ITIF Releases Guide to Regulating Blockchain for Policymakers

ITIF Releases Guide to Regulating Blockchain for Policymakers

ITIF asks governments to put forth more effort in supporting legitimate blockchain innovation and adoption

The Information Technology & Innovation Foundation (ITIF) released recommendations for policymakers on how to regulate blockchain technology on April 30.

Founded in 2006, ITIF is an independent nonprofit institute that provides policymakers with information, analysis and recommendations for handling new technology. In its new guide, ITIF included an array of proposals for policymakers to better regulate blockchain based on principles like technology neutrality and public-sector adoption.

The guide predicts that blockchain will likