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CoinDesk Crypto

DeFi Has a Front-Running Problem. Sparkpool’s Potential Fix Is Launching This Month

CoinDesk Crypto
6 years ago

Ethereum mining pool Sparkpool will launch its new mining network, Taichi Network, complete with a “private transaction” feature in October, CoinDesk confirmed with Sparkpool co-founder Xin Xu.

The network “will gradually go online” this month in what could be one solution to decentralized finance’s (DeFi) long-standing problem with front running, the practice of trading based on information about future trades contained in a blockchain’s transaction queue in cryptocurrency markets.

Taichi’s features are “not designed for selfish usage” but instead for the “public good” of the Ethereum ecosystem, Xu told CoinDesk in an email. 

Related: First Mover: Nine (Bullish) Bitcoin Predictions for Final Months of (Awful) 2020

“We will offer Taichi Network’s features as infrastructure to the Ethereum [ecosystem], and we will see how the reaction works out then,” he said. Think of it as a privacy shield meant to level the playing field for all traders.

Sparkpool currently makes up 23% of Ethereum hashing power, according to Etherscan.

Ethereum’s dark forest

Ethereum’s transaction queue – called a  mempool – is often alluded to as a “dark forest” due to the predatory nature of arbitrage bots spying on transactions. 

First coined by venture capital firm Paradigm’s Dan Robinson, the “dark forest” metaphor describes bots lurking in a blockchain’s mempool to copy and execute profitable trades before the original executes.

Related: Record $166M Ethereum Fees Last Month Were 6 Times Bigger Than Bitcoin’s

Bot arbitrage has long troubled Ethereum, most notably described in a 2019 Cornell University paper entitled “Flash Boys 2.0.”

Profits earned by arbitrage bots skyrocketed over the summer months with an average of 50-100 ether (ETH) earned per day in May, according to estimates shared with CoinDesk by one arbitrage trading firm that requested anonymity. These profits climbed as high as 2,000-3,000 ETH per day at the height of the DeFi mania in early September.

Read more: DeFi Traders Are Gaming Ethereum for Higher Profits, Researchers Say

Private transaction networks like Taichi can cut a path through the trees, however. The mining party, in this case Sparkpool, opts out of broadcasting the chosen transaction destined for its block to the rest of the network. By not communicating to other mempool lurkers, the miner’s transaction gains a higher degree of safety from hungry bots.

For example, Sparkpool’s latest innovation enabled white-hat hacker Samczun to recently save 25,000 ether worth $9.6 million from broken decentralized finance (DeFi) project Lien Finance, according to a self-published account.

On the other hand, you are entrusting your transaction entirely to Sparkpool, meaning the mining giant could front run you itself more easily.

Xu said disrupting the current front-running issues plaguing DeFi transactions “is definitely a direction worth exploring” with Taichi.

Taichi’s early days

Certain aspects of Taichi Network are public, including a general domain registered in July 2020, according to WHOIS. The website remains under construction, but describes Taichi as a “viable Proof-of-Stake (mPoS) Ethereum sidechain” complete with relayers and smart contract capabilities.

Relayers broadcast transactions faster than regular settlements on blockchains by constructing pathways between major nodes. Both Bitcoin and Ethereum have their own relayer networks, such as FIBRE and BloXroute.

Read more: Marlin Releases Open-Source ‘Layer 0’ Transaction Relayer for Ethereum

Sparkpool data website GasNow also includes information on Taichi, describing the network as “greatly improving the efficiency of transactions broadcast” by “directly pushing received transactions into a mempool of mining pools.”

CoinDesk’s invest: ethereum economy is a fully virtual event Oct. 14 exploring the ramifications for investors of the sweeping changes underway within the Ethereum ecosystem. Learn more.

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FinCEN Warns on Ransomware Attacks, Notes Increased Targeting of Government Entities

CoinDesk Crypto
6 years ago

Amid a rising incidence of ransomware attacks being reported this year, the U.S. Financial Crimes Enforcement Network (FinCEN) issued an advisory Thursday concerning such attacks.

  • FinCEN’s advisory notes that governmental entities, and financial, educational and health care institutions have been particularly targeted by these attacks. 
  • The financial watchdog’s advisory notes the “severity and sophistication” of such attacks has continued to rise. It adds that this also represents a major concern for financial intermediaries, like banks or exchanges, because quite often they’re the ones processing ransom payments for such attacks. 
  • The advisory said these attacks have increasingly targeted larger enterprises for bigger payouts, attackers tend to share resources to increase effectiveness of their attacks, and usually require payments be made using cryptocurrencies, most commonly bitcoin (BTC). 
  • It also notes ransomware attacks on small municipalities and healthcare entities have also seen an increase, likely due to the lack of sophisticated cybersecurity controls available to such entities. 
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FinCen Warns on Ransomware Attacks, Notes Increased Targeting of Government Entities

CoinDesk Crypto
6 years ago

Amid a rising incidence of ransomware attacks being reported this year, the U.S. Financial Crimes Enforcement Network (FinCen) issued an advisory Thursday concerning such attacks.

  • FinCen’s advisory notes that governmental entities, and financial, educational and health care institutions have been particularly targeted by these attacks. 
  • The financial watchdog’s advisory notes the “severity and sophistication” of such attacks has continued to rise. It adds that this also represents a major concern for financial intermediaries, like banks or exchanges, because quite often they’re the ones processing ransom payments for such attacks. 
  • The advisory said these attacks have increasingly targeted larger enterprises for bigger payouts, attackers tend to share resources to increase effectiveness of their attacks, and usually require payments be made using cryptocurrencies, most commonly bitcoin (BTC). 
  • It also notes ransomware attacks on small municipalities and healthcare entities have also seen an increase, likely due to the lack of sophisticated cybersecurity controls available to such entities. 
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Ethereum Layer SKALE Launches Mainnet Phase 2 With $78M Already Staked

CoinDesk Crypto
6 years ago

SKALE, an “elastic blockchain network” working to support Ethereum-based projects, has successfully deployed phase two of its mainnet.

  • With the news, announced Thursday, the Ethereum-as-a-service platform said it now has over $78 million in total value locked (TVL).
  • These staked millions come from more than 4,000 users and entities from 90 countries helping to secure some 130 network nodes across 46 validators, SKALE said in an announcement.
  • Jack O’Holleran, CEO and co-founder of SKALE Labs, said staking SKALE’s token, SKL, “delivers proof-of-stake security to SKALE Chains that will run DeFi, gaming, and Web 3 applications.”
  • The modular cloud-based network claims to offer developers of Ethereum-based dapps (decentralized apps) the ability scale to thousands of transactions per second at low cost, while reaching large numbers of Ethereum users.
  • With Ethereum’s gas fees having skyrocketed in recent months due to a surge in demand for DeFi products, stablecoins and more, SKALE says it can help reduce that burden with its “elastic” and configurable chains.
  • A representative said that the phase two launch “is significant because it will ease traffic and lower transaction costs on the Ethereum blockchain … so that developers can build dApps that live up to the high demands of consumers.”

Read more: SKALE Completes $5M Token Sale on ConsenSys’ Anti-Speculation Platform

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Malta Disputes Crypto Arbitrage Hub Arbitly’s Registry Claims

CoinDesk Crypto
6 years ago

Malta’s Financial Services Authority (MFSA) is calling out Arb Signals LTD, which describes itself as a cryptocurrency arbitrage trading platform, for claiming to be registered in Malta.

  • Arb Signals, otherwise known as Arbitly, “is NOT a Maltese registered Company NOR licensed” to handle crypto in Malta, MFSA said Thursday.
  • Arbitly’s website describes a platform that does away with other crypto exchange’s “remarkable market problems.”
  • It also claims the business is registered at a “beautiful office in central Malta.” Maltese authorities say otherwise.
  • Arbitly did not immediately respond to CoinDesk requests for comment.
  • MFSA routinely flags bogus claims by crypto brokers.
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Blockchain Bites: Dorsey Challenges Coinbase, Nasdaq Lists Diginex, Ethereum Miners Profit

CoinDesk Crypto
6 years ago

The Australian government is investing big in modern technology, Nasdaq saw its first crypto exchange operator listing and revenues are surging for Ethereum miners amid increased network activity. 

Top shelf

Australia modernizes
Australia will commit A$800 million (US$575 million) to invest in digital technologies as part of its coronavirus recovery plan, Prime Minister Scott Morrison announced Tuesday. The federal plan will see US$256.6 million for a digital identity solution, $419.9 million to fully implement the Modernising Business Registers (MBR) program, $22.2 million for small businesses training to utilize digital technologies and two blockchain pilot programs totalling $6.9 million. “The Plan supports Australia’s economic recovery by removing out-dated regulatory barriers, boosting the capability of small businesses and backs the uptake of technology across the economy,” Morrison said in the announcement. 

Nasdaq launch
Blockchain services firm Diginex has become the first crypto exchange operator to list on Nasdaq. The stock went live Thursday morning under the EQOS ticker symbol, a nod to the firm’s EQUOS.io trading platform. CoinDesk’s Nathan DiCamillo reports Diginex’s back-door listing came through a merger with a special-purpose acquisition company (SPAC). Diginex CEO Richard Byworth said he expects a mix of global retail and institutional investors to buy shares. Over time, he expects the majority of Diginex shareholders to be U.S. investors because of the Nasdaq listing.

Related: First Mover: Nine (Bullish) Bitcoin Predictions for Final Months of (Awful) 2020

Dorsey responds
Twitter CEO Jack Dorsey tweeted his disapproval of Coinbase CEO Brian Armstrong’s mission statement to keep his company free and clear of politics. Dorsey argued that by the very act of being a crypto exchange, Coinbase was always already engaged in politics. “Bitcoin (aka ‘crypto’) is direct activism against an unverifiable and exclusionary financial system which negatively affects so much of our society. Important to at least acknowledge and connect the related societal issues your customers face daily. This leaves people behind,” Dorsey tweeted. Armstrong made waves this week – in and out of crypto – when saying Coinbase, and its employees, should keep work and activism separate. 

Election predictions
Putting stake to their claims, many crypto-political gamblers have cast their vote predicting who might win the contentious U.S. presidential election. CoinDesk markets editor Lawrence Lewitinn looked at the data following this week’s first presidential debate and found many are betting incumbent President Donald Trump will lose in November. While bettors on decentralized betting platforms like Augur and futures markets on FTX aren’t as bullish on the challenger, former Vice President Joe Biden, he does have the odds. “Thus what’s true at the time of publication can change on a dime. It is now fewer than five weeks until Election Day. Buckle up!” Lewitinn warns. 

Mining profits
HIVE Blockchain has reported its best-ever quarter, as the mining firm raked in record fees from the frenzied activity in decentralized finance (DeFi) over the summer. The Toronto-listed mining company released its unaudited results Thursday, saying it mined a total of 32,000 ether (ETH) and 121,000 ethereum classic (ETC) in the second fiscal quarter ending Sept. 30. Per CoinDesk’s price data, that comes to nearly $11.8 million for mining ether, and a further $664,000 for ethereum classic – approximately $12.4 million at time of writing. The figures represent a near 30% increase from the 25,000 ETH that HIVE mined in the first quarter and a 50% increase in the same quarter in 2019.

Stealth launch
In the latest effort to smooth a path for buttoned-up investors, Talos, an institutional-grade conduit to the crypto ecosystem, is emerging from stealth mode to serve brokers, custodians, exchanges and over-the-counter (OTC) trading desks. The platform started out in 2018 and is backed by an impressive list of investors including Autonomous Partners, Castle Island Ventures, Coinbase Ventures and Initialized Capital. Over the past year or so, Talos has been quietly onboarding a core group of capital market participants, so that the platform can make its debut in a revenue-generating state.

Quick bites At stake

Related: Blockchain Bites: Coinbase’s Severance Offer, DeFi’s Latest Fund, Overstock’s Legal Win

SEC action
Wednesday, a U.S. judge ruled Kik’s $100 million token raise was in violation of securities laws. This is essentially the denouement to a year’s long battle between the Canadian messaging app and the U.S. Securities and Exchange Commission (SEC). Though Kik will have an opportunity to appeal. 

Responding to the SEC’s motion to summary judgment – where the regulator can ask to conclude a trial based on “undisputed material facts,” rather than engaging in a trial – U.S. District Judge Alvin Hellerstein found Kik’s “token distribution event” (TDE) satisfied the three prongs of the Howey Test. 

CoinDesk’s Nikhilesh De reports that initial coin offerings (ICOs) and token sales have been treated as unregistered securities sales for the most part by the SEC. 

Kik became a champion for crypto freedoms when challenging the SEC’s claims that its kin ICO – which the company pursued in lieu of VC backing – was an unregistered securities offering. The firm’s CEO Ted Livingston took a gamble, selling off his messaging business in 2019 and going all in on kin.

“We are getting sued by the SEC. We are going to go to court to fight them. We believe they are wrong,” Livingston told CoinDesk in 2019. Several times, and in different ways, he asserted: “It’s not that we did something wrong. It’s that we did it first.”

In a statement, Livingston said he was “disappointed in this ruling,” and that the company is considering its options, including a potential appeal.

Preston Byrne, a CoinDesk columnist and Anderson Kill lawyer, tweeted: “Tl;dr the court shredded Kik. Don’t f*** around with tokens in America.”

Notably, in a separate action, the SEC has ordered Salt Lending to offer investors refunds for its 2017 ICO. Salt has agreed to settle the action and will pay a $250,000 civil penalty to the Commission in the next 10 days.

Market intel

Crash for cash
Bitcoin faced selling pressure in September as the U.S. dollar rose against major currencies for the first time in six months. The cryptocurrency fell by over 7% over the period – the biggest monthly percentage decline since March, according to CoinDesk’s Bitcoin Price Index, when prices fell by nearly 25% as the coronavirus-induced crash in the global equity markets triggered a global dash for cash, sending the dollar higher. Bitcoin’s latest monthly decline is again accompanied by an uptick in the greenback.

Eth revenues
Ethereum miners earned over six times more in fees compared to those working on Bitcoin in September. Glassnode data shows Ethereum’s total transaction fees stood at an all-time high of $166 million for the month – far more than the $26 million taken in Bitcoin fees. Fee revenue on Ethereum first outpaced Bitcoin’s in June, the same month decentralized lender Compound released its governance token and kick-started the DeFi mania, CoinDesk’s Paddy Baker reports. 

