday they have arrested 20 suspected members of QQAAZZ, the shadowy criminal money-laundering organization whose sloppy bitcoin tumbling tactics led to the March arrest of Russian rapper Maksim Boiko.

  • The group laundered “tens of millions of euros” for criminal clientele they advertised to online. Cryptocurrency tumbling was one laundering vector, said Europol.
  • Members laundered funds stolen from victims in the U.S., the U.K., Switzerland and Italy, according to a U.S. criminal indictment unsealed Thursday.
  • At least 20 suspected QQAAZZ members are named in the court filings, though Boiko, who was arrested in April, is not. The arrested are accused of conspiracy to commit money laundering and subject to forfeiture allegations.
  • Bitcoin mining rigs were seized in the move, said Europol.

This is a developing story.

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Immutable Calls: AP Election 2020 Results Will Be Recorded on a Blockchain

5 years 11 months ago

The Associated Press’s (AP) 2020 election results will be recorded on a blockchain database, a first for the nearly 200-year-old news agency.

Announced Thursday, the collaboration between the not-for-profit wire service and the Everipedia tech startup will see more than 7,000 state and national election race calls recorded on a blockchain, with a publicly accessible user interface displaying the results. Everipedia’s database runs on top of EOS, the 14th-largest blockchain network by market cap, according to Nomics, though the race calls themselves will be recorded on the Ethereum blockchain.

Chainlink was chosen as the intermediary between the AP data and Everipedia, according to a press release.

Related: Trump Says He Would Increase Stimulus Offer to Reach Deal With House Democrats: Report

Everipedia will publish the final results declared by AP after sufficient votes are counted, said Dwayne Desaulniers, the news organization’s director of enterprise, environmental, social and governance and data licensing. 

“For us this is different and very interesting,” he said. “We’re watching very closely to see how our work can be applied to this media. Everipedia has been good to work with, a solid partnership. We do the race calls, they do the technical stuff.”

The AP will call the presidential, Senate, House of Representatives, state and local elections, in a process that could take anywhere from a few hours to days depending on how results are reported by election officials, Desaulniers told CoinDesk in a phone call.

“We’ll watch the data and whenever we see enough data that’s complete, that factors in all the mail-in [ballots] and all of the votes. Whenever our race callers then decide to declare a winner they’ll do so,” he said. “Most of them will be on election night  … We’re ready to make really great race calls whenever the data and rules tell us that we’re good.”

Related: Bitcoiners Have Trillions and Trillions of Reasons to Ignore US Election

Everipedia, a sort of decentralized alternative to Wikipedia with its own token, will be recording the results for posterity, said Sam Kazemian, the project’s president and co-founder. It launched its mainnet on top of the EOS blockchain in 2018.

While this is the first time AP’s election results will be recorded on a blockchain, the company has worked with other blockchain initiatives in the past. AP tried to license articles with now-defunct blockchain startup Civil in 2018. 

Election day

Roughly 4,000 AP employees will be deployed across the U.S. on Election Day, working from polling centers, city halls and clerk’s offices around the country. As precincts begin reporting numbers, these employees will start recording the vote results in an internal system, updating as new numbers roll in. 

The proprietary system will compare the results with similar data from two, four and six years ago in an effort to prevent any major errors from creeping through, Desaulniers said. 

This data will, in turn, go to race callers, individuals who are familiar with the politics of the region they are in. (Desaulniers is a race caller for the U.S. state of New Hampshire.) These individuals compare current data with historic data and internal models that AP builds to declare if and when certain races are won. 

“It’s very intense,” he said. “I think it’s the biggest journalistic enterprise that we’re aware of.”

Everipedia takes over the process at this point. Once a race is called, that information is entered into another internal AP system. Everipedia will pull the final declaration from an API and record it on its own ledger, permanently storing what AP sees as the final result. 

“So when we declare a governor has won, Everipedia will get that data immediately from our systems and they’ll be able to publish that,” he explained. 

What Everipedia will not record are the vote totals; while most races will be called on Nov. 3, not every race will be. Those that are too close to call or which may end up going to a recount will not be called, Desaulniers said. 

On top of the normal races that are tight and require time to call, 2020 has a massive number of voters who are using mail-in ballots so they can avoid large crowds during the coronavirus pandemic, which might make it difficult for precincts to report voting numbers quickly.

As of Oct. 14, 13.2 million absentee ballots have been returned with a further 68.6 million yet to be returned, according to the New York Times.

“This is sort of an extraordinary year,” Desaulniers said. “There’s no one system, one set of rules. Some states will only begin counting the early votes on election night, and therefore in some counties, in some races, it will extend into Wednesday and possibly later.”

For AP and Everipedia, this means the running list of races called will be continuously updated past Election Day itself. 

Trusted systems

In Kazemian’s view, working with AP is a matter of trust. 

