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Australia Post Now Lets Customers Buy Bitcoin at Over 3,500 Outlets

6 years 3 months ago

Australians can now purchase bitcoin at outlets of one of the country’s oldest organizations, its postal service.

In a collaborative effort between Australia Post and Bitcoin.com.au, customers will now be able to use the Post Billpay feature to purchase bitcoin and other cryptocurrencies at over 3,500 post office shops across the country.

AusPost confirmed the news to CoinDesk via email on Friday.

Related: A Key Thesis for Bitcoin’s Long-Term Bull Market Just Got a Knock

The post service will accept cash and card payments for digital currency purchases made via Bitcoin.com.au, a cryptocurrency exchange based in Cremorne, Victoria.

See also: Kraken Launches Crypto Exchange Service in Australia

“This is a major milestone for digital currency in Australia and around the world. It proves that there are established businesses and organizations that want to learn about new technologies by doing, and not by blocking,” the exchange’s CEO, Holger Arians, said.

Australia Post, formerly Postmaster’s General Department, is one of the country’s longest-running organizations, established as a private entity in 1809 with ex-convict Issac Nicols appointed as its first postmaster.

Related: First Mover: In the Cryptocurrency Markets, No Two Exchanges Are Alike

“Australia Post has for a long time played an important role in the community to make services accessible to all,” said Susan Nicholson, AusPost’s head of business and government financial services. “Post Billpay has been one of Australia’s most trusted bill payment methods for over 20 years, and we’re pleased to now provide the ability for bitcoin bills to be paid at a post office, which will come with a product enhancement that offers ID verification and real-time bill payment confirmation back to the biller.”

See also: Australian Woman Charged With Unlawfully Exchanging Over $3M in Crypto

According to the Australian Taxation Office, between 500,000 and 1 million residents of the country already own crypto assets. Bitcoin.com.au said it hopes to increase that number via its new collaboration.

“Our mission is to make bitcoin safe and easy for every Australian”, Arians added. “For many people, paying for bitcoin at an Australia Post office feels safer than transferring funds online – particularly for first-time buyers.”

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New York Regulator Adds 3-Strike Rule for BitLicense Applicants

6 years 3 months ago

New York’s financial watchdog has warned crypto companies that their BitLicense applications could be thrown out without warning if its feedback is not heeded.

In an update Wednesday, New York’s Department of Financial Services (DFS) said a new three-strikes rule would authorize it to deny any applications that didn’t address or consider any deficiencies highlighted by the regulator.

The warning reads, “[I]f all deficiencies involving a particular application requirement or set of requirements have not been fully and effectively addressed by the end of the response period for the third deficiency letter … the DFS may, without further notice, deny the application.”

Related: EU Creating a Regulatory Regime for Cryptocurrencies, Says Economic Chief

The new rule coincides with the fifth anniversary of the BitLicense, which saw the regulator update its framework for businesses, like exchanges and wallets providers, to operate legally in New York State. To date, only 25 companies have been approved, with 19 receiving actual licenses and six receiving limited purpose trust charters.

The most recent successful applicant was derivatives clearinghouse ErisX, which received its BitLicense at the start of May.

See also: BitLicense at 5: For Startups Regulated Overseas, New York Isn’t So Tough

Indeed, part of the motivation behind this week’s rule change is to help streamline the application procedure. The regulator argues that the three-strike rule will encourage applicants to make sure they have fully addressed all the concerns laid out in the deficiency letters before resubmitting.

Related: Blockchain Bites: BitLicense at 5, Lawsky’s Fallacy and Hehmeyer’s Pivot

“DFS believes this policy will benefit the majority of applicants that diligently advance their applications once they are under substantive review, by allowing for a more effective use of DFS resources,” the note reads.

Another aspect of this week’s rule change is a new checklist feature that companies can use to ensure they have completed all steps required, such as providing all the right documentation before they send off their application to the regulator.

But rather than getting easier, as some publications have suggested, theDFS has told applicants they need to step up their game even further.

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EU Creating a Regulatory Regime for Cryptocurrencies, Says Economic Chief

6 years 3 months ago

The European Union is preparing a new cryptocurrency regime that could include stricter requirements for “global stablecoin” projects, such as Libra.

The bloc’s lead economics minister, Valdis Dombrovskis – or to give him his full title, the European Union’s Executive Vice President of the European Commission for An Economy that Works for People – said Europe had to seize the opportunity to become one of the main rule-makers for digital finance.

“This is a good chance for Europe to strengthen its international standing and to become a global standard-setter, with European companies leading new technologies for digital finance,” he said during a speech at the Digital Finance Outreach 2020 earlier this week.

Related: Australia Post Now Lets Customers Buy Bitcoin at Over 3,500 Outlets

And their first test case, Dombrovskis said, would be cryptocurrencies.

Although some cryptos, such as security tokens, are pretty well-covered by European law, whole bundles of them, most notably stablecoins, remain entirely unregulated.

“Lack of legal certainty is often cited as the main barrier to developing a sound crypto-asset market in the EU,” Dombrovskis said.

Some EU members have taken matters into their own hands, which damages market integration and makes it difficult for companies to operate across the whole trading bloc.

Related: New York Regulator Adds 3-Strike Rule for BitLicense Applicants

A new regulatory regime for cryptocurrency will not only cover unregulated digital assets, but it will also consolidate and homogenize existing standards across the continent, Dombrovskis said.

See also: Italian Banks Are Ready to Trial a Digital Euro

Set to be unveiled later this year, Dombrovskis, who was formerly the prime minister of Latvia, didn’t give much away on what the future regime might look like, although he emphasized that it would support and stimulate innovation.

A pilot scheme would allow regulators to provide a space for new experimental solutions to be monitored and observed, he said.

While Dombrovskis’ speech contained few specifics, he did say that the EU was particularly keen to bring stricter rules on any project deemed to be a “global stablecoin.”

What exactly Dombrovskis means by “global stablecoin” isn’t immediately clear. However, it appears one of the key components is that it’s used instead of traditional fiat currencies and can facilitate a greater number of transactions that cross national borders.

That might be an inference to initiatives such as Facebooks’ Libra. Stablecoins, possibly like Libra, that operate on a global scale can “raise additional challenges,” Dombrovskis said – they can disrupt financial and monetary stability.

“Overall, our approach will be proportionate and relate to the level of risk. That means lighter rules for less risky projects,” Dombrovskis concluded. In the case of global stablecoins, such as Libra, “their potentially systemic role [means] our rules will be stronger.”

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Binance-Backed Blockchain Auditing Firm Partners With Hdac to Track Internet-of-Things Devices

6 years 3 months ago

Auditing firm CertiK and Hdac are teaming to bring Internet of Things (IoT) devices onto a blockchain.

Hdac’s blockchain platform attempts to combine secure authentication, seamless mapping and machine-to-machine transactions in a blockchain network with IoT devices. CertiK’s team of blockchain engineers worked closely with Hdac to audit the design and implementation of its codebase, which is expected to be released in the near future, the companies told CoinDesk on Friday.

Hdac had previously tapped CertiK to audit its codebase, where the security firm learned of Hdac’s plans to build blockchain solutions, a CertiK spokesperson said. This led the company to seek out a formal partnership. A codebase is a collection of source code used to build software systems and acts as a general repository.

Related: Base Layer Wars Heat Up With Another $12M Committed to AVA Labs’ Avalanche Blockchain

“Because of their [Hdac’s] future plans, we decided it would make sense to formally partner with one another as a public promise of Hdac’s focus on security and a symbol of CertiK’s ability to support larger enterprise-level solutions such as Hdac’s,” CertiK’s marketing manager, Connie Ngo, said in an email.