Op-ed

Common cause
Matt Luongo, founder of Thesis, writes that Bitcoiners who stack sats and people who use decentralized finance share common cause. “Bitcoiners who stack sats should take a hard look at the decentralized finance (DeFi) platforms seeing explosive growth on Ethereum. While the optics may call to mind the wild speculation of 2017, the truth is that much of the growth in DeFi is driven by the same sound money principles as stacking,” he writes. 

Internet 2030

Amy Webb, a quantitative futurist and founder of the strategic foresight firm Future Today Institute, thinks the world can, indeed, get worse. In an interview with CoinDesk, as part of the Internet 2030 series, she lays out her vision for the world where big tech only gets bigger. The conversation has been excerpted below. 

Do you see a genuine way out through distributed technologies that may give people control over their own data? 

I worry about people who never update their passwords – should we entrust them to manage sensitive data? There are complex questions about data hygiene, data governance, compliance, risk. Distributed tech solutions solve some of our problems, but not all.

Few people have an understanding of how data are collected, by whom, for what purpose. There are lots of organizations proposing some kind of “ownership” model, where we individually would “own” our data. What does that mean? 

I want consumers to be much better aware of what data they are generating – that includes the digital emissions they’re releasing without realizing it. Think of all the metadata being generated by our connected devices, the ambient sounds in our homes and offices, our movements and gestures. All of those digital emissions, plus the PIIs collected now by contract tracing apps and biometric scanning systems – I mean, we’re swimming in data. 

What might the cultural or political effects be of an ever-greater consolidated and extractive web? 

We talk about privacy a lot, and journalists certainly write a lot of stories about data sharing, privacy and consolidation within the tech sector. But when it comes to everyday consumers and business leaders, it just doesn’t seem like these are priority issues. We’ll feel the effects when there is litigation, new policy or sweeping policy enacted.

Have an idea for what the future of the internet will look like, reach out to daniel@coindesk.com.

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Startup Backed by Uber Co-Founder Poaches CoinList President Andy Bromberg

CoinDesk Crypto
6 years ago

CoinList co-founder Andy Bromberg is leaving the token offering platform to helm Eco, a cryptocurrency built to marry savings and spending.

“I feel like the past eight years I have been searching nonstop for the thing that’s going to onboard the world to crypto,” Bromberg told CoinDesk in a phone call.

CoinList has been the premier site to launch a token while also providing the back-end that helped with compliant sales, going all the way back to 2017’s initial coin offering (ICO) boom, when it was formed out of a partnership between AngelList and Protocol Labs.

Related: Nearly $100M in Bitcoin Moved to Ethereum in July, Led by Retail Traders

Eco is a project that has been stealthy for some time. Originally launched as Beam (not the MimbleWimble privacy coin), it has rebranded to Eco thanks to involvement by founding advisor, Garrett Camp, who held the Eco brand. Camp is an Uber co-founder who backed the project through his venture fund, Expa.

Right now Eco is in beta with a limited set of users, trying it out with USDC. Later, the ECO token will launch as an ERC-20. Bromberg is excited about the game plan because, he argues, what the industry is missing is a way to bring people in.

“You need a migration path. It’s kind of what we’re seeing with DeFi [decentralized finance] with liquidity migration,” Bromberg said, referring to how SushiSwap enticed users to move their liquidity deposits from UniSwap to an upstart market maker.

Eco adoption

Eco will get money into user accounts much the same as banks do: by giving people a good reason to deposit their paychecks straight into the Eco app.

Related: CoinList Launches ‘Pro’ Exchange for Token Sale Buyers

They will do it, Bromberg argues, because it will allow them to drop some portion into crypto, like a savings account, where it will earn a far better return than a bank savings account ever could (enhanced returns come courtesy of the premium on stablecoins, thanks to DeFi).

Bromberg said between 2.5% and 5% interest, far far better than the under 0.05% interest most banks give savers these days.

But, also like a bank, it will make transacting easy and perhaps better. Eco will give rebates in its token on payments to major merchants, such as Amazon. With better saving and better spending, Bromberg believes people will want to use the app (which also happens to mean that they will be using crypto).

Read more: Crypto Lender Dharma Pivots to Stablecoin Savings Accounts

The idea is not unprecedented. This is basically the strategy that Alipay used to create the largest money market in the world.

Eco has raised $8.5 million, with Pantera Capital and Camp’s Expa leading the round, along with many angels, according to Bromberg.

CoinList departure

Bromberg noted that he’s leaving CoinList despite how well it’s doing. As a co-owner, he will continue as a special advisor to the firm, which will continue to be led by the remaining co-founder and CEO, Graham Jenkin.

During Bromberg’s tenure, CoinList pioneered key products for the space, such as airdrops and online crypto hackathons. It earned gold-standard status as the place to offer new tokens and backing from Square co-founder Jack Dorsey.

In his new role, which he begins Monday, Bromberg looks forward to bringing Eco’s token to life.

“The ECO currency will launch in six months or so and that currency, which is a low-volatility currency, is built from the ground up for payments,” Bromberg said.

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Braintrust Raises $18M to Bring DeFi-Thinking to the Gig Economy

CoinDesk Crypto
6 years ago

The next generation of the gig economy could look more like decentralized finance (DeFi) than Uber.

Announced Thursday, Braintrust, a tech talent marketplace that will essentially be owned by the IT freelancers and companies using it, has raised an $18 million strategic growth round, bringing its total funding to date to $24 million.

Employing a system of blockchain-based tokens to align the incentives of users and keep fees low, Braintrust boasts a nice mix of seasoned Silicon Valley VCs and crypto heavyweights like Pantera, Multicoin and Galaxy Digital. Notable joiners on today’s round are Omidyar Technology Ventures, the original online marketplace builders.   

Related: Ethereum Layer SKALE Launches Mainnet Phase 2 With $78M Already Staked

San Francisco-based Braintrust is another example of how the core tenets of DeFi’s multi-billion dollar science experiment can be applied to real-world use cases. Unlike the often vague “utility” of ICO tokens that were sold in the billions back in 2017, Braintrust is focused on solving the liquidity problem encountered when establishing two-sided marketplaces. 

Braintrust’s solution reflects the pooled flexibility and decentralized governance of protocols like Compound Finance, on which some of its software is based.

Read more: This Startup Is Forking Compound to Make Hiring More Efficient

Stepping back, Braintrust CEO Adam Jackson is a veteran at building two-sided marketplaces, including an e-commerce platform acquired by Intuit, an automotive marketplace acquired by Advanced Autoparts and another called Doctor on Demand. The common denominator is how expensive it can be to build liquidity into these networks in order to make them fly, and the effect this can have further down the line. 

Related: CipherTrace Outlines Regulatory Gray Zones Plaguing Booming DeFi Sector

“The typical playbook from eBay, all the way up to the gig economy players we see now is you raise hundreds of millions if not billions of dollars, and use that money to subsidize one or both sides of the marketplace,” said Jackson. “You’re essentially paying people to show up.”

And the way this typically plays out is the investors, who are the owners of the marketplace, sooner or later start taxing the network, turning up the fees. This then starts to erode the network effects of the business, said Jackson, creating divergent incentives between the operators of the service and the people who make a living there.    

