Article by Joeri Cant.

The United States House of Representatives Committee on Financial Services has scheduled a hearing with Securities and Exchange Commision (SEC) Chairman Jay Clayton and four other SEC commissioners to discuss, among other topics, crypto.

In a memorandum from Sept. 19, the Committee on Financial Services stated that it will hold a hearing on Sept. 24 entitled, “Oversight of the Securities and Exchange Commission: Wall Street’s Cop on the Beat.”

This one-panel hearing will include the Securities and Exchange Commission (SEC) chairman Jay Clayton, commissioner Hester Pierce (AKA Crypto Mom) and another three commissioners.

Libra coin could amount to a security

The Committee on Financial Services has included cryptocurrencies on its list of topics for discussion and points out that the federal securities laws apply to securities — including stocks, bonds, and investment contracts — regardless of whether they are digital.

The hearing will touch upon Exchange-Traded Funds (ETFs), whether or not digital assets are a security or exempt from securities law, and of course Facebook’s planned launch of its stablecoin Libra in 2020. The document adds:

“The Libra Investment Token could amount to a security since it is intended to be sold to investors to fund startup costs and would provide them with dividends. The Libra token itself may also be a security, but Facebook does not intend to pay dividends and it is unclear if investors would have a “reasonable expectation of profits.”

Zuckerberg continues tour of Washington DC

Cointelegraph reported on Sept. 19 that Facebook CEO Mark Zuckerberg is making the rounds with policymakers in Washington, D.C. to discuss “future internet regulations,” most recently with Senator Josh Hawley.

Earlier on Sept. 19, Cointelegraph reported that Zuckerberg had dinner with a handful of U.S. lawmakers, where he faced intense scrutiny over the Libra project.

On January 14, large crypto exchange Cryptopia was hacked, resulting in significant losses of investor funds.

In an official statement released on Tuesday, the company said that the New Zealand police and the government’s High Tech Crimes Unit had initiated an investigation into the case.

Possible Impact on the Reputation of Crypto

This time last year, in January 2018, Japanese cryptocurrency exchange Coincheck was hacked and lost more than $500 million in user funds.

At the time, Coincheck executives said in a press conference that the security breach was caused by a lack of personnel and experts working to improve the security measures of the exchange.

As Yuji Nakamura, a Tokyo-based technology journalist, reported on Jan 26, 2018:

Main takeaways from Coincheck press conf: only NEM impacted. Plans to continue operating, restart trading; not clear on plan to repay customers; no multisig; wouldn’t admit security was weak; not sure how hacked, if domestic or foreign hackers; CEO barely spoke.

The Coincheck security breach prompted the Financial Services Agency (FSA) of Japan to tighten regulatory frameworks surrounding cryptocurrencies and implement changes into existing policies.

coincheck crypto exchange office
Japan-based crypto exchange Coincheck was hacked for more than $500 million worth of cryptocurrency in 2018. | Source: Shutterstock

Within less than a year since the Coincheck hack, another major cryptocurrency trading platform has been hacked.

Due to many security breaches that have occurred since early 2016, the cryptocurrency exchange market has struggled to obtain a reputation for having strong security measures and internal management systems.

If exchanges continue to be breached with basic hacking tools and methods, the trust and confidence from investors in the public market will inevitably decline.

One of the contributing factors to the security breaches that cryptocurrency exchanges experience quite frequently is the focus on profitability over investor protection.

As such, some markets in the likes of Japan and South Korea require exchanges to allocate a certain threshold of their revenues to security and internal management system development.

Throughout 2018, in an attempt to increase the trading volume and activity on the exchange, the Cryptopia team integrated many cryptocurrencies and tokens, prioritizing the expansion of the businesses.

Ultimately, the decision of the exchange to allocate a larger portion of its resources toward business development over security and maintenance may have led to the materialization of a high profile security breach.

The official statement of Cryptopia read:

Yesterday 14th January 2019, the Cryptopia Exchange suffered a security breach which resulted in significant losses. Once identified by staff, the exchange was put into maintenance while we assessed damages.

How Hacks Can be Stopped

Strict regulation could work in several regions, and it certainly has worked in South Korea and Japan in preventing hacking attacks.

However, generally, a way to stop cryptocurrency exchange hacks is for users to rely on trading platforms that prioritize security and investor protection through the implementation of comprehensive security measures and insurance.

In most cases, fiat-to-crypto exchanges are compliant with local policies, but many crypto-to-crypto trading platforms operate outside of major markets, often to refrain from dealing with regulatory frameworks.

This post credited to CCN. Images from Shutterstock

Tuesday, Jan. 15 — following a brief period of recovery yesterday, all of the top 20 cryptocurrencies by market capitalization are falling again. The only exception to this are two stablecoins Tether (USDT) and USD Coin (USDC), which are currently in the green.

Market visualization from Coin360

As of press time, Bitcoin (BTC) is down 2.34 percent on the day, to trade at $3,615. The leading cryptocurrency started the day above the psychological threshold of $3,700, while on the weekly chart the highest price point was registered on Jan. 9 at $4,107.

Bitcoin 7-day price chart. Source: Cointelegraph Price Index

The second largest cryptocurrency by market cap, Ripple (XRP) has lost almost 3 percent of its value over the last 24 hours, currently trading at around $0.32. XRP did not experience significant price fluctuations today, but it is significantly down from the intraweek high of $0.38 seen on Jan. 9.

Ripple 7-day price chart. Source: Cointelegraph Price Index

Ethereum (ETH) — which is currently ranked the third largest crypto by market cap — is suffering a slump, having lost around 7.5 percent over the last 24 hours. At press time, the altcoin is trading at around $119.

As Cointelegraph reported earlier, Ethereum’s much-anticipated Constantinople upgrade has been delayed until at least the next week, following the discovery of a critical security vulnerability that it could unexpectedly introduce to the network.

Ethereum 7-day price chart. Source: Cointelegraph Price Index

All of the other top 20 cryptocurrencies are also firmly in the red, displaying dips ranging from two to over 7 percent. The sole exception are stablecoins USDT and USDC, which are up by 0.06 and 0.45 percent respectively, according to CoinMarketCap data.

The total crypto market capitalization is around $120.5 billion at press time, down from its intra-week high of $138.6 billion.

Total market capitalization 7-day chart. Source: CoinMarketCap

A Jan. 14 report by research firm Diar has shown that cryptocurrency exchanges have closed 2018 with “record transacting volumes.” Both the number of trades and the trade volume have purportedly significantly increased on major crypto exchanges in 2018, compared to 2017 figures.

This post credited to Cointelegraph. Image source: Cointelegraph

United States-based cryptocurrency exchange Bittrex will launch an over-the-counter (OTC) trading desk on Monday, according to a private statement released on Jan. 14.

The latest major exchange to enter the OTC market, Bittrex will offer investors the same raft of around 200 crypto assets currently available on its standard platform.

OTC trading has become an increasingly popular option for institutional investors looking to perform large-volume trades. Fellow U.S. exchange Bitfinex opened its own platform in 2016, while the country’s largest player Coinbase is currently in the process of rolling out its product.

Financial technology company Circle, meanwhile, revealed last week that its OTC desk had made $24 billion of trades in 2018.

Bittrex CEO Bill Shihara commented on the OTC desk in the statement, noting:

“This offering will be another way for Bittrex to further advance adoption of blockchain technology worldwide, while also providing our customers with price certainty and a fast and easy way to trade large blocks of digital assets.”

A guaranteed pricing structure will be a major feature of the OTC desk, with the statement referencing trades of $250,000 or more.

In October, Bittrex opened a segregated international trading platform which offers investors from non-U.S. jurisdictions a wider selection of tokens to trade.

Also part of a trend among exchanges, the separation of domestic and overseas trading allows Bittrex to circumvent the still complex local regulatory landscape involving securities.