The organization is a non-governmental, unbiased arbiter with close to two centuries’ worth of history, and has earned its reputation, he said. 

It’s a different approach from projects that hope to solve the problem of figuring out which sources to trust by creating a system wherein token holders vote on what the “truth” is for a given story. 

“This is one of those times where I’m super pro-blockchain but, like, it might probably be better to actually trust the centralized organization that’s professionally done this for over 100 years right. This is a good example of that,” he said.

This lets Everipedia focus on making the data easily accessible on-chain and publicly readable, he said. In this collaboration, Everipedia will handle all aspects of storing the data on its EOS-based network. 

The 2020 election is a sort of proving ground. Kazemian envisions other efforts with different news and media organizations.

Storing AP’s race calls on its network can be beneficial for prediction markets or “futures-defined products” that are focused on the election, he said. 

These markets might be looking for a specific result at a specific time, but it is likely that the projected winner of the election might change depending on how mail-in ballots are counted and when the full results roll in, Kazemian said. 

Read more: Prediction Markets’ Time Has Come, but They Aren’t Ready for It

“It allows people to build prediction markets that resolve around what a verified organization says or reports or … allows people to vote or reward or create smart contracts, autonomous systems around whatever information is being put on-chain,” he said. 

In a statement, Chainlink head of business development Daniel Kochis noted that the process would result in a “verifiable, tamper-proof record” for tracking the election.

Kazemian noted the uncertainty around this year’s election timing, where President Donald Trump might appear to be in the lead as in-person votes are counted, but Democratic challenger and former Vice President Joe Biden may be declared the winner after the mail-in ballots and early votes are counted, as one scenario.

CORRECTION (Oct. 16, 2020, 06:30 UTC): Everipedia does not have its own native blockchain as this article originally suggested; the data is being recorded on the public Ethereum ledger.

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Immutable Calls: AP Election 2020 Results Will Be Recorded on Everipedia’s Blockchain

5 years 11 months ago

The Associated Press’s (AP) 2020 election results will be recorded on Everipedia’s blockchain database, a first for the nearly 200-year-old news agency.

Announced Thursday, the collaboration between the not-for-profit wire service and the tech startup will see more than 7,000 state and national election race calls recorded on a blockchain, with a publicly accessible user interface displaying the results. Everipedia’s database runs on top of EOS, the 14th-largest blockchain network by market cap, according to Nomics.  

Everipedia will publish the final results declared by AP after sufficient votes are counted, said Dwayne Desaulniers, the news organization’s director of enterprise, environmental, social and governance and data licensing. 

Related: Trump Says He Would Increase Stimulus Offer to Reach Deal With House Democrats: Report

“For us this is different and very interesting,” he said. “We’re watching very closely to see how our work can be applied to this media. Everipedia has been good to work with, a solid partnership. We do the race calls, they do the technical stuff.”

The AP will call the presidential, Senate, House of Representatives, state and local elections, in a process that could take anywhere from a few hours to days depending on how results are reported by election officials, Desaulniers told CoinDesk in a phone call.

“We’ll watch the data and whenever we see enough data that’s complete, that factors in all the mail-in [ballots] and all of the votes. Whenever our race callers then decide to declare a winner they’ll do so,” he said. “Most of them will be on election night  … We’re ready to make really great race calls whenever the data and rules tell us that we’re good.”

Everipedia, a sort of decentralized alternative to Wikipedia with its own token, will be recording the results for posterity, said Sam Kazemian, the project’s president and co-founder. It launched its mainnet on top of the EOS blockchain in 2018.

Related: Bitcoiners Have Trillions and Trillions of Reasons to Ignore US Election

While this is the first time AP’s election results will be recorded on a blockchain, the company has worked with other blockchain initiatives in the past. AP tried to license articles with now-defunct blockchain startup Civil in 2018. 

Election day

Roughly 4,000 AP employees will be deployed across the U.S. on Election Day, working from polling centers, city halls and clerk’s offices around the country. As precincts begin reporting numbers, these employees will start recording the vote results in an internal system, updating as new numbers roll in. 

The proprietary system will compare the results with similar data from two, four and six years ago in an effort to prevent any major errors from creeping through, Desaulniers said. 

This data will, in turn, go to race callers, individuals who are familiar with the politics of the region they are in. (Desaulniers is a race caller for the U.S. state of New Hampshire.) These individuals compare current data with historic data and internal models that AP builds to declare if and when certain races are won. 

“It’s very intense,” he said. “I think it’s the biggest journalistic enterprise that we’re aware of.”

Everipedia takes over the process at this point. Once a race is called, that information is entered into another internal AP system. Everipedia will pull the final declaration from an API and record it on its own ledger, permanently storing what AP sees as the final result. 

“So when we declare a governor has won, Everipedia will get that data immediately from our systems and they’ll be able to publish that,” he explained. 