The depressing nadir of this is encapsulated in the iniquities of Uber; the sort of stuff that has effectively lowered the minimum wage in the U.S., said Jackson. 

“While five guys in San Francisco became deca-billionaires, a third of all Uber drivers live below the poverty line, some of them even live in the cars they drive,” he said. “So I wanted to figure out how we could create a marketplace that is owned and controlled by its users, instead of investors who just want to tax it.”

Non-profit protocol

Jackson describes Braintrust as a “labor protocol” in the same way that Ethereum is a smart -contract protocol. As such, it’s more like a non-profit, a kind of public good, he said, upon which other businesses and use cases will flourish, rather like the composability, or the Lego-like functionality of building with DeFi. 

“Our business model with Braintrust involves lowering the fees to almost zero. We charge talent zero; we charge clients 10%, that’s just meant to kind of pay our bills and sustain us,” Jackson said. “By lowering fees to zero, you enable a whole new class of big transactions that could never touch a place like Upwork, because the fees are too high.”

Likewise, the project’s tokenomics are confined to governance and voting decisions (there will be a free issuance of tokens to Braintrust users in the middle of next year). The tokens are simply a way to get millions of users across the world on the same page because you can’t have someone in Ukraine or in India custody a share of a Delaware C-corp, said Jackson.

“A blockchain-secure token is a perfect value-capture incentive and governance instrument to replace a share of stock,” Jackson said. “And when I say replace, I don’t mean a financial token, there’s no dividend.”

Once the Braintrust community of freelancers is up and running, they will be able to use their tokens to vote on proposals such as fee levels, categories of work to be added, standards for allowing workers to join and so on.  

Braintrust’s token voting system is a fork of the governance framework created by DeFi money market Compound Finance, actually using some of the same code. (Compound CEO Robert Leshner is a close ally and advisor to the project.)

Jackson pointed out that he started Braintrust well before DeFi was a thing, but said the comparison is apt. 

“What DeFi figured out was how to use a token as an incentive mechanism to bootstrap liquidity in a two-sided marketplace – DeFi’s lend and borrow,” he said. “We’re doing the same thing, using a token to bootstrap liquidity in a two-sided marketplace. Ours is labor and clients.”

An ill wind

Following a two-year incubation and armed with a $6 million seed round, Braintrust’s private beta was just getting off the ground when the COVID-19 pandemic hit. 

“We thought we were toast,” said Jackson.

But after “a terrible few months,” clients started calling back, with more and more large firms accepting that working remotely was becoming the norm. “So that has become a big tailwind,” Jackson said. “Our Q3 was two times our pre-COVID financial plan for marketplace transactions and that has brought us to this fundraising round we are announcing.”

In terms of numbers, Jackson said Braintrust currently has several thousand testnet token holders and a waitlist of 40,000 for when the service goes public next year. There’s also an impressive roster of 50 or so Fortune 100 clients.

“We just won a job at NASA, where we have a group of engineers building software that will track packages to and from the International Space Station,” said Jackson. “We’re building car software for Porsche, insurance shopping software for Blue Cross Blue Shield. So these are big jobs. It’s not like a logo on a website.”

The thing that’s attracting big enterprise players like Porsche and Nestle are the low fees, Jackson reiterated, and not some kind of tech wizardry.

“It’s not because we are building on a blockchain,” he said. “These guys don’t give a shit about that.”

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Australia’s Central Bank Tells ASX to Push On With Delayed DLT Trading Platform

CoinDesk Crypto
6 years ago

The Reserve Bank of Australia (RBA) has told the country’s largest stock exchange to develop its blockchain-based trading platform without further delay.

  • In a public statement Thursday, the RBA and the Australian Securities and Investments Commission (ASIC) told the Australian Stock Exchange it should replace its aged Clearing House Electronic Subregister System (CHESS) in a safe but timely manner.
  • This comes days after ASX told shareholders it was yet again delaying the launch of its blockchain-based trading system.
  • Having confirmed it was replacing CHESS in December 2017, ASX originally planned to launch the new system in Q1 2020.
  • This was pushed back to August 2021 and delayed again this year until 2022, with the exchange citing disruption from the pandemic.
  • Both the RBA and ASIC told ASX getting the new system up and running was imperative for improving the overall performance of Australia’s financial system as well as bolstering investor’s confidence.
  • In a public reply, ASX said further delays were justified to ensure the DLT-based system was able to meet peak capacity.
  • ASX had seen an “extraordinary increase in activity levels” during the initial sell-off in mid-March and said it wanted to ensure its new system was able to handle this sort of capacity from the day of launch.
  • The new implementation timetable will be released later this month.

See also: ASX Under Pressure to Further Delay Rollout of DLT Settlement System

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Crypto Trading Platform BitMEX ‘Attempted to Evade’ US Regulations, CFTC, DOJ Charge

CoinDesk Crypto
6 years ago

The U.S. Commodity Futures Trading Commission (CFTC) and federal prosecutors are charging crypto trading platform BitMEX with facilitating unregistered trading and other violations.

The CFTC announced Thursday that BitMEX, CEO Arthur Hayes, company owners Ben Delo and Samuel Reed, and corporate entities HDR Global Trading Limited, 100x Holding Limited, ABS Global Trading Limited, Shine Effort Inc Limited and HDR Global Services (Bermuda) Limited allegedly offered U.S. customers illicit crypto derivative trading services.

Similarly, Audrey Strauss, the acting U.S. Attorney for the Southern District of New York announced that Hayes, Delo, Reed and Gregory Dwyer (BitMEX’s first employee) were being charged with violating the Bank Secrecy Act and conspiracy to violate the act. Reed has already been arrested; the others remain at large, an SDNY press release said.

Related: CFTC Charges Firm With Illegally Providing Leveraged Trading of Crypto, Gold

“One defendant went as far as to brag the company incorporated in a jurisdiction outside the U.S. because bribing regulators in that jurisdiction cost just ‘a coconut,'” said Assistant FBI Director William Sweeney Jr. in a statement. “Thanks to the diligent work of our agents, analysts, and partners with the CFTC, they will soon learn the price of their alleged crimes will not be paid with tropical fruit, but rather could result in fines, restitution, and federal prison time.”

In a press release, the CFTC alleged that BitMEX received some $11 billion in bitcoin deposits and made more than $1 billion in fees, “while conducting significant aspects of its business from the U.S. and accepting orders and funds from U.S. customers.”

The CFTC charged BitMEX with executing futures transactions on an unregistered board, offering illegal options, failing to register as a futures commission merchant, failing to register as a designated contract market, failing to implement proper know-your-customer rules and other counts, according to an attached legal filing.

BitMEX, which has reportedly been under investigation by the CFTC since at least July 2019, implemented mandatory KYC in April of this year.

Related: A New Bill Proposes to Put US Crypto Exchanges Under a National Framework

“BitMEX touts itself as the world’s largest cryptocurrency derivatives platform in the world with billions of dollars’ worth of trading each day. Much of this trading volume and its profitability derives from its extensive access to United States markets and customers,” the filing said. “Nevertheless, BitMEX has never been registered with the CFTC in any capacity and has not complied with the laws and regulations that are essential to the integrity and vitality of the U.S. markets.”

The CFTC is looking for a permanent injunction prohibiting the defendants from entering into any transactions “involving ‘commodity interests,'” soliciting funds for purchasing or selling commodity interests and applying for registration with the CFTC.

In addition, the agency wants the defendants to disgorge profits; provide full restitution to its customers; pay civil penalties; and rescind “all contracts and agreements” with any customers if those agreements violate the law.

“As a derivatives market regulator that supports innovation and ingenuity, it is imperative that we actively police trading platform activity and remove the bad apples so that legitimate, law-abiding marketplaces can flourish,” said CFTC Commissioner Brian Quintenz in a statement. “We will not stand for any participant brazenly flouting our rules. I look forward to the successful resolution of this matter and the beneficial impact it will have in this market by holding those who deliberately ignore the law accountable.”

BitMEX was not immediately available for comment.

Read the full CFTC complaint below:

Read the full SDNY indictment below:

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Ethereum 2.0 ‘Dress Rehearsal’ Gets a Second Shot With Zinken Testnet

CoinDesk Crypto
6 years ago

Ethereum developers will take a second whack at a final Ethereum 2.0 “dress rehearsal” after the first, Spadina, failed due to “critical peering issues,”  Ethereum Foundation researcher Danny Ryan said in a tweet Wednesday. 

  • The second testnet, named Zinken, will launch Oct. 12 at 12:00 UTC.
  • Ryan said he is “primarily looking for a clean client release process and minimal headaches for users” with Zinken.
  • The dress rehearsal testnets were created to give Ethereum stakers another practice run at moving ether (ETH) into the Eth 2.0 deposit contract, a necessary step before the new blockchain can start working.
  • Spadina hit a snag due to “configuration parameters” with Prysmatic Labs’ Prysm client, the team said in a post-mortem.
  • “We lagged behind in terms of taking Spadina seriously, having a detailed checklist, and overall having a release ready before the genesis event,” the team said.
  • Ryan added the dress rehearsal’s load was tilted unfavorably toward Prysm, which took on the lion’s share of the testnet’s users.
  • The same issue – stakers picking Prysm over the four other available Eth 2.0 clients – also presented itself during August’s Medalla testnet.

Read more: The One-Way ETH ‘Burn’ That Will Kick-Start Ethereum 2.0

CoinDesk’s invest: ethereum economy is a fully virtual event Oct. 14 exploring the ramifications for investors of the sweeping changes underway within the Ethereum ecosystem. Learn more.

Related: Ethereum 2.0 Developers Launch Spadina, a Three-Day Practice Testnet

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CoinDesk

Total Stablecoin Supply Nearly Doubled in Q3, Adding Record $8B

CoinDesk Crypto
6 years ago

Nearly $8 billion were added to the aggregate supply of stablecoins in the past three months, nearly doubling the industry’s supply of crypto dollars from $11.9B at the end of Q2 to just below $20B on Wednesday, according to Coin Metrics data.

  • “2020 seems to be the year of stablecoins,” said Paolo Ardoino, CTO of Tether, the company behind the largest stablecoin by market capitalization, tether, in a private message to CoinDesk.
  • Since this time last year, the supply of stablecoins has exploded by more than 1,200 percent.
  • In May, the total stablecoin supply passed $10 billion for the first time, as CoinDesk reported, closing Q2 just below $12 billion. Aggregate supply closed Q3 at $19.87 billion, nearly breaking above $20 billion on Sunday, according to data from Coin Metrics.
  • In addition to supply growth, Q3 saw stablecoins grow across multiple blockchains as Tether added support for both OmiseGo and Solana protocols. USDC, the second-largest stablecoin by market capitalization, expanded to the Algorand network, as CoinDesk reported.
  • USDC also joined tether as the only stablecoins with market capitalizations greater than $1 billion after adding $1.5 billion since the end of June.
  • According to Ardoino, the primary drivers of growth in the past quarter were the “explosion of decentralized finance (DeFi)” and a growing number of hedge funds and over-the-counter trading desks moving funds to tether for “faster arbitrage and reactions to market movements.”
  • Whether this stablecoin growth will continue is hard to predict, Ardoino said. But as the utility of stablecoins like tether continues to expand, he expects overall growth to continue for at least the next few months.
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CoinDesk

European Central Bank Moves to Trademark ‘Digital Euro’

CoinDesk Crypto
6 years ago

The European Central Bank (ECB) has applied for a trademark on the phrase “digital euro,” according to a Bloomberg report.

  • Bloomberg confirmed that ECB lawyers at the German firm Bock Legal applied for the European Union Intellectual Property Office’s “digital euro” trademark on Sept. 22. It has not yet been granted.
  • Officials have not actually committed to issuing a digital euro quite yet. Eurozone central bankers say they continue to study the issue, even as an alternative to cryptocurrency.
  • European Union member countries and banks are nonetheless gearing up in anticipation of a digitally native euro becoming a reality.
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CoinDesk

First Mover: Nine (Bullish) Bitcoin Predictions for Final Months of (Awful) 2020

CoinDesk Crypto
6 years ago

A lot of crypto investors like to think of bitcoin as a bet on higher inflation, or as a futuristic hedge on some imagined economic-armageddon scenario – Gold 2.0, as they say.

Lately, it’s looking more like Gold 2x: As bitcoin heads into the final months of 2020, the largest cryptocurrency’s 2020 investment returns are twice those of the yellow metal. 

Bitcoin gained 50% in the nine months through September versus gold’s 25%, during a year when a global pandemic ravaged economies and prompted central banks to print trillions of dollars. Many investors, while acknowledging that recessions are usually deflationary, say the extra flood of money could eventually send consumer prices spiraling higher.

Related: Bitcoin Posts Biggest Monthly Price Loss Since March

And bitcoin’s performance looks especially stark when compared with the Standard & Poor’s 500 Index, which has returned 3.5% this year. A gauge of the bond market’s performance is up 19%.

CoinDesk’s Bradley Keoun and Daniel Cawrey rounded up commentary from nine crypto analysts and investors going into the rest of the year. Global conditions could get better, or worse still, but the analysts are pretty bullish.

They may be wrong, and the billionaire investor Warren Buffett has said that bitcoin has “no value,” but the tone is strikingly different from the skepticism that many Wall Street analysts now express toward the lofty valuations in stock and bond markets. 

Denis Vinokourov, Bequant: The market is testing the upper bounds of its recent range and, with the absence of fresh macro news flow that could dampen the risk on sentiment, bitcoin may just find enough momentum to break through the $11,000 price level and, more importantly, stay there. Open options interest continues to show signs of recovery.

Related: Why Hardnosed Bitcoiners Should Learn to Love DeFi

Charlie Morris, ByteTree: The vast majority of bitcoin’s past gains coincided with periods of a flat or weak dollar. The implication is that bitcoin is likely to be a powerful hedge against U.S. dollar weakness. How likely is that? Quite likely given it is Fed policy.

IntoTheBlock: There are two areas of strong resistance for bitcoin based on on-chain data. The first one is the current resistance it is facing around the $11,000 mark, where 626K BTC has been bought by 1.17 million addresses. This creates resistance from many of these addresses looking to close their positions to break-even. After that, there is another similar resistance level between $11,400 and $11,700 as shown in the graph above. The good news is that past these resistance levels, there is likely to be less selling pressure past $12,000.

Matt Blom, Diginex: Despite the propensity to buy, hold and not move bitcoin, the network remains buoyed by growth. The only thing going sideways in bitcoin is the price.

Jason Lau, OKCoin: Bitcoin’s price momentum is still positive, with its pullbacks leaving higher highs. This is signaling a possible further continuation of this upwards move. Bitcoin perpetual swaps funding rates have started turning positive. This indicates that investors are more willing to go long at current price levels.

George McDonaugh, Keld van Schreven, Kr1 Plc: We are currently seeing some correlation [involving] bitcoin, other digital assets and movements in the equity and gold markets. We expect the trend of strengthening balance sheets and diversification into bitcoin to continue as the world’s monetary policies shift evermore towards unbridled money printing and higher inflation.

QCP Capital: The key support from the early month lows of $10,000 on BTC and $310 on ETH both saw substantial buying demand. This prevented any cascading short gamma selling into quarter-end, which had been our fear if those levels broke.

Constantin Kogan, BitBull Capital: We’re seeing a spike in activity by new participants coming into BTC not yet reflected in price. It doesn’t happen often. This is what traders call a divergence. In this case the trend looks more bullish.

Patrick Tan, Novum Alpha: While it may be tempting to subscribe to the notion that bitcoin will represent a safe haven in times of instability, there’s little evidence to support that view – especially since gold, tech stocks and bitcoin have all tracked each other closely this year. A further round of stimulus, or a smoother than expected political transition, could pave the way for bitcoin to move higher as politicians get past electing and get back to spending.

Bitcoin Watch

Bitcoin is trading in the narrow range of $10,600 to $11,000 for the seventh straight day. 

The long-term sentiment remains bullish, as evidenced by a continued decline in the number of coins held on cryptocurrency exchanges – a sign of investors shifting to holding strategies. 

In the short run, the cryptocurrency could continue to take cues from the U.S. dollar and stock markets.

“We can’t ignore the greenback’s breakout from its recent consolidation and expect a continued rally in the dollar to weigh over BTC,” said Matthew Dibb, CEO of Stack Funds.

The cryptocurrency fell by over 7% in September, confirming its biggest monthly decline since March as the oversold dollar index rose nearly 1.8%. Bitcoin, gold and S&P 500 have moved largely in the opposite direction to the dollar index since March. 

– Omkar Godbole

Token Watch

Ether (ETH): Record $166M Ethereum fees last month were six times bigger than bitcoin’s. 

SushiSwap (SUSHI): Collateral locked into “vampire mining” protocol plunges to $354M from $1.4B a few weeks ago.  

Trump tokens (TRUMP): Prices for FTX crypto exchange’s “futures contract” tracking U.S. president’s chances of staying in office slide after this week’s presidential debate.  

Chainlink (LINK), Loopring (LRC), Compound (COMP): DeFi system MakerDAO (MKR, DAI) community votes to add support for Chainlink’s LINK, Loopring’s LRC and Compound’s COMP.  

What’s Hot

Diginex stock goes live on Nasdaq following $50M in SPAC and private funding (CoinDesk)

Talos, institutional-grade conduit to crypto ecosystem, emerges from stealth mode to serve brokers, custodians, exchanges and over-the-counter trading desks (CoinDesk)

Hive Blockchain says DeFi buzz led to record fees in quarter ended Sept. 30, with a 50% year-over-year increase in ether mined to 32K ETH (CoinDesk)

Canaan Creative, publicly traded maker of cryptocurrency mining computers, suffered its fourth straight stock-price decline in the third quarter (CoinDesk)

Compound’s Leshner says the “pace of people trying new things is the highest it’s ever been” as DeFi enters “lightspeed era” (CoinDesk)

BitFlyer cross-border initiative allows European traders to access bitcoin/Japanese yen trading pair (CoinDesk)

Twitter CEO Jack Dorsey tweeted his disapproval of Coinbase CEO Brian Armstrong steering his company away from corporate activism (CoinDesk)

With the first Trump–Biden debate now smoldering behind us, the betting markets have picked their winner and it isn’t Donald Trump (CoinDesk)

The U.S. Securities and Exchange Commission has ordered Salt Lending to offer investors refunds for its 2017 initial coin offering (ICO) (CoinDesk)

Analogs The latest on the economy and traditional finance

American Airlines and United Airlines have begun the process of instigating 32,000 furloughs or temporary leave as hopes for further economic stimulus fades fast (Reuters)

Speaker of the House Nancy Pelosi and Treasury Secretary Steven Mnuchin did not reach a deal for coronavirus stimulus on Wednesday and instead want to do some more talking (CNBC)

U.S. Federal Reserve is set to bar big banks from share buy backs while having to cap their dividends under the new regulator’s policy (Reuters)

The U.S. has banned palm oil imports from Malaysia’s largest producers over concerns of forced labor and sexual assualt (SCMP)

Biden and Trump both vowed to support the electric vehicle industry during the 2020 presidential debate on Tuesday (CNBC)

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CoinDesk

Dapper’s NBA Top Shot Launches Out of Beta With Samsung Galaxy Store Deal

CoinDesk Crypto
6 years ago

It’s one game down and as many as six to go in this year’s NBA Finals, and while the unusual season has kept fans outside the arena Dapper Labs is hoping to let them own a piece of on-court action.  

Announced Thursday, Dapper Labs is rolling out its blockchain-based collectibles game, NBA Top Shot, to the public. Currently in its beta version and developed in partnership with the National Basketball Association, Top Shot will also be available to U.S.-based Samsung users on the Galaxy app store.

Built using non-fungible tokens (NFTs) minted on the purpose-built Flow blockchain, Top Shot lets users collect, showcase and trade in-game “moments” which capture moves made on the real court. 

Related: Thirst Traps Explode on NFT Platforms, With Predictably Controversial Results

For instance, a user can purchase a moment based on a James Harden dunk and showcase it, sell it or swap it for, say, a Steph Curry three-pointer.

The platform has managed to build a strong following under an invitation-only beta. Rolled out in May after scoring financial backing from a handful of NBA stars, the platform has since invited 17,000 users on board, recorded 58,081 transactions and raked in $2 million in revenue, according to data shared with CoinDesk. 

Gameplay options coming soon

NFTs are unique digital tokens that allow the issuer to embed identifying information about the item (be it fine art, selfies or a basketball clip) into the token’s smart contract while also maintaining a corresponding ownership ledger on the blockchain. 

The embedded identifying information provides protection against the duplication of such items, and the ownership record ensures that users can verify who owns what and carry out transactions. 

Related: The Inevitable Marriage of Yield Farming and NFTs, Explained

Read more: NBA’s Spencer Dinwiddie, Andre Iguodala and More Join Dapper Labs $12M Funding Round

While Top Shot’s current interface uses NFTs to combine trading cards with digital clips, Dapper Labs also said it is developing a more immersive experience within Top Shot called “Hardcourt.” 

“It’s a 3D game where you control players on a basketball court,” Roham Gharegozlou, CEO of Dapper Labs, said in an interview. He explained that once a user has put together their team of desired players for the game, they could then use the “moments” they own to upgrade their players’ abilities. 

“If I have a bunch of LeBron [James] dunks, I can train my Steph Curry to be as good at dunking as LeBron by equipping him with a lot of LeBron moments,” he said.