This post credited to Cointelegraph. Image source: Cointelegraph

Crypto exchange Seed CX — a Chicago-based licensed platform targeting institutional clients — has launched a digital asset wallet solution with on-chain settlement, according to a press release published Jan. 10.  

Seed CX has reportedly developed the new wallet solution together with its settlement subsidiary, Zero Hash — a crypto and fiat currency custodian providing on-chain settlement services. Zero Hash reportedly has FinCEN’sregulatory approval to operate as a money transmitter across 25 American states, and is also under review for a prospective BitLicense from the New York State Department of Financial Services (NYDFS).

As the press release outlines, Seed CX platform users will each be assigned a unique, segregated wallet, which the company argues is more secure than existing multi-user, omnibus wallet solutions offered by other exchanges. Seed CX makes the case that dispersing digital asset holdings across multiple unique wallets helps to mitigate the risk of threat actors accessing pooled assets via a single vector of attack.

To provide a higher level of anonymity for its on-chain solution, Zero Hash will also reportedly generate new wallet addresses for each user each time transfers between wallets occur, making the movements associated with a single wallet less conspicuous to other market participants.

Other operational safeguards will reportedly include restricting access for withdrawal of assets to the user or an authorized delegate signer, whitelisted address functionality to determine pre-approved destination wallets and mult-signature security.

The press release levels criticisms at the inadequate security protocols it considers to be rife among exchanges, as well as at the limited visibility investors are given with off-chain wallet solutions.

As previously reported, 31 crypto exchanges have been hacked over the last eight years, with an estimated $1.3 billion stolen.

As Cointelegraph reported in September, Seed CX is backed by Boston-based alternative investment firm Bain Capital Ventures, which led a $15 million funding round for the exchange. The platform is licensed to offer both spot market and U.S. Commodities and Futures Trading Commission (CFTC)-regulated derivatives, the latter for which it reportedly plans to offer a separate market in the future.

With Seed CX targeting institutional clients with its new solution, the market for retail-focused wallets has seen several recent developments. South Koreanelectronics giant Samsung filed for a crypto wallet-related trademark in the United Kingdom in December, while stalwart hardware wallet firm Ledgerlaunched a Bluetooth-based wallet earlier this month.

This post credited to Cointelegraph

Image source: Cointelegraph

Ethereum and EOS, the two major platforms on which decentralized applications (dapps) are built, have market capitalizations of $15 billion and $2 billion, respectively. But, unfortunately, the number of dapp users simply fails to correlate with the market capitalization or valuations of these projects, with figures ranging in the thousands at best.

Whilst it is impressive observing dapps execute functions in a decentralized manner that once required centralized authorities, we’re still many years from seeing their mainstream adoption, setting aside that gambling dapps have seen the highest levels of usage to date.

Yet, a class of dapp that we should all be extremely excited about in the short term is the decentralized exchanges.

A decentralized exchange is built on the blockchain and allows for the peer-to-peer trading of tokens native to that blockchain. How this works is that the users simply connect their cryptocurrency wallets to the decentralized exchange to begin interacting with the smart contract on it. This process automatically matches, verifies and executes trades without the need of a third-party. Traditionally, DEXs have been built on the ethereum blockchain (Kyber0x ProtocolAirswap), however, this has recently extended to other blockchains such as EOS or NEO.

As a standalone, the decentralised exchange is a dapp that facilitates liquidity but arguably, their function extends beyond that. Here’s why.

Dapps will often require multiple tokens to operate them. You might require the native dapp token, ethereum to send and confirm transactions on the blockchain, a storage token (Sia & Storj) to store the data for the dapp and perhaps a few other tokens depending on the specific needs of the project.

The project might have these tokens to power the service on the backend, but it is unlikely that the users of these dapps will have such a portfolio of tokens (on top of having the correct ratios) to operate the application. The dapp can integrate with the DEX, which abstracts all of the tokens to the back end — providing a “just-in-time” mechanism that creates a seamless user experience.