What Everipedia will not record are the vote totals; while most races will be called on Nov. 3, not every race will be. Those that are too close to call or which may end up going to a recount will not be called, Desaulniers said. 

On top of the normal races that are tight and require time to call, 2020 has a massive number of voters who are using mail-in ballots so they can avoid large crowds during the coronavirus pandemic, which might make it difficult for precincts to report voting numbers quickly.

As of Oct. 14, 13.2 million absentee ballots have been returned with a further 68.6 million yet to be returned, according to the New York Times.

“This is sort of an extraordinary year,” Desaulniers said. “There’s no one system, one set of rules. Some states will only begin counting the early votes on election night, and therefore in some counties, in some races, it will extend into Wednesday and possibly later.”

For AP and Everipedia, this means the running list of races called will be continuously updated past Election Day itself. 

Trusted systems

In Kazemian’s view, working with AP is a matter of trust. 

The organization is a non-governmental, unbiased arbiter with close to two centuries’ worth of history, and has earned its reputation, he said. 

It’s a different approach from projects that hope to solve the problem of figuring out which sources to trust by creating a system wherein token holders vote on what the “truth” is for a given story. 

“This is one of those times where I’m super pro-blockchain but, like, it might probably be better to actually trust the centralized organization that’s professionally done this for over 100 years right. This is a good example of that,” he said.

This lets Everipedia focus on making the data easily accessible on-chain and publicly readable, he said. In this collaboration, Everipedia will handle all aspects of storing the data on its EOS-based network. 

The 2020 election is a sort of proving ground. Kazemian envisions other efforts with different news and media organizations.

Storing AP’s race calls on its network can be beneficial for prediction markets or “futures-defined products” that are focused on the election, he said. 

These markets might be looking for a specific result at a specific time, but it is likely that the projected winner of the election might change depending on how mail-in ballots are counted and when the full results roll in, Kazemian said. 

Read more: Prediction Markets’ Time Has Come, but They Aren’t Ready for It

“It allows people to build prediction markets that resolve around what a verified organization says or reports or … allows people to vote or reward or create smart contracts, autonomous systems around whatever information is being put on-chain,” he said. 

Kazemian noted the uncertainty around this year’s election timing, where President Donald Trump might appear to be in the lead as in-person votes are counted, but Democratic challenger and former Vice President Joe Biden may be declared the winner after the mail-in ballots and early votes are counted, as one scenario.

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CoinDesk

Filecoin Launch Finally Brings $200M ICO to Fruition

5 years 11 months ago

The Filecoin network pivoted to mainnet at block 148,888, or approximately 14:44 UTC. With that, its FIL tokens will begin their distribution. 

Filecoin is a system from Protocol Labs meant to be both a decentralized file storage and content distribution network in one. The Filecoin team wrote in a post announcing the transition the block number for mainnet launch signifies “prosperity for life” in Chinese, chosen “to honor the epic contribution by our Chinese mining community to Filecoin’s long-term success.”

The new token is very likely to make history as the fastest newly live blockchain to reach a market capitalization of over $1 billion, though we can’t really know until the FIL tokens enter trading.

Related: Authorities Arrest 20 Suspected of Ties to Russian Rapper’s Alleged Money Laundering Syndicate

It should be noted the tokens distributed today will basically all be subject to a vesting schedule, so only a very small portion of the total supply of 2 billion FIL in the Filecoin system would count as circulating. Block explorers currently show a circulating supply of 10,396,586 as of 14:45 UTC. FIL futures are trading at $55.63 according to Crypto.com right now, which would place the market cap at $578 million.

The circulating supply at launch should be much, much smaller than the 200 million tokens sold in the 2017 initial coin offering (ICO), making for a vastly smaller market capitalization by convention.

Read more: Filecoin: Understanding the Complex Crypto System Meant to Rival AWS

Despite multiple delays, the Filecoin project has attracted considerable attention, particularly in China where investors have been speculating heavily on the network’s mining hardware and the FIL token.

CoinList leads

Related: Libra Hires HSBC Veteran Ian Jenkins as CFO, Risk Chief of Digital Payments Unit

CoinList’s Scott Keto contends the first market to actually have FIL tokens available for purchase will likely be CoinList Pro.

The launch of Filecoin is itself a milestone for CoinList, a company that was spun out from Naval Ravikant’s AngelList to manage the gigantic token sale for Filecoin, closing in September 2017. The token sale ultimately raised over $200 million, the largest ICO to that point.

Read more: Filecoin Is Mailing Out Hard Drives of Climate Data to Kick-Start Its File-Storage Network

“This was one of the most anticipated launches or token sales in 2017, it took them a long time to go live, I think that’s partly because they took their responsibility really seriously,” Keto told CoinDesk in a phone call. “It’s finally here and it’s one of the few, in my personal opinion, one of the very clear use cases for blockchain.”