Read more: Dapper Labs–USDC Integration Helps NBA Collectibles Game Clear $2M in Revenue Since June

By adding this immersive interface to its platform, Dapper hopes to attract more mainstream users that have largely stayed away from the NFT-enabled gaming world. 

“It’s a high graphical experience, because all of our user research showed that that’s what mainstream fans want to see,” said Gharegozlou, adding:

“Crypto fans would be OK with a trading card game or fantasy sports thing. But to actually go mainstream and have a game that tens of millions of people play every day, you need to kind of make it look as good as all the options that are out there.” 

Dapper Labs said Hardcourt is under internal testing and is slated for release toward the end of Q4. 

Notably, Top Shot allows users to make payments using both fiat (through credit cards) and cryptocurrencies. Even though credit cards and crypto payments make up equal shares of the platform’s revenue, credit cards account for three-quarters of all transactions made, according to data shared by Dapper Labs.

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CoinDesk

CipherTrace Outlines Regulatory Gray Zones Plaguing Booming DeFi Sector

CoinDesk Crypto
6 years ago

The exploding decentralized finance (DeFi) space is now firmly on the radar of regulators and concerns are growing that it could become a magnet for criminal or nefarious activity, according to blockchain analytics provider CipherTrace.

DeFi has grown from a science project into a $11 billion market, one in which there appears to be almost zero know-your-customer (KYC) provision and a considerable risk of potential manipulation.

DeFi is such a young space, it’s hard to tell whether the sort of money-laundering activities typically associated with cryptocurrency mixing services will migrate there. But preliminary findings after the recent KuCoin hack suggest this new generation of decentralized exchange (DEXs) could be added to crypto mixers as an attractive service for crooks, said CipherTrace CEO Dave Jevans.

Related: Why Hardnosed Bitcoiners Should Learn to Love DeFi

“I think there’s a lot of concern that these platforms can be used as effectively the next generation of money-laundering mixing services,” said Jevans. “If I can put my stuff into a DeFi contract, it gets mixed up with other people’s money when it comes back out. Because there’s no tracing and there’s no KYC, it effectively is operating as an old-school crypto money-laundering service.”

In the case of the KuCoin hack, the thieves used five DEXs – Uniswap, Kyber Network, DEX.AG, Tokenlon, and 1inch.exchange – and have so far sold over $17 million in tokens that could be frozen by the owners of their respective projects, according to analysis by crypto sleuthing service Elliptic.

Read more: Ocean Protocol Forks to Retrieve Tokens Stolen From KuCoin Exchange

But while these DeFi services are acting as a useful layer to exchange tokens, they are not actually covering the hacker’s tracks at this stage, said Elliptic co-founder Tom Robinson.

Related: Record $166M Ethereum Fees Last Month Were 6 Times Bigger Than Bitcoin’s

“The hacker isn’t using DEXs to hide their tracks, they’re doing it so they can sell their stolen tokens,” Robinson said via email. “The token issuers (Tether, Ocean Protocol, etc.) are freezing accounts or reversing transactions associated with the stolen funds in order to aid their recovery. So the hacker needs to convert them into something like ether, which is much less likely to be taken from them.”

On mixers

Speaking hypothetically, there are some other interesting reasons why DeFi could benefit potential money launderers, said Jevans of CipherTrace. Ironically, interacting with a smart contract (computer programs that run on top of blockchains, and on which DeFi is based), could provide a layer of safety and security for the hacker, Jevans said.

“Because these are contracts, it’s much harder to get ripped off,” said Jevans. “Some of the mixing services, when they get sufficient volume, they pull an exit fraud and just basically stop working. That’s the way a bunch of these guys make money; they’ll charge low fees on mixing and wait until there are a few tens of millions in the hopper, then they just take off.”

Another risk for criminals using crypto mixers is the chance the service itself gets busted by law enforcement and the funds are seized. 

Read more: ‘Inherently Borderless’: Acting OCC Chief Talks Crypto, State Licenses and DeFi

“We’ve seen a number of seizures and arrests. Well, if your money was in there at the time, I assure you, you’re not getting it back,” Jevans said.

And despite the fact that gas fees on Ethereum-based DeFi apps are becoming ridiculously high, it’s still cheaper than using a mixer, Jevans added.

“Mixers are expensive,” he said. “DeFi platforms present less risk and the fees are less, too. In my view, a DeFi platform is also better because you’re mixing your bad funds with a lot of good funds,” Jevans said, adding:

“I would argue that mixers – and this is just my opinion – have a disproportionately high amount of criminal activity going through them. Whereas DeFi has a lot of people who want to get in on the next investment trend.”

DEXs are very different from mixers because the flow of funds through them is clear to see on the blockchain, said Robinson of Elliptic.

“Mixers are used to break the blockchain trail by making it difficult or impossible to link incoming funds to outgoing funds,” Robinson said. “In contrast, this is very easy to do with DEXs – the operation of the smart contract is auditable on the blockchain, so the incoming transaction in one asset and the outgoing transaction in another asset, are clear to see.”

No KYC

DeFi platforms contribute a particular black spot on the overall crypto KYC landscape, the general topic of the report released Thursday by CipherTrace. But DeFi is undoubtedly on the regulatory radar, as evidenced by recent comments from U.S. Securities and Exchange Commission (SEC) crypto czar Valerie Szczepanik. 

“We’ve seen [DeFi] projects that are subject to vulnerabilities, attacks, hacks, manipulation,” Szczepanik said at the Parallel Summit on Sept. 18, 2020. “We’ve seen structures that purport to enable users to lend money, earn interest, borrow money, exchange, take positions; these are all financial activities and they are likely subject to various laws already, including securities law, potentially banking and lending laws – definitely AML/CTF laws.”  

So are DeFi platforms thinking about adding KYC at any point in time? Jevans doesn’t think so.

“From what we have experienced over the last couple of months is that they don’t want to have anything to do with KYC,” Jevans said. “They just say they are writing software and, while they get beneficial funds from it, they are not ‘operating’ it. But it’s interesting to see what the governance of the platforms is, which often happens to be from venture capital-backed companies.”

Read more: DeFi Is Just Like the ICO Boom and Regulators Are Circling

Indeed, the CipherTrace report suggests this could be an avenue a regulator like the SEC might pursue, especially when faced with a U.S.-domiciled firm like Uniswap inhabiting a kind of decentralized lacuna. 

“While the operations of DeFi exchanges are decentralized, the scale of the governance decentralization varies greatly. For instance, Uniswap – located in San Francisco – has received venture investment capital from Andreessen Horowitz and Union Square Ventures,” states the CipherTrace report. 

Andreessen Horowitz and Union Square Ventures did not return requests for comment by press time. 

“So there is a place to go if you are a lawmaker or a regulator,” said CipherTrace’s Jevans. “At the end of the day, all of the governance is centralized by a for-profit company.”

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CoinDesk

eToro to Offer Staking Rewards for Holders of TRON and Cardano

CoinDesk Crypto
6 years ago

Multi-asset exchange eToro is launching a new service that will offer rewards for “staking” tokens, beginning with TRON and ADA.