See also: Ford Test Driving Blockchain for Energy-Efficient Vehicles

In addition to their formalized partnership, CertiK co-founder Ronghui Gu will also be joining Hdac’s advisory board.

Hdac Technology AG is headquartered in the crypto-friendly region of Zug, Switzerland and was founded by CEO of Hyundai BS&C, Dae-sun Chung. Hyundai BS&C is an independent IT and construction company that bears no legal connection with the car company Hyundai Motors.

Related: Cambodia Plots a Dollar-Free Future With Blockchain-Based Payments: White Paper

The security firm is best known for receiving “multiple millions” of dollars from Binance’s blockchain and crypto incubator wing Binance Labs in October 2018. Hdac, on the other hand, entered into a strategic partnership with blockchain startup CasperLabs to jointly research and develop consensus mechanisms and seamless integration between the HDAC and CasperLabs blockchains back in June of last year.

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Binance-Backed Blockchain Auditing Firm Partners With Hdac to Track Internet of Things Devices

6 years 3 months ago

Auditing firm CertiK and Hdac are teaming up to bring Internet of Things (IoT) devices onto a blockchain.

Hdac’s blockchain platform attempts to combine secure authentication, seamless mapping and machine-to-machine transactions in a blockchain network with IoT devices. CertiK’s team of blockchain engineers worked closely with Hdac to audit the design and implementation of its codebase, which is expected to be released in the near future, the companies told CoinDesk on Friday.

Hdac had previously tapped CertiK to audit its codebase, where the security firm learned of Hdac’s plans to build blockchain solutions, a CertiK spokesperson said. This led the company to seek out a formal partnership. A codebase is a collection of source code used to build software systems and acts as a general repository.

Related: Base Layer Wars Heat Up With Another $12M Committed to AVA Labs’ Avalanche Blockchain

“Because of their [Hdac’s] future plans, we decided it would make sense to formally partner with one another as a public promise of Hdac’s focus on security and a symbol of CertiK’s ability to support larger enterprise-level solutions such as Hdac’s,” CertiK’s marketing manager, Connie Ngo, said in an email.

In addition to their formalized partnership, CertiK co-founder Ronghui Gu will also be joining Hdac’s advisory board.

See also: Ford Test Driving Blockchain for Energy-Efficient Vehicles

Hdac Technology AG is headquartered in the crypto-friendly region of Zug, Switzerland and was founded by CEO of Hyundai BS&C, Dae-sun Chung. Hyundai BS&C is an independent IT and construction company that bears no legal connection with the car company Hyundai Motors.

Related: Cambodia Plots a Dollar-Free Future With Blockchain-Based Payments: White Paper

The security firm is best known for receiving “multiple millions” of dollars from Binance’s blockchain and crypto incubator wing Binance Labs in October 2018. Hdac, on the other hand, entered into a strategic partnership with blockchain startup CasperLabs to jointly research and develop consensus mechanisms and seamless integration between the HDAC and CasperLabs blockchains back in June of last year.

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Trio of Bitcoin Tokens Lures DeFi Yield Farmers to New Pastures

6 years 3 months ago

The number three decentralized finance (DeFi) application, Synthetix, is also enjoying the current boom times in bankless banking.

(Warning: This post is going to go a lot of places so buckle in.)

To recap, Synthetix is a platform for minting and exchanging synthetic tokens that mirror the price of other assets. On June 19, Synthetix joined the Ren Project and BitGo in creating a pool of bitcoin-backed tokens, for smooth liquidity between three crypto products that should be all but interchangeable. Plus, each of the DeFi platforms is promising token rewards in order to get more participation in the pool.

Related: Market Wrap: Bitcoin Tests $9K as Market Struggles With Uncertainty

This pool of sBTC, renBTC and WBTC lives on Curve, an automated market maker that has extremely low price slippage thanks in part to its specialization in stablecoins. 

Note: The three versions of BTC are distinct. WBTC is minted by BitGo, which serves as a centralized custodian; renBTC is minted with a trustless smart contract; and sBTC never touches BTC – it is synthetic, backed by an 800% collateralization of Synthetix Network Token (SNX).

The promotion will run till Sept. 28. And though it started on June 19, the hockey stick growth on Synthetix only got going on June 22.

In short, Synthetix appears to have successfully attracted the itinerant and growing horde of yield farmers, each doing their best to outrun the coming DeFi dust bowl.

Related: Some Numbers That Show Why Yield Farming COMP Is So Seductive

Read more: Some Numbers That Show Why Yield Farming COMP Is So Seductive

There are many incentives to joining the pool on Curve. Participants will split up a weekly award of 10,000 SNX and 25,000 REN, plus BAL from a liquidity pool of REN and SNX that the two teams made. Users also get promises for CRV, the forthcoming governance token from Curve.

The new interest in Synthetix has strengthened its position relative to Compound and MakerDAO, the top two DeFi protocols. Synthetix has never previously had more than $200 million in assets on the application. As of this writing, it has an all-time high of $263 million, according to DeFi Pulse.

That said, it’s unclear how much of that is due to this specific promotion. SNX is the asset one stakes to use Synthetix, and its price is at $1.88 as of this writing, up from $1.15 before the promotion began.

“I think there is a general surge in DeFi awareness and this new incentive taps into a number of aspects of it. BTC on ETH, yield farming and AMMs,” Kain Warwick, founder of Synthetix, told CoinDesk via email. “So I think they are probably somewhat related but it is always hard to pinpoint a specific reason for a sudden spike in project awareness.”

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

The promotion has also benefited Ren, whose renBTC token went live on May 22. 

“We’ve seen a large growth in volume on Ren this week,” Ren CEO Taiyang Zhang told CoinDesk in an email. “Since launch a few weeks ago we’ve had $19 million volume flow through RenVM and over $8 million locked up now. $15 million in volume is from the last week, with users mostly tokenizing BTC.” 

The promotion is not the whole story for Ren, however; DeFi is experiencing a rising tide moment. 

“Seems like COMP mining created a large demand for WBTC and renBTC is the easiest on-ramp into it via the Curve pool,” Zhang added.

Users just need to deposit any of the three Ethereum-based versions of BTC onto Curve’s BTC pool, and then account for their contribution on Synthetix. The new pool currently shows a daily USD volume of $774,577 or 83.18 BTC.

“This pool does a great deal of stabilizing sBTC price which is very valuable for Synthetix, as well as makes it possible to enter the Synthetix ecosystem right from Bitcoin – very valuable for both REN and Synthetix,” Michael Egorov of Swiss Stake, the company behind Curve, explained to CoinDesk in an email.

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Sovrin Foundation Sheds All Paid Staff in Tale of a Token Issuance Gone Wrong

6 years 3 months ago

The COVID-19 crisis may have been the last straw for a non-profit digital identity organization, breaking its efforts to raise funds to pay staff and carry out a regulated token issuance.

The Sovrin Foundation, a U.S.-based umbrella organization that oversees the development of blockchain-based digital identity standards (also known as self-sovereign identity or SSI), laid off nine full-time and six part-time employees in March, officially becoming a volunteer-run operation.

“Sovrin’s transition from a permanently staffed organization to a volunteer-led one is now complete,” Paul Knowles, Sovrin’s external press representative, said in a statement emailed to CoinDesk. “We are pleased to state that the Sovrin MainNet remained stable throughout the process with new stewards and clients continuing to come on board. The internal structure of the Foundation has gone through a revamp and is now more dynamic than ever before.”

Related: Telegram Agrees to Pay $18.5M Penalty in SEC Settlement Over Failed TON Offering

Read more: Why Project Indy is Using Hybrid DLT to Rethink Digital Identity

Nathan George, the firm’s former chief technology officer, said the Sovrin community – which is closely linked to SSI tech provider Evernym – reacted quickly and volunteers stepped up, calling the downsizing a “success story” of sorts. The Sovrin Foundation works with the likes of IBM, Cisco, T-Mobile and many other companies.