Those interested in following along with Filecoin in its earliest day should first keep an eye on one of its block explorers. Filfox is one such explorer: It shows block height, the number of miners, the top miners on the network and the total amount of available storage on the network. Filscan is another.

“There are many folks already announced as early Filecoin users, and still more to come next week,” Filecoin’s Ian Darrow told CoinDesk via email.

Filecoin dapps

Of announced projects, one example is Slate, a personal storage service that uses Filecoin and IPFS. Textile is another, which has evolved into a set of developer tools for managing storage from where it started, as a sort of decentralized Flickr.

In last month’s “Space Race” testnet sprint, 360 miners participated globally, increasing the network’s data capacity by 230 pebibytes. There was a final prize pool of 1.5 million FIL.

Read more: Filecoin: Understanding the Complex Crypto System Meant to Rival AWS

Ecosystem

CoinList is playing a key role in the distribution of FIL tokens today, managing 55% of the distribution, for all the ICO participants who did not indicate a self-custody or external solution for the distribution, Keto explained.

“Given that CoinList will have the majority of the initial supply, in all likelihood CoinList Pro will be first to list. Fake IOU platforms may try to be first, but those are not backed by real tokens,” Keto wrote.

CoinList’s custody partner is Gemini Custody, though individual FIL buyers are using solutions at Coinbase, Anchorage and others.

Multiple exchanges have promised to list the FIL token, as Decrypt reported Wednesday. CoinList said that number is likely to rise.

Keto estimated that around 3,500 entities will receive FIL tokens. There were a little over 3,000 in the ICO and several hundred more that came through the incentivized testnet. Keto said that, anecdotally, there has been a stunning amount of inbound interest for buying FIL leading up to the mainnet launch.

This launch marks the latest in a string of products going live as described from the highest quality ICOs, a trend that arguably started when the Brave browser first started feeding ads to users last year.

Filecoin’s purpose is to store real data in safe and complex ways. It’s still incentivizing technical entities to get in early. It’s currently running a contest for storing real data, called Slingshot, that will remain live for the next several days.

While the ICO era was controversial for its large number of scams, the best-known token sales have largely delivered their promised products (see for example Status, Tezos, Bancor and EOS). As ShapeShift Founder Erik Voorhees noted on Twitter:

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Taproot Has Been Merged Into Bitcoin Core: Here’s What That Means

5 years 11 months ago

Bitcoin’s long-awaited Taproot update is one step closer to fruition. 

  • The codebase for the smart-contract upgrade to Bitcoin’s blockchain has been merged into the Bitcoin Core library. This comes about a month after Pieter Wuille created a pull request to merge the feature.
  • Now that Taproot’s code has been included in Bitcoin Core’s coding library, the upgrade is only waiting to be deployed at this point. For the new upgrade to activate network-wide, node operators must adopt Taproot’s new ruleset in place of the older code’s consensus rules.
  • This could take weeks or months, depending on how the review process unfolds for the two leading implementation proposals.
  • One of these deployment triggers, BIP 8, would create a “signaling” period to allow full and mining nodes to upgrade; after this period is over, an automatic activation would take place for those who haven’t upgraded.
  • The other method, Matt Corallo’s modern soft-fork activation, is somewhat similar in that it includes a year-long signaling period but it also includes a six-month review process after activation (as well as the added contingency of a two-year activation method not unlike BIP 8 if the first method fails).
  • In the works since Gregory Maxwell proposed Taproot in the first month of 2018, the upgrade is perhaps the most anticipated soft-fork in Bitcoin since Segwit was activated in 2016.
  • Taproot would implement Schnorr signatures into Bitcoin, a cryptographic technique for signing transactions that would enable Bitcoin with more flexible (and private) smart contracts.
  • Many developers anticipate Taproot will be much less controversial than Segwit and thus will activate faster, though an exact timeline for deployment is not solidified.

Read more about Taproot and Schnorr signatures here: Bitcoin’s Future: Exactly How a Coming Upgrade Could Improve Privacy and Scaling

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Libra Hires HSBC Veteran Ian Jenkins as CFO, Risk Chief of Digital Payments Unit

5 years 11 months ago

The Libra Association, the organization developing the Facebook-backed cryptocurrency project libra, on Thursday hired longtime banking executive Ian Jenkins to lead the stablecoin group’s finance and risk operations.

  • Jenkins will become chief financial officer and chief risk officer for Libra Networks, the group’s digital payments subsidiary.
  • Jenkins previously led international banking giant HSBC’s business finance group. He has worked in various banking and finance roles since at least 1990.
  • His hiring adds another HSBC name to Libra’s C-suite. The former CEO of the international banking giant, James Emmet, took the reins on Oct. 1.
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