  • The trading platform announced Thursday that the service, one of the first to offer staking for Cardano’s native ADA token, will go live later this month.
  • eToro will effectively execute the staking on behalf of its users.
  • Compared to proof-of-work protocols, which rely on miners running powerful computer hardware to confirm transactions, proof-of-stake (PoS) networks rely on the users themselves to stake, or lock up, their tokens and provides rewards for confirming transactions.
  • eToro’s service is aimed to make staking more accessible for everyday users, the firm said in a statement. The exchange will email reports to users showing how much income they’ve made on a monthly basis.
  • A spokesperson told CoinDesk the service will be free of charge for eToro clients.
  • The number of fully functioning PoS networks is growing. Cardano, which has a market cap of $3.25 billion, launched its “Shelley” staking protocol in late July.
  • The month before, Coinbase Custody announced plans to offer secure Cardano staking sometime in Q4 2020.

See also: DeFi Meets Universal Basic Income With Just-Launched Project From eToro

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CoinDesk

Bitcoin Posts Biggest Monthly Price Loss Since March

CoinDesk Crypto
6 years ago

Bitcoin faced selling pressure in September as the U.S. dollar rose against major currencies for the first time in six months.

  • Bitcoin fell by over 7% over the period, the biggest monthly percentage decline since March, according to CoinDesk’s Bitcoin Price Index.
  • Back in March, prices fell by nearly 25% as the coronavirus-induced crash in the global equity markets triggered a global dash for cash, sending the dollar higher.
  • Bitcoin’s latest monthly decline is again accompanied by an uptick in the greenback.
  • The Dollar Index (DXY), which tracks the greenback’s value against majors, gained nearly 1.8% in September – the first monthly rise since March.
  • “BTC seems to be sensitive to a stronger dollar in the short term,” Mike Alfred, CEO of Digital Assets Data, told CoinDesk in an email.
  • Bitcoin has moved largely in the opposite direction to the DXY since the coronavirus crisis slammed markets in March.
  • The top cryptocurrency by market cap, bitcoin rallied from $3,867 to $12,400 in the five months to mid-August before falling back to $10,000 last month.
  • Heading the opposite way, the DXY topped out at 103.00 in March and fell to a 16-month low of 91.75 in August. The index rose back above 95.00 last month.
  • The S&P 500, Wall Street’s equity index, and gold have moved more or less in lockstep with bitcoin over the past 6.5 months.
  • However, these correlations may be coincidental, according to Alfred – that is, the dollar has been influencing price action in the major markets as well as bitcoin.
  • The Federal Reserve’s massive liquidity injections drove the dollar lower in the second quarter and the majority of the third quarter, yielding a rally in all major assets priced in the greenback.
  • As such, the DXY’s corrective bounce in September put pressure on bitcoin, gold, and equities. The greenback looked at its most oversold in nearly 40 years during August.
Looking forward
  • Long-term sentiment remains bullish, as evidenced by a continued decline in the number of coins held on exchanges – a sign of investors shifting to holding strategies.
  • In the short run, the cryptocurrency could continue to take cues from the U.S. dollar and the stock markets.
  • “We can’t ignore the greenback's breakout from its recent consolidation and expect a continued rally in the dollar to weigh over BTC,” said Matthew Dibb, CEO of Stack Funds.
  • Additional bearish pressure may emerge from potential outflows from tech-heavy stocks and the Nasdaq, Dibb added.
  • According to a tweet from chart analyst and trader Josh Rager, bitcoin’s late September recovery from $10,000 to $10,800 has kept the bullish price structure intact.
  • Rager now foresees a green month for markets in October ahead of the U.S. elections.
  • At press time, bitcoin is trading near $10,888, up 1.93% on the day.

Also read: Bitcoin May Return to Center Stage After Ethereum’s White-Hot Summer

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CoinDesk

Diginex Stock Goes Live on Nasdaq Following $50M in SPAC and Private Funding

CoinDesk Crypto
6 years ago

Blockchain services firm Diginex has become the first crypto exchange operator to list on Nasdaq. The stock went live Thursday morning under the EQOS ticker symbol, a nod to the firm’s EQUOS.io trading platform.

  • Diginex’s back-door listing came through a merger with a special-purpose acquisition company (SPAC) called 8i. 
  • After raising private capital and redeeming shares of the SPAC, the company now has $50 million in capital for strengthening its balance sheet and investing in the business.
  • Diginex CEO Richard Byworth said he expects a mix of global retail and institutional investors to buy shares. Over time, he expects the majority of Diginex shareholders to be U.S. investors because of the Nasdaq listing.

Read more: Diginex Going Public Is About More Than a Nasdaq Ticker Symbol

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CoinDesk

Institutional Crypto Platform Talos Emerges From Stealth Mode

CoinDesk Crypto
6 years ago

In the latest effort to smooth a path for buttoned-up investors, Talos, an institutional-grade conduit to the crypto ecosystem, is emerging from stealth mode to serve brokers, custodians, exchanges and over-the-counter (OTC) trading desks.

The platform started out in 2018 and is backed by an impressive list of investors including Autonomous Partners, Castle Island Ventures, Coinbase Ventures and Initialized Capital. 

Over the past year or so, Talos has been quietly onboarding a core group of capital market participants so that the platform can make its debut in a revenue-generating state, said Anton Katz, the firm’s co-founder and CEO.

Related: This Ethereum Startup Is Building a ‘DeFi Firewall’ for Institutional Investors

“It’s not that we were really hiding, but it’s just that we come from a capital markets background and would tend to shy away from talking about things before they are ready; when you’re selling to institutions that can be frowned upon,” Katz said in an interview. “Now I think we have reached a good point, working with a good set of customers and the platform is in a more mature state.”

Talos provides tools to support clients through the full trading lifecycle, from price discovery through to clearing and settlement, the company said.

Read more: Behind ‘Prime Broker’ Buzzword Lies a Complex Strategy Game for Crypto Firms

“One of the biggest keys to widespread institutional adoption of digital assets is a technology infrastructure that unites all market participants and gives them the confidence to operate at scale,” Arianna Simpson, founder of Autonomous Partners, said in a statement. “That is exactly what Talos has built, and we are excited to help them realize their ambitious launch and growth plans.”

Institutional herd 

Related: Bequant, Now in Crowded Prime Brokerage Race, Adds Signature Bank Integration

The last couple of years have seen much talk about an institutional herd moving imminently into crypto; how has this landscape changed in that time and have these expectations been met?

“I think it’s important to keep in mind that the institutional sector does not have an on/off switch,” said Katz. “It’s not like they’re either in or out. There are really a couple of different groups of institutions, some of them are a little bit more risk-averse, some of them less, and what we are seeing right now are less risk-averse players becoming the early adopters.”

Read more: This Ethereum Startup Is Building a ‘DeFi Firewall’ for Institutional Investors

The design requirements for crypto platforms are quite different from regular capital markets, Katz explained. On the pre-trade side of things, when compared to capital markets the data being collected for crypto is a lot less reliable and has to be collected in multiple places and cleaned properly. 

In terms of trading there are things like a treasury management aspect, so moving capital between different exchanges, which again is something that doesn’t really exist in capital markets. While on the post-trade side, capital markets are much more secure and standardized.

“I would say you don’t have to be as defensive when you’re building your platforms in capital markets as you do in crypto,” said Katz. “The precision that you need with every single trade, it calls for completely different system design.”

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