“Everybody went through kind of crazy mode with COVID. We were in the middle of fundraising which was going to keep us going through 2020. That fell apart faster than you could blink,” said George, who now works with Kiva, the microfinance and digital identity partner of the Libra Association. 

“So we went from being super excited, everything was going great, to having a meeting where the CEO said she was resigning and we were all let go the next day. It was a chaotic couple of weeks,” George said. 

Sovrin debt

Related: New York US Attorney Geoffrey Berman Steps Down, President Trump Nominates SEC Chair Jay Clayton to Post [Updated]

There appears to be some difference of opinion about Sovrin’s fundraising process, which pre-dates the COVID-19 financial meltdown, particularly around procuring the funds needed to conduct a regulated token sale, known in U.S. Securities and Exchange Commission (SEC) parlance as a Regulation A+ (Reg A+), an amendment to the JOBS Act which came into effect in 2015.

This became a bone of contention between the Sovrin Foundation’s trustees and board, and its CEO and executive director, Heather Dahl, who resigned on March 15.

CoinDesk obtained a copy of Dahl’s resignation letter, which states: “I have made the choice to resign based on a philosophical division between myself, the Board and its business partners.” 

The letter goes on to say: 

“When we cater to the needs of the few, we do not serve the many. While there are many paths to a destination … it is with great disappointment that the ones that I have chosen and brought to the Foundation no longer align with those chosen by the Board of Directors and other interested parties.”

The Sovrin Foundation mentioned the state of the funding for the proposed token issuance back in March. Launching a token under Reg A+ would require $1 million to $2 million in additional funding in order to file with the SEC, and a further $1 million to $2 million to complete the registration, according to the Sovrin Foundation update. 

“Given the current market conditions, we do not anticipate a Reg A+ filing for the Sovrin token in 2020,” said the statement.

But a source at the Sovrin Foundation, who wished to remain anonymous, said that when this decision was taken, COVID-19 was a minor and limited factor. The problem stretches back over two years, said the source, when Evernym sold pre-functioning Sovrin tokens to investors. 

Funding shortfall

Despite the Sovrin Foundation forming a number of alliances to facilitate additional revenue, there remained a shortfall in the funds needed for issuing a regulated token. But in October 2019, an investor with $5 million was brought to the table, according to the person speaking on the condition of anonymity.

“The Sovrin Board and Evernym then negotiated back and forth on this investment for four months while the Foundation’s finances were running out,” said the source. “The Foundation opened a Sovrin Series A raise mid-February which was already too late.”

Read more: Bank-Backed Hyperledger Is Slowly Opening to ICOs

As the financial situation became more abject, the multi-million dollar investor changed their initial terms to further dilute Evernym investors, the source said, adding that these terms were deemed unacceptable by Sovrin’s board of trustees.

“Given the climate for non-profit donations was turning grim, and the investor terms were not as good as what was offered in October, the decision was made to release the staff and move to volunteer mode,” said the source.  

“If the Foundation had not focused on protecting Evernym investors from dilution they could be in a very different financial position today,” the source added.

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Market Wrap: Bitcoin Tests $9K as Market Struggles With Uncertainty

6 years 3 months ago

Higher-than-normal selling volume pushed bitcoin down in early trading Thursday before managing to recover. 

Bitcoin (BTC) was trading around $9,297 as of 20:00 UTC (4 p.m. ET), slipping just 0.18% over the previous 24 hours. 

At 00:00 UTC on Thursday (8:00 p.m. Wednesday ET), bitcoin was changing hands around $9,270 on spot exchanges such as Coinbase. Three hours later, heavy selling volume sent bitcoin down 3% to as low as $8,980. Bitcoin’s price is below its 50-day moving average, but above the 10-day. Such a combination is a sideways bearish signal for market technicians. 

Related: Summer 2020 Is Funding Season for Open-Source Bitcoin Development

Read More: Bitcoin Still on Track for Quarterly Gains After Drop Toward $9K

“We’re still in a tight trading range; $9,000 is the key to hold,” said Rupert Douglas, heading of institutional sales for crypto asset brokerage Koine. Bitcoin’s dip to below $9,000 is the first time that threshold was crossed since June 15. When it happened 10 days ago, just as on Thursday, the world’s largest cryptocurrency by market capitalization was able to bounce right back.

“The market seems to be taking a bit of a breather after testing $9,000 last night and bouncing pretty nicely,” said Dave Vizsolyi, head trader at Chicago-based crypto firm DV Chain. A massive amount of bitcoin options, to the tune of $1 billion, has traders thinking more volatility might be ahead. “I think the options and futures expiry tomorrow will continue to drive flows,” Vizsolyi added. 

Read More: Bitcoin Options Market Faces Record $1 Billion Expiry on Friday

Related: Some Numbers That Show Why Yield Farming COMP Is So Seductive

George Clayton, managing partner of New York-based Cryptanalysis Capital, says he is concerned with economic data for the balance of 2020. Cryptocurrencies are not immune to traditional market gyrations. 

“Crypto is currently acting like a risk-on asset and the technicals look sketchy,” Clayton said. “I see both of these elements as short-term bearish.” He pointed to the Atlanta Federal Reserve GDPNow forecasting a second-quarter U.S. economic contraction of an astounding 46.6% compared to the previous year. GDPNow’s estimate of GDP performance is based on its available data. It’s a significantly more bearish outlook than what most analysts are expecting. 

“I’m quite bullish on bitcoin by this time next year,” said Neil Van Huis, of crypto liquidity provider Blockfills. “However, there could be a lot of whiplash in between. I guess that is the beauty of the markets.”

Although bitcoin is up over 28% this year, it hasn’t exactly been a smooth ride in 2020. 

Despite being down as much as 32% on spot exchanges in March during the coronavirus-induced crash, June has had steadier bitcoin price movement. “I think there really is no real directionality in bitcoin at the moment,” said options trader Vishal Shah. “It seems $9,250-$9,300 has been a broader level of support, while $10,000 has been the top, with a few scattered breaches.” Most of crypto is “actually more fascinated with DeFi at the moment,” added Shah.

Other markets

Ether (ETH), the second-largest cryptocurrency by market capitalization, was flat Thursday, trading around $233 and slipping 0.11% in 24 hours as of 20:00 UTC (4:00 p.m. ET). 

The total value locked in decentralized finance, or DeFi, surpassed $1.5 billion on June 21. The total amount of crypto assets in dollar value is now at $1.6 billion, fueled by the speculative interest in lender Compound, which now dominates the DeFi world with a 37% market share, according to data aggregation site DeFi Pulse.

Read More: DeFi Startups on Compound Weigh What to Do With $200 COMP Tokens

Digital assets on CoinDesk’s big board are mostly red Thursday. Big losers on the day include decred (DCR) dumping 2.2%, stellar (XLM) in the red 1.7% and neo (NEO) down 1.6%. One notable winner is zcash (ZEC) in the green 2.1%. All price changes were as of 20:00 UTC (4:00 p.m. ET).

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

In commodities, oil is up 2.5% Wednesday. A barrel of crude was priced at $38.98 as of press time. 

Gold is flat; the yellow metal climbed 0.19%, trading around $1,764 for the day. 

The Nikkei 225 index of companies in Japan ended the day 1.22% lower. While tech stocks made some gains, the index was dragged lower on selling in the manufacturing sector.  

Europe’s FTSE 100 index was in the green, climbing 0.63%. Fears of a coronavirus resurgence sent stocks there lower in early trading, but late gains pushed the index higher. 

The U.S. S&P 500 index gained 1%. A slight rally in late-day trading occurred due to optimism on the U.S. Federal Reserve releasing positive banking stress test results.