Throughout this process, there is no third-party API or account setup is required. Below are two examples that highlight the use cases of this.

Liquidity and payments

Melonport’s integration with decentralised exchanges such as 0x, OasisDEX and Kyber Network is a great example of leveraging the liquidity pools that DEXs provide. Melonport is trying to develop a decentralised asset management tool with the front-end operating on top of IPFS, while the back-end leverages off a set of ethereum smart contracts.

In this scenario, the DEX functions as a liquidity provider for fund managers to directly tap into these pools when managing their portfolios. The ability to swap assets with one click is an incredibly convenient function for fund managers to instantly trade or hedge their investments.

Etheremon’s integration with Kyber Network, one of the first dapps to integrate with Kyber’s onchain liquidity, illustrates another use case of DEXs. As more dapps get created, so do the number of different cryptocurrencies — resulting in a more fragmented token ecosystem. Holders of cryptocurrenies are less likely to just hold traditional pairs such as BTC or ETH, but numerous other altcoins in their wallets.

Meanwhile, most dapps usually only accept ETH and perhaps the games’ native token. The implication is that players need to exchange tokens they hold to ether or games’ tokens every time they want to play, which may adversely affect the user’s experience when playing such a game.

In this scenario, the DEX functions as a swap service that allows its players to pay with any supported ERC-20 token, such as Basic Attention (BAT), OmiseGo (OMG) or Zilliqa (ZIL). Simplifying the payment process into one step will allow users to seamlessly enjoy the game and more broadly, driving adoption for the entire dapps ecosystem.

What’s next for DEX?

DEXs will no doubt play a key role in the adoption of cryptocurrencies. But at the moment, they are very much in their infancy — DEXs are used by a niche audience and the technology behind them is still relatively nascent.

However, the interest and merits of DEXs cannot be ignored. Radar Relay completed a $10 million Series A funding round in AugustAirswap recently executed the world’s first security token transfer on a public blockchain with partners SPiCE VC and Securitize. The P2P compliant transfer of a security offers a significant innovation to the way in which traditional securities market operate, cluttered by intermediaries.

And finally, centralized exchanges like Binance are considering their own DEXs despite their position as one of the leading exchange on the market. All that being said, it is important for the DEXs to consider the relevant compliance measures as platforms such as EtherDelta, which brand themselves as a “DEX,” have recently come under fire from the SEC for operating an unlicensed exchange.

There’s no question that blockchain will play a significant role in our technological DNA moving forward. But rather than seeing the blockchain as a thing on the internet and as a tool to decentralize it, the question that should really be focused on is “What can we do with this technology that we couldn’t do before?”

The decentralized exchanges capture this sentiment very well – for the first time in history, users are able to have full control over their funds by utilizing non-custodial wallets that allows them to spend and trade their currency in a peer-to-peer manner.

This post credited to Coindesk. Image via Shutterstock

Major cryptocurrency exchange OKEx has added multiple new crypto derivative pairs to its platform, according to a press release shared with Cointelegraph Jan. 3.

As Cointelegraph reported in late December, the exchange first launched a derivative product called a “perpetual swap” that supports BTC/USD,with up to 100x leverage. As Cointelegraph reported at the time, the product is a margin trading instrument that lets users speculate on the future value of a given cryptocurrency against USD, according to OKEx’s index.

Today, the exchange announced it will add perpetual swaps contracts for seven additional major cryptos — Bitcoin Cash (BCH), Bitcoin SV (BSV), EOS (EOS), Ethereum Classic (ETC), Ethereum (ETH), Litecoin (LTC), and Ripple (XRP).  The newly added contracts will only support up to 40x leverage, according to the press release.

Meanwhile, news recently broke that the launch timeline for the Bakkt Bitcoin (USD) Daily Futures will be established by the Intercontinental Exchange in in early 2019. The news came the same day the Bakkt platform announced a massive funding round totalling $182.5 million. Michael Novogratz reportedly cited Bakkt’s launch as one of the industry developments that could help end the bear market in crypto.

In late November, crypto exchange Huobi launched a platform dedicated to crypto derivatives, dubbed the Huobi Derivative Market, which allows customers to take both long and short positions.

OKEx is currently the world’s second-largest crypto exchange by adjusted daily trade volumes, seeing about $564 million in trades on the day to press time.

This post credited to cointelegraph Image source: Cointelegraph

South Korean crypto exchange Bithumb has won a lawsuit in which an investor had sued the company for his loss of around $355,000 in an alleged hack. Local financial newspaper The Korea Economic Daily reported on the outcome on Dec. 24.

According to the report, the investor — 30 year old civil servant Ahn Park — alleged he had been the victim of a hack of his Bithumb account on Nov. 30, 2017, which resulted in a loss of 400 million Korean won, or around $355,000.

Within hours of making his won deposit, Mr. Park alleged an unidentified hacker had compromised his account and exchanged the fiat for Ethereum (ETH). That same day, in four separate transactions, the cryptocurrency was then alleged to have been transferred out of his wallet, reportedly leaving the investor with ETH worth just 121 won (around 11 cents).

At the heart of Park’s case was reportedly the claim that Bithumb had failed to offer security safeguards that are adequate to its responsibilities as a purported “financial services” company. The claimant alleged that cybercriminals could have acquired his personal information in an October 2017 security breach, wherein hackers gained access to sensitive personal and financial data of over 30,000 Bithumb users.

Yonhap News Agency reports that over 10 SMS messages were sent to the claimant to inform him of the withdrawal movements, but he did not received them. As such “It was difficult to rule out the possibility of being hacked.”

Park also argued that Bithumb’s activities as a crypto exchange are similar in kind to services offered in the financial sector, and should thus fall subject to the security requirements that apply to electronic commerce transaction brokers. The judge however, ruled against this argument, stating that:

“In general, virtual currencies cannot be used to buy goods and it is difficult to guarantee their exchange for cash because their value is very volatile. [Cryptocurrencies] are mainly used for speculative means, [and it] is not reasonable to apply [Korea’s] Electronic Financial Transactions Act to a defendant who brokers virtual currency transactions without the permission of [South Korean regulator] the Financial Services Commission.”

As previously reported, Bithumb suffered a high-profile hack this June, in which around $30 million worth of eleven various cryptocurrencies were estimated to have been stolen; the exchange soon stemmed the damage with the assistance of industry counterparts, reducing the figure to $17 million.

In October, Hong Kong-based crypto exchange service Changelly revealed it had helped Bithumb to recover 1,063,500 Ripple (XRP) of the assets stolen in June, reportedly worth about $585,000 at the time of the hack.

Earlier this month, Bithumb was prompted to deny allegations of artificially inflating its trade volumes, after crypto exchange ratings and analytics service CER had accused the platform of using wash-trading to fake to 94 percent of its trade volume as of late summer 2018.

As of press time, Bithumb does not feature in CoinMarketCap (CMC)’s rankings for crypto exchanges by adjusted volume, but comes top in CMC’s separate rankings based on self-reported statistics, claiming $1,617,305,865 in traded volume over the 24 hours before press time.

This post credited to cointelegraph Image source: Cointelegraph

The Bison App developed by Sowa Labs, a wholly-owned fintech subsidiary of Börse Stuttgart, the second largest stock exchange in Germany has announced plans to launch a cryptocurrency exchange platform with initial support for Bitcoin, XRP, Ethereum and Litecoin. Making the announcement in a post on its official Twitter account, Bison App revealed that the new service will go into its exclusive beta testing phase sometime in January 2019 in what will be a significant move for a platform owned by Europe’s ninth-largest stock exchange.

Embedded video

BISON App@bisonapp

Das Boarding beginnt!🚀Ab sofort starten wir die BISON Beta Phase mit Personen der VIP-Liste – im Januar nehmen wir auch BISONews-Abonnenten auf. Mehr auf: . Ende Januar 2019 planen wir die BISON App in den deutschen App Stores zu veröffentlichen.

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The translated tweet reads:

Boarding starts! 🚀 From now on we start the BISON Beta phase with people on the VIP list – in January we also welcome BISONews subscribers. More on: . At the end of January 2019, we plan to publish the BISON app in the German app stores. #beta #app

Game Changer For Crypto Trading in Europe?

In April, CCN reported that Sowa Labs revealed the Bison app was developed to rival Robinhood by providing fee-free trading to users. At the time, it was described by Sowa Labs Managing Director Ulli Spankowski as “the first crypto app in the world to be backed by a traditional stock exchange.” At that time, the release date for the app was set for sometime in September, but a number of delays meant that this has now been pushed back to 2019.

Confirming the information provided earlier in the year regarding the crypto assets that will be supported initially, Bison app then posted:


@bisonapp Ist es korrekt, dass zum Start der Handel mit Bitcoin und Ethereum beginnen wird? Plant ihr den Handel mit ebenfalls? Vielleicht würde sich das sogar als Basepair anbieten aufgrund der Geschwindigkeit und geringer Kosten! @C3_Nik

BISON App@bisonapp

Ja wir starten zu Beginn mit , , und 🙂 Weitere Kryptowährungen werden dann Schritt für Schritt mit aufgenommen.

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The English translation reads:

Yes, we start with @BTC @ETH, #LTC and #XRP 🙂 more cryptocurrencies are then included step by step.

According to information provided earlier, the platform will offer users simplified ID verification as part of a raft of design and UX solutions intended to create an experience that is as seamless as possible. According to Spankowski, Bison app users can expect to have their onboarding KYC process completed in a matter of minutes as against the days it usually takes other platforms.

Users will also be availed of a new ‘Cryptoradar’ tool that provides users with real-time market sentiment by aggregating and analyzing more than 250,000 tweets to gauge the investment mood and appetite of market participants. Following the January launch, the service will be rolled out in tiers to various user groups.

CCN has previously reported that Germany’s central bank and the Deutsche Boerse completed a blockchain settlement trial as the world’s fourth largest economy continues to explore blockchain adoption with a level of enthusiasm that has often not been matched by other major global economies.

This post credited to ccn Featured image from Shutterstock.

Ebang, a crypto mining ASIC hardware producer, has suffered “significant decreases” in revenue in the second half of 2018. This development was reported in documents submitted by the company to the Hong Kong Stock Exchange (HKEX) on Dec. 20.

HKEX only requires the financial period reported by IPO applicants not to end more than six months from the day of the listing document. Following this requirement, Ebang included its financial information until the end of June 2018 in the draft documents submitted to launch its IPO.

According to the data contained in the document, Ebang saw 2.1 billion yuan ($30 billion) in revenue for the first six months of this year. In 2017, during the same period, the company reported about eight times less income.

However, in a section of the report titled “Material adverse change,” the company states:

“We experienced significant decreases in revenue and gross profit for the three months ended September 30, 2018 compared to the preceding three months ended June 30, 2018.”

Earlier this month, Cointelegraph reported that after the crypto market crash, only two ASIC Bitcoin (BTC) mining rigs remainеd profitable for a period of time.

In the document, Ebang then notes a generally positive outlook to the future, predicting an increase in revenue at year’s end as compared to 2017:

“Nonetheless, our Directors expect that we will continue to record stronger results of operations as a whole for the full year ending December 31, 2018 compared to the year ended December 31, 2017.”

This is not the first time Ebang has tried to launch an Initial Public Offering (IPO), as the company’s first application from June has reportedly lapsed.

As well, Cointelegraph reported in December that the Hong Kong Stock Exchange is purportedly also reluctant to accept the IPO of leading mining hardware producer Bitmain. The IPO application at HKEX of yet another mining equipment producer Caanan also reportedly lapsed in November.


This post credited to cointelegraph Image source: Cointelegraph