U.S. Treasury bonds all slipped on Thursday. Yields, which move in the opposite direction as price, were down most on the two-year bond, in the red 11%.

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Consumer Watchdog Moves to Block Canadian Bitcoin Miner From US Power Grid

6 years 3 months ago

Consumer advocacy group Public Citizen is trying to stop Canadian firm DMG Blockchain from plugging its bitcoin mining rigs into the American power grid.

In a letter published Thursday, the nonprofit implored the U.S. Department of Energy (DOE) to scrutinize, if not outright reject, DMG Blockchain’s bid to export U.S. electricity to Canada and moved to intervene. The group’s Energy Program Director Tyson Slocum and Climate Program Director David Arkush co-wrote the letter.

DMG Blockchain has been aggressively expanding its cryptocurrency mining capacity in recent months. On May 27, the data center operator tripled its fleet of ASIC miners by adding 1,000 M30s. Two days later, it applied for permission to export U.S. electricity, writing that its 15 megawatt mining operation will grow to 60 megawatts in the next year.

Related: Bitmain Co-Founder Offers Share Buyback at $4B Valuation to End Power Struggle

“The DMG application is unique in that it represents a maiden effort by an energy-hungry cryptocurrency-mining industry to import electricity from the United States to Canada to meet its significant power demands,” Slocum and Arkush said.

Read more: US Watchdog Groups Call for Congress to Put a Freeze on Facebook’s Libra

Slocum and Arkush said power utilities in Washington state have banned crypto miners for putting too much load on the grid. Washington butts up against DMG’s home territory of British Columbia, and both locations are attractive to crypto miners because of ample hydropower.

They also suggested DMG’s application may skirt federal laws prohibiting electricity exports that undermine or impair the U.S. power supply. For this, they cited crypto mining’s “staggering” energy waste, its upward impact on energy prices, the possibility that it could interfere with local attempts to introduce renewable power sources and climate change.

Related: Bitcoin Miner Maker Ebang Estimates $2.5M Loss for Q1 in IPO Prospectus Update

“U.S. cryptocurrency miners are struggling to meet their own power demands,” they said.

They warned DOE an approval could trigger a “rush” in foreign cryptocurrency miners looking to export U.S. electricity.

But Canadian crypto miners are already buying U.S. electricity though third-party power brokers, according to DMG Blockchain COO Sheldon Bennett. He said his 33-acre blended data center – it runs bitcoin rigs alongside traditional servers – will do the same if DMG’s export application is not ultimately approved.

Bennett said Public Citizen’s letter demonizes cryptocurrency mining without paying much attention to the far-heavier electrical load of other transaction-focused firms, like PayPal.

Additionally, he argued that the watchdog was ignoring the fact that the Pacific Northwest’s dams produce more electricity than locals can conceivably use. That glut’s only grown larger during COVID-19.

“We are like little droplets in the ocean compared to the amount of electricity that’s out there,” he said.

UPDATE (20:30 6/25/2020): This article has been updated to include comment from DMG Blockchain.

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Summer 2020 Is Funding Season for Open-Source Bitcoin Development

6 years 3 months ago

Nearly half a dozen companies have announced new grants for open-source bitcoin contributors and projects since the coronavirus crisis began, from exchanges such as Kraken and OKCoin to the Human Rights Foundation. Grants are generally around $150,000 each.

Now Wasabi Wallet-maker zkSNACKs Ltd announced on Thursday it is joining the cohort by donating 1 bitcoin to the HRF’s Bitcoin Development Fund. 

The privacy startup released a statement, saying, “We understand the concern for privacy in Bitcoin’s blockchain and how it can be used to surveil and oppress.” As such, the startup is keen to see this bitcoin used to fund privacy tech development.

Related: Market Wrap: Bitcoin Tests $9K as Market Struggles With Uncertainty

“Hopefully, HRF’s fund can inspire other organizations in the non-profit and academic space to support Bitcoin research and software development,” HRF executive Alex Gladstein said in a press statement. 

Read more: Human Rights Foundation Funds Bitcoin Privacy Tools Despite ‘Coin Mixing’ Legal Stigma

Meanwhile, Jack Dorsey’s Square Crypto published an open call for designer grants – an anomaly among developer-focused grant programs. 

Although the team did not respond to requests for comment by press time, Square Crypto’s blog post said multiple grants will go to those who “contribute to a bitcoin design guide, an open-source project intended to simplify designing for bitcoin applications,” among other projects. 

Related: Bitcoin Still on Track for Quarterly Gains After Drop Toward $9K

The skunkworks unit within the publicly traded payments firm followed up with a teaser tweet on Thursday, saying: “We’ll announce more grants in the next month than we have in the last year.”

Square Crypto granted $100,000 to BTCPay Server last fall.

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Kadena Launches Blockchain App to Verify COVID-19 Tests

6 years 3 months ago

Kadena said Thursday its new app can verify COVID-19 tests are the real deal by letting users track test kits.

The Brooklyn, N.Y., blockchain company said the open-source application would be available to use on its testnet immediately, and would provide a secure way for medical professionals and patients to communicate and store test results. 

Helmed by former JPMorgan blockchain leads, Kadena markets itself as a high-throughput alternative to the Bitcoin and Ethereum blockchains. Its plan to ensure the authenticity of coronavirus tests is to use QR codes to track the kits from the manufacturer to the healthcare provider, making it harder to swap out the real tests for fake ones, said Kadena founder and CEO Will Martino. 

Related: Is Scam Selling Suppressing the Price of Bitcoin?

“The provider then goes and registers those keys so that no one can just submit a random one,” Martino said. 

He added that by keeping a picture of the test’s QR code with them, anyone who gets a test could also check the results by logging onto the app.

In a press release the company said that with added privacy protections the data gathered on its app could also help academics and government officials better understand the spread of the coronavirus. 

Because it would handle protected medical information, Kadena’s platform needs to be compliant with the Health Insurance Portability and Accountability Act (HIPAA); the firm’s statement said its app was currently “aiming for the standards of HIPAA-compliance.”

Related: Bull vs. Bear: Who Has the Economy Right?

Explaining the compliance status, Martino said the firm was following a legal process to ensure compliance, but “we’re at 99.5% sure that it is” compliant. 

Token trading

Kadena also announced Thursday the Bittrex Global Exchange would be the first to list its token,  KDA. The tokens can be used to create and execute contracts on its blockchain. 

The firm said trading for its token would begin Friday morning and the initial trading pairs for KDA tokens would be bitcoin (BTC) and tether (USDT). While the listing is only for non-U.S. traders right now, Martino said the firm has plans to make the tokens available in the U.S. with listings in the future. 

“We’ll have other listings this year, but they’re the first,” he said. 

Earlier in May, the hybrid blockchain maker said it would integrate with data provider Chainlink to help price Kadena-based assets, beginning with KDA. 

According to its statement, Kadena is also moving forward with plans to upgrade its blockchain next month. The statement claimed scaling the firm’s sharded blockchain from 10 to 20 chains not only doubles the throughput, but it also proves the feasibility of Kadena’s blockchain to scale further. 

“It actually gets more efficient as you make it bigger. Because you take the difficulty per block when you go from 10 to 20, and you chop the difficulty in half. It is the network difficulty that gives us security,” Martino said. 

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DOJ Indicts Founder of Anti-Money Laundering Bitcoin Project for Money Laundering

6 years 3 months ago

The U.S. Department of Justice indicted the founder of “AML Bitcoin” on money laundering and wire fraud charges.

According to a court filing dated June 22, Texas resident Rowland Marcus Andrade, the founder of the NAC Foundation, allegedly raised funds by conducting an initial coin offering for tokens representing AML Bitcoin, telling investors that the tokens would ultimately be converted into actual AML Bitcoin.

“In [its] White Paper, the NAC Foundation claimed AML Bitcoin cryptocurrency would include features that would allow the cryptocurrency to comply with anti-money laundering (also referred to as ‘AML’) and know-your-customer (‘KYC’) regulations and laws by using ‘biometric technologies’ among other methods to confirming the identities of participants in transactions using AML Bitcoin,” the filing said.

According to a 2018 press release, NAC Foundation claimed AML Bitcoin was “the world’s only patent-pending digital currency with anti-money laundering, know-your-customer, anti-terrorism and theft-resistant properties.”

The DOJ filing was first shared by George Washington University Deputy Director on the Program on Extremism Seamus Hughes.

Andrade tried to raise up to $100 million during the ICO, which occurred in late 2017 and early 2018, the filing claimed.

According to the filing, Andrade and unnamed colleagues “made public statements and statements to potential purchasers” which “misrepresented the state of the development” of the project; created a fake “rejection campaign”; made statements which indicated the NAC Foundation was close to working with government agencies; and “misappropriated money obtained through the sale of AML Bitcoin.”

The fake rejection campaign centered around the National Football League, the filing said.

“Andrade, NAC Foundation, and his associates claimed that the advertisement would have aired during the Super Bowl if the television network airing the Super Bowl and the National Football League had not rejected the advertisement as being too controversial,” the filing alleged. “In fact, the NAC Foundation did not have the funds to purchase the advertising time, and the advertisement was never reviewed or rejected by the network or the NFL.”

According to the document, Andrade also claimed to have substantive meetings with the government of Panama and an elected official in California. The filing alleged that the Panama claims were “overstated,” and while “Andrade was present at a roundtable discussion and had his photograph taken with the [California] official,” “AML Bitcoin was not discussed.”

Close to $1 million was spent on a new home and real estate, the filing alleged.

According to a March filing, U.S. officials have also filed to seize “one parcel of real property” owned at least in part by Andrade and his wife.

This filing details how Andrade allegedly convinced an individual, dubbed “VICTIM ONE,” to invest $1 million in the AML Bitcoin project, but transferred the funds into a JP Morgan Chase account held by “J.D.,” an associate of Andrade. The funds were then allegedly transferred to a third party “who acted at the direction of Andrade” at JP Morgan; then to an account belonging to “NAC Payroll Services Inc.”; then to an account at Wells Fargo owned by Andrade; then to a personal account at Woodforest National Bank.

The March filing alleges that these funds wre then used to purchase a residence from a Texas homebuilding firm.

“To date, Andrade and the NAC have not made any meaningful progress towards developing AtenCoin, AML Bitcoin, or ABTC,” the filing said, referring to two other names affiliated with AML Bitcoin.

This case is ongoing, according to court records.

CoinDesk

Jack Dorsey Has Floated Decentralized Fact-Checking at Twitter. Here’s What That Could Look Like

6 years 3 months ago

Jack Dorsey, CEO of Twitter, recently re-tweeted a call for fact checking through open source tech rather than new intermediaries, like Twitter. 

Dorsey’s message came at the end of May, after Twitter factchecked tweets by President Trump about mail in voting, leading to Trump to sign an executive order attacking Section 230 protections. Section 230 of the Communications Decency Act protects platforms from civil liability for the content on them and has enabled companies such as Facebook and Twitter to thrive.

A decentralized approach to fact-checking is likely to be popular in the blockchain community, which has long championed ideas like the “verified web.”  from 

Related: Blackballed by PayPal, Scientific-Paper Pirate Takes Bitcoin Donations

“It shouldn’t be tech companies per se getting into fact checking,” Balaji Srinivasan, an angel investor, entrepreneur and former CTO of Coinbase,  tweeted. “It should be open source technology. Free, universally available code and data for epistemology. Take a piece of text, parse it, extract assertions, compare to explicitly specified knowledge graphs and oracles.”

“Agree this should be open source and thus verifiable by everyone,” Dorsey replied. 

Facts are a whirling flashpoint on the political stage right now, and given Dorsey’s quasi-endorsement of a tech solutionism approach to fact checking, it begs the question: what would such a system look like?

Thousands of people commented on Srinivasan and Dorsey’s tweets, referring to projects they thought might serve as future models.  

Newsblocks

Related: Tearing Down Monuments Isn’t Censorship – It’s Speech

One project is called Newsblocks, based in Glasgow, Scotland, and was conceived as a way to organize data for Newslines, a sister project. Newslines creates interactive news timelines about any topic. Think of it as a kind of “Wikipedia for news.” 

Here is an example for Conor McGregor, which has almost two thousand events in it. 

Mark Devlin is the CEO of Newsblocks and has been in publishing for years. He founded Metropolis, one of Japan’s top English language magazines and Japan Today, a popular Japanese news site in English. His claim to fame: he was the first person anywhere to place reader comments directly under news stories.

Devlin realized that the news he was collecting was actually data. For example, an article about Yoko Ono holding an art exhibition today will likely mention that she was married to John Lennon, who was murdered in 1980. That’s three pieces of data that can be extracted from the article and then used in different ways. 

See also: New Twitter Investor May Remove Bitcoin Advocate Jack Dorsey as CEO

“Once news is data then the data can be used to make all kinds of new products: you can sort the data to create timelines and newsfeeds,” said Devlin. “You can compare the meta data, like the data’s sources and other factors to enable verification and fake news detection, and you can compare data with other data to do automated fact checking by comparing pieces of data.”

As an open platform everyone can use the same data, companies can create news verification systems, like credit agencies for news and could be used by social media companies, like Twitter. 

The idea of news-as-data led Devlin to blockchain technology, which can collect, verify, store, price, and distribute such data, in something like a news data marketplace.

Ideamarket

Ideamarket, a Los Angeles based startup, aims to provide more objective rankings of information, or ideas, and move beyond traditional gatekeepers like media companies. It launched it’s prototype in November of 2019, and is built on Ethereum. 

“Idea markets use investment to establish credibility for ideas and narratives without trusting a centralized third party,” said founder Mike Elias in a blog post. “Fundamentally, idea markets use price discovery to advance discovery.”

Ideamarket functions somewhat similarly to Reddit, in which people can upvote various media brands, including independent journalists. But instead of having no cost, upvotes cost money and increase in cost as vote count increases, meaning that people have to put their money where their mouth, or itchy retweeting trigger finger, is. 

The only people who pay heed are those who are open to questioning what they hear

“It makes credibility expensive, said Elias. “For media corporations, it makes it equally expensive for everybody in the same way that Bitcoin makes money equally as expensive for central banks as it is for you and me. It creates true competition for credibility and incentivizes the public to do due diligence and seek undervalued ideas.”

In addition to investing in and earning interest on the sources they trust, users could also sell the ones they don’t, and earn money off of that as well. Elias likened it to a stock market, but for ideas. 

Elias’ plan is to launch a browser extension that would include the ranking of the news source next to articles from it on social media. 

So for example, depending on how the market shakes out, CNN might sit at 10th and Brietbart at 90th. Anyone can see how much trust a publisher has earned. Such a system could rank news sources on a platform like Twitter, without a single company having control over them and having to be the dreaded “arbiter of truth”.

“Rather than say this is true or false, which doesn’t really respect the readers free will and ability to make different judgments, we’re saying the market has put this at this rank,” said Elias. “And you can interpret a low ranking as fake news or an opportunity, because it’s undervalued.”

Any time soon

All of these models are at the early-early stage. Ideamarket is in the middle of raising its first round of angel investment, and Devlin has been unable to find funding for Newsblocks despite seeing significant interest in it, which he finds disheartening. 

See also: In Trump Versus Twitter, Decentralized Tech May Win

Another obstacle may also be the frustration of people trying to create platforms for facts in the current political environment. I reached out to Andrew Lippman, Associate Director of the MIT Media Lab, and the Senior Research Scientist on a project called Defacto, for this article. Defacto is a decentralized crowdsourced news verification system.

He said he wished he could help, but the dilemma he faces is that they are preaching to the converted. This is not a new problem, said Lippman, but is intensified by the low friction and high speed of current platforms.

“We can develop all the mechanisms in the world to check facts and propagate results, but the only people who pay heed to that are those who are open to questioning what they hear,” said Lippman. “

As Jonathan Swift said 300 years ago, ‘Falsehood flies, and truth comes limping after it, so that when men come to be undeceived, it is too late; the jest is over, and the tale hath had its effect.’”

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CoinDesk

Some Numbers That Show Why Yield Farming COMP Is So Seductive

6 years 3 months ago

It’s hard to figure out what the new governance token from Compound, COMP, costs.

Not its price, but its cost: How much will a user pay to earn freshly minted COMP? This is made especially complicated because the cost isn’t what a user deposits or borrows, it is how much net interest they ultimately pay.

Insanely, right now, it is possible to earn COMP on extremely risky trades for effectively no cost, as we’ll show below. This is not a situation that is likely to end well for many.

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

Compound rewards investors with COMP both for supplying capital and borrowing. To maximize returns, most users do both. They deposit and borrow against that deposit. There are even ways to spin this into loops that eke out even more yield (at higher risks).

Read more: Compound Tops MakerDAO, Now Has the Most Value Staked in DeFi

This is how Compound has suddenly become the world’s top decentralized finance (DeFi) platform in terms of total value locked (TVL), according to DeFi Pulse. With a small supply and lots of pent-up demand, crypto users are rushing in to earn a return – one that is very strong right now, but not much more likely to last than 2017’s initial coin offering boom.

Let’s do the numbers

To estimate cost, a website called Predictions Exchange gives a reasonable idea of how much an investor will spend to earn new COMP, and it helps to show why this asset is so attractive at current prices. The Compound team confirmed to CoinDesk that the site’s estimates are accurate enough to provide useful guidelines, in a market where factors are changing all the time.

Related: Market Wrap: A Sea of Red Across Markets as Bitcoin Drops to $9.2K

COMP currently sits at $222, according to CoinGecko. The last week has seen wild swings for the new governance token, rising to $338 on June 23 and briefly dipping below $200 on Wednesday. Total value locked (TVL) has been falling in a staggered fashion since June 21, down to about $570 million as of this writing, from a high this weekend over $600 million.

Read more: A Coinbase Pro Listing and Other Eye-Opening Data Points on Compound’s Surge in Demand

Below, we game out three scenarios – from conservative to very risky – using Predictions Exchange, assuming everything stays the same for a year (which is a very bad assumption). All these scenarios will make the assumption of a modest investment of $10,000 in capital, with a COMP price of $200. 

The point of this exercise is to give some sense of what investors will pay for each newly minted COMP under different scenarios. It’s important to note that these numbers change very fast and this post is only meant to explain the current frenzy.

The safe-by-crypto-standards way

The lowest-yield stablecoin that can be supplied as collateral on Compound is USDC. It earns an APY of only 0.12% as of this writing.

The safe move here is to borrow another stablecoin, so let’s go with DAI. At a collateralization rate of 75% on Compound, this means the user could borrow 7,500 DAI. Then, there’s nothing stopping the user from turning around and depositing that DAI again, increasing their COMP earnings on the supply side.

This earns 2.29 COMP at the end of the year, or $458 at the assumed token price of $200.

Over that time, the user would pay $107.25 in interest and earn $76.50 on the two deposits, a net loss on the deposits of $30.75. So, the cost per COMP over that time would be $13.43.

If the investor sold the COMP right away, it would net $427.25.

In fact, if an investor only put the 10,000 USDC in and did nothing else, they would earn 1.06 COMP and $12 in interest, for a net of $224. 

By taking on just ever so slightly more risk, the far better move for the conservative investor is to do it with USDT. That would earn 3.21 COMP and $450 in yield on the deposit, for a net of $1,092.

The moderately risky way

This is crypto so the low-risk, low-return move above was never the one driving the action.

Just after COMP began dispensing on June 15, the optimal trade was actually on stablecoins, which meant buyers were fairly protected from swings in the underlying assets.

Users were playing with USDC and tether (USDT), two stablecoins. If someone did basically the same trade now (that is, deposit USDC, max out their borrow for USDT and then deposit it again), they’d get more COMP but it also costs more.

The trade earns 8.0 COMP in a year. The deposits earn $349.50. The loan costs $866.25, though, for a loss of $516.75.

So COMP costs $64.60 in this scenario, and if it were all sold at the end of the year for $1,600, the user would net $1,083.25.

However, yield farmers have now shifted away from trading stablecoins. We saw an unprecedented uptick on the stablecoin DEX Curve last week but there was a giant fall-off in volume there Monday, dropping from $110 million on Sunday to around $30 million.

The very risky way

Since last week, Brave’s basic attention token (BAT) and 0x’s ZRX have spiked in yields on Compound, so they earn much more COMP.

Unlike playing with stablecoins, this exposes investors to enormous underlying volatility and the free money is much too good to last.

The supply of BAT on Compound has skyrocketed. One week ago, it was $1.89 million. It has risen to $237.71 million on Thursday (dipping a little since Wednesday). That means 63.5% of BAT’s total market cap is locked into Compound as we speak, according to CoinMarketCap.

Brave, as the creator of BAT and a major holder, has confirmed to CoinDesk that it did not move its reserves into Compound in order to earn a return, as some on Crypto Twitter and elsewhere have speculated.

Meanwhile, ZRX is the next most expensive token to borrow. Its supply has also spiked on the application, going from $5.63 million a week ago to $41.38 million on Thursday (again with a dip since Wednesday). That means 17.5% of the ZRX market cap is on Compound. 

So, if an investor ran the same trade (deposit BAT, borrow ZRX at its 60% collateralization rate and then deposit what’s borrowed), the deal looks too good to be true.

First, they would earn 33.6 COMP. Note that this is the fastest strategy listed and it’s still only 0.65 COMP each week.

Then they would also earn $2,538 on the BAT deposit plus $367.20 on their ZRX deposit. Total earnings of $2,905.20, against a borrowing cost of only $978.60. Amazing! That’s a profit just on the deposits of $1,926.60.

If they sold the COMP earned, that would be $6,720. Total profit: $8,646.60.

Cost of COMP? Risk. A lot.

ZRX has been as low as $0.13 this year and as high as $0.43. BAT has had similar swings, as low as $0.11 and as high as $0.31. All it takes for these coins is to move against each other for a user’s collateral to get slashed by liquidators and make the price of running this trade very uncomfortable.

Robert Leshner, Compound founder, offered a note of caution on Twitter, writing:

There’s already one proposal to further lower the amount of augur (REP), BAT and ZRX that can be borrowed per dollar of assets, and the stakeholders in the community have entered into a broader discussion about adding more ways to tame this boom.

COMPlexity

It’s important to note that all the estimates above are just that – estimates – and probably not very reliable. This is a brand-new market evolving at the speed of crypto. If nothing else, COMP returns depend heavily on participation levels.

In fact, we ran these numbers last night and again this morning, and many of them had already shifted. There’s very little doubt that COMP earnings will change a lot over the course of a year. 

Compound Labs made a fairly simple formula for distributing COMP tokens, but in a weird way that makes it somewhat complex to estimate what users might expect each day.

Each day, the software distributes 2,880 COMP tokens to borrowers and lenders on the platform. The amount doesn’t change, so obviously the more activity there is the less each participant gets (and vice versa). 

This is further complicated by the fact that COMP yield accrues the quickest to markets that have the most demand and this can change on a dime.

As long as there is a large gap between the price of COMP and what it costs to earn it, yield farming will persist, but as there is more liquid COMP, more of it will move onto exchanges. (Coinbase promptly listed COMP last week for its Pro traders; Binance followed suit Thursday.)

As the supply grows people will sell. This is likely to bring the price down into equilibrium with the actual market demand for borrowing crypto for uses besides yield farming. 

The question is how many retail investors will get caught up in the frenzy and lose their savings before that happens.

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Crypto.com’s Card Issuer Wirecard Files for Insolvency

6 years 3 months ago

In the wake of a $2.1 billion accounting scandal, Wirecard, whose business lines include issuing cryptocurrency payments cards for TenX and Crypto.com, has collapsed into insolvency.

In a statement Thursday, the Munich-based card issuer said it had no choice other than to begin insolvency proceedings as it faced “impending insolvency and over-indebtedness.”

“The Management Board has come to the conclusion that a positive going concern forecast cannot be made in the short time available. Thus, the company’s ability to continue as a going concern is not assured,” Wirecard said.

Related: Bitcoin News Roundup for June 19, 2020

Wirecard’s share price tanked nearly 80% on the news.

This comes just over a week after Wirecard, a former German blue-chip, admitted that it could not account for over a quarter of its balance sheet, around $2.1 billion. In a bombshell statement, the company said some employees may have inflated revenue in an attempt to mislead auditors.

On Monday, CEO Markus Braun was arrested on suspicion of accounting fraud and market manipulation.

See also: Crypto.com Rolls Out Visa Card to 31 European Nations

Related: Crypto.com Tech Upgrade Paves Way for Derivatives Trading

Wirecard has long been the primary card issuer for TenX and Crypto.com. A TenX spokesperson told CoinDesk this week that customer funds, both crypto, and fiat, had not been affected by the Wirecard scandal.

“We are however monitoring the situation closely and are always evaluating the best options for our customers,” the spokesperson said.

Crypto.com has steadfastly refused to comment. “We’re still staying totally silent on this,” its spokesperson told CoinDesk.

The only public utterance has been CEO Kris Marszalek on Twitter saying user funds have not been affected by the Wirecard scandal because they’re held by a separate institution. “Wirecard does not have custody of any crypto held by Crypto.com,” he said.

Neither TenX nor Crypto.com responded immediately to requests for comment after the insolvency filing Thursday.

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CoinDesk

Blockchain Bites: Rethinking Libra, Craig Wright and Something Smells Fishy in Blockchain

6 years 3 months ago

Top financial authorities are rethinking what a “basket-backed” stablecoin means for monetary sovereignty.

The Bank for International Settlements (BIS) issued a new report claiming stablecoin initiatives like Libra haven’t driven central banks to explore CBDCs, Craig Wright is heading to trial and BTCPay received its largest donation to date. Here’s the story:

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

Related: CBDC Issuance Is ‘Not a Reaction’ to Libra, Says Central Bank Body

Rethinking Libra
The Bank for International Settlements (BIS) rejected the popular narrative that private-sector stablecoin proposals like Libra have been key in spurring the issuance of CBDCs in a new report. Instead, the BIS said central bankers have come around to CBDCs because the tech presents a convenient vehicle for shaping the future of payments. Meanwhile, the U.S. Federal Reserve issued a report showing “basket-backed” stablecoins, like Libra, could improve consumer welfare in certain economic scenarios. (The Block)

Getting Fishy?
The Norwegian Seafood Association has teamed with IBM and Atea, a technology firm focused on the internet of things (IoT), to create a blockchain-based track-and-trace system for sustainably farmed salmon in Norway. The five associated fisheries see this as a way to ensure the quality of its salmon and the national brand. Meanwhile, Braintrust launched Wednesday with a blockchain-based employment service that will cut out middlemen like ZipRecruiter and Indeed from hiring decisions. It’s a fork of the DeFi protocol Compound, backed by a $6 million seed round featuring True Ventures, Homebrew Ventures, Uprising Ventures and Galaxy Digital, among others. 

Legal Review
Craig Wright is heading to a jury trial in a case that involves billions of dollars in bitcoin. The move comes after the plaintiffs were denied a motion filed in May attempting to sanction Wright over his alleged misbehavior. While the judge was concerned by Wright’s behavior, she ruled in favor of Wright to dismiss the motion, saying the matter was best left “for a jury to make as fact finder at trial.” Elsewhere, in an early instance of Singapore authorities enforcing its updated digital currency regulations, a 23-year-old woman was charged with breaking the city-state’s ban on unlicensed bitcoin sales on Wednesday. The woman allegedly bought S$3,350 (about $2,400) in bitcoin in late February 2020 using funds the police say came from the proceeds of an online scam.

Cyber Crime?
CipherTrace found bitcoin ATMs were frequently used to send funds to “high-risk exchanges” – trading platforms the company considers to be known for facilitating criminal activity and money laundering. “The percentage of funds sent to high-risk exchanges from U.S. BATMs [bitcoin ATMs] has seen exponential growth, doubling every year since 2017,” the report reads. Meanwhile, Australians have lost more than $14 million to crypto investment scams in 2019, according to a report from the Australian Competition and Consumer Commission. (The Block)

Related: Blockchain Bites: BitLicense at 5, Lawsky’s Fallacy and Hehmeyer’s Pivot

Money Matters
Avalanche blockchain developer AVA Labs has closed a $12 million private sale of its AVAX token. The funding round was co-led by Galaxy Digital, Bitmain, Initialized Capital, NGC Ventures and Dragonfly Capital. The sale precedes a planned public offering of the Avalanche token to U.S. accredited investors and non-U.S. citizens. Separately, cryptocurrency exchange Kraken has donated $150,000 in bitcoin to BTCPay Foundation, the entity managing BTCPay, a popular open-source tool for merchants accepting bitcoin payments. This is the largest donation in BTCPay’s history, which, as a free service, relies on donations to run and to fund developers making improvements to the app. Finally, cryptocurrency exchange FTX has launched eight unique index futures and volatility markets in less than 12 months. Popular with professional algorithmic and quantitative traders, these novel indexes suffer from a lack of liquidity. 

Quick bites Market intel

Derivatives, Wrinkles
Bitcoin’s derivatives continue to grow despite light spot trading over the past two months. The cryptocurrency’s options market is on its way to a record $1 billion monthly expiry this Friday. But there’s added complexity: volumes have dropped precipitously, just as open interest has boomed. What’s going on? Options activity may have hit a high at $226 million on June 2, but activity has still gone south. Volumes came in at around $80 million June 23, down nearly 62% from its peak. Derivative trading volumes usually increase during periods of pronounced volatility, like March 12, when the bitcoin price fell by nearly 40%, daily volumes clocked a record $45 billion. A recent fall in trading volumes could, therefore, be down to the fact bitcoin has been pretty dull recently. 

Nearly Quarterly Gains
Bitcoin looks set to end its three-quarter losing run despite having dropped to $9,000 earlier on Thursday. At 03:35 UTC, the leading cryptocurrency by market cap printed a low of $9,002, extending Wednesday’s 3.5% decline, a pullback that could be associated with risk aversion in the traditional markets fueled by mounting trade tensions, renewed coronavirus fears and the International Monetary Fund’s decision to downgrade global growth forecasts. Even so, bitcoin is still up 44% from the April 1 opening price of $6,428. A quarterly gain would be confirmed if prices hold above that level through June 30. 

Podcast

Bull vs. Bear: Who Has the Economy Right?
The economy is nothing if not confounding right now. NLW breaks down what we know. Tune in

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CoinDesk

Tezos-Based DAO Goes Live With Launch of STKR Token

6 years 3 months ago

Tezos-based StakerDAO has distributed its Staker (STKR) tokens to equity investors, launching the “tokenized hedge fund.”

STKR is priced at $13.30 a pop with a market capitalization of $20 million, backed by both a seed and Series A round. Key investors include Polychain Capital and Lemniscap.

Read more: There’s Now a DAO for Deciding Which Blockchains to Stake On

Related: Polychain Capital, Square Crypto’s Steve Lee Invest in Bitcoin Broker’s $5.7M Seed Round

STKR acts as both a governance token and security, with funds garnered from the protocol distributed to token holders.

“We are recognizing the governance token as something that will become profitable for the holders. The decision-making that happens through that governance is designed to drive profits back to those token holders,” StakerDAO CEO and founder Jonas Lamis said.

StakerDAO’s first asset

StakerDAO also launched its first token, Blend (BLND), which can be found on CoinList and will generate revenue for DAO members. An Ethereum ERC-20 token, BLND tracks the performance of a basket of Proof-of-Stake (PoS) cryptocurrencies. BLND is not available for U.S. investors.

Under the hood, StakerDAO has two pieces: a Cayman Island corporation and a decentralized autonomous organization (DAO). Operating with two faces gives StakerDAO the flexibility to offer a U.S.-compliant security offering while leaning on what many see as a novel form of democratic governance with DAOs.

Related: Tezos and Algorand Latest to Integrate Tech for Anti-Money Laundering Compliance

StakerDAO itself is led by a five-man council including Polychain’s Olaf Carlson-Wee, Coinbase Custody’s Luke Youngblood, Lemniscap’s Shaishav Todi,  DTC Capital’s Spencer Noon and StakerDAO’s Lamis.

Read more: Wrapped Bitcoin Aims to Kick-Start DeFi on Tezos Blockchain

From there, StakerDAO works just like its base layer protocol, Tezos. (Lamis was previously the general manager at Tezos Capital, a delegation service for that blockchain.) Any changes to the DAO go through a multi-tiered voting process before being implemented or rejected. 

StakerDAO takes into consideration protocol proposals over a monthlong process with final results and implementations overseen by the council and StakerDAO team, Lamis said. 

StakerDAO works in a similar space as the Ethereum-centric LAO, a DAO meshed with a legal wrapper. While both lean on DAOs as a governance mechanism for capital allocation, StakerDAO’s audience resides in the “early majority” who are not ready to jump into more technical protocols but would like to hold investments in those projects, Lamis said.

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CoinDesk

Telegram Agrees to Pay $18.5M Penalty in SEC Settlement Over Failed TON Offering

6 years 3 months ago

Telegram will pay $18.5 million and notify the U.S. Securities and Exchange Commission (SEC) if it plans to issue any sort of digital currency in the next three years in a proposed settlement with the securities regulator, a court filing revealed Thursday.

The settlement, which was reached on June 11 and effectively ends a six-month court fight with the agency, also indicates the messaging platform will be responsible for a $1.22 billion disgorgement that is offset by $1.19 billion paid as “termination amounts” in investors’ purchase agreements and the amounts that some investors loaned to Telegram earlier this year. Telegram has 30 days to pay the SEC penalty and up to four years to pay back investors under the settlement.

Additionally, Telegram should notify the SEC if the company wants to issue “‘cryptocurrencies,’ ‘digital coins,’ ‘digital tokens,’ or any similar digital asset issued or transferred using distributed ledger technology” at any point over the next three years. The notification – which is not a request for an approval – should come 45 days prior to the planned issuance, the settlement reads.

Related: Kleiman Bitcoin Case Heads to Trial as Motion for Sanctions Against Craig Wright Is Denied

The settlement apparently takes into consideration Telegram’s commitment to terminate TON’s development and pay back investors.

Previously, Telegram offered its non-U.S. investors an opportunity to loan their money to the company for one year, with a pledge to pay back 110% of the amount invested next April. This was as an alternative to getting back 72% of the investment this May – the amount previously agreed upon by the investors. Not everyone was happy with the deal, with some investors saying they considered suing Telegram.

$1.7B token offering

The SEC sued Telegram in October 2019 after the company raised $1.7 billion to fund the development of its TON blockchain project. A federal court sided with the SEC when the agency asked to block Telegram from issuing any tokens as it had planned to do earlier this year. While Telegram appealed initially, it later halted this effort.

The company announced it would be ceasing work on TON on May 27, though it published some code for the project.

Related: New York US Attorney Geoffrey Berman Steps Down, President Trump Nominates SEC Chair Jay Clayton to Post [Updated]

After adding “some almost-finished components of TON Storage, TON Payments and CPS Fift from testing branches into the main branch,” “the original TON development team is discontinuing its active involvement with the TON project,” the update said.

While Telegram ostensibly no longer plans to update its code for TON, it did write that “some minor bug fixes and Github issue answers may occasionally appear if any of the members of the original team have the spare time and inclination to contribute to the community’s efforts.”

Telegram managed to release most of the TON code, including blockchain nodes, a technical paper on TON’s consensus protocol and a native crypto wallet. While Telegram itself claimed it would no longer launch TON, another entity, TON Labs, launched its own version of the network with a group of professional validators.

The SEC declined to comment on the proposed settlement, but said in a letter to the court that the proposed settlement “is fair and reasonable and in the public interest.” Telegram did not immediately return a request for comment.

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CoinDesk

Base Layer Wars Heat Up With Another $12M Committed to AVA Labs’ Avalanche Blockchain

6 years 3 months ago

Avalanche blockchain developer AVA Labs has closed a $12 million private sale of its AVAX token. The funding round was co-led by Galaxy Digital, Bitmain, Initialized Capital, NGC Ventures and Dragonfly Capital, and included other undisclosed individual investors.

The sale precedes a planned public offering of the Avalanche token to U.S. accredited investors and non-U.S. citizens, according to a release from AVA Labs. The public sale will run for two weeks beginning July 8 with even million tokens up for grabs. Another five million will be available based on the round’s success during the first week, the firm said.

Founded by Cornell Professor Emin Gun Sirer, AVA Labs completed a $6 million Series A in February 2019 and went public with its protocol based on the Avalanche consensus algorithm in May 2019. The Series A was joined by Andreessen Horowitz (a16z), Initialized Capital and Polychain Capital, in addition to angel investments from Balaji Srinivasan and Naval Ravikant.

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Read more: Ava Labs Exits Stealth, Launches Blockchain Testnet Based on ‘Avalanche’ Protocol

Since then, AVA Labs has focused on its testnet, Denali, which the firm claims to have reached 1,000 full block-producing nodes “actively staking and participating in the consensus protocol.”

Like Ethereum, Avalanche describes itself as a blockchain for decentralized applications, particularly financial ones. The project claims its novel consensus algorithm’s transaction speeds are better suited to those applications than current blockchains.

Even with the funding, Avalanche joins a long list of projects trying to rival the second-largest blockchain by market capitalization. Other smart-contract platforms vying for Ethereum’s crown include the NEAR Protocol and Polkadot – both of which released mainnets in May – and Cardano, which has yet to deploy its Shelley upgrade.

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Read more: AVA Labs Will Splash Millions to ‘Brain Merge’ DeFi and Traditional Finance

Keeping the broader picture in mind, AVA Labs co-founder and COO Kevin Sekniqi told CoinDesk the late launch of Avalanche compared to other blockchains doesn’t really matter.

Sekniqi compared Avalanche and Ethereum to Zoom and Skype, where Zoom was able to overtake the Microsoft-owned Skype despite its 15-year technical lead.

“This is not sticky,” Sekniqi said. “Network effects of this kind are easily broken when you do offer something for developers that is objectively a better technology than what you have with Ethereum.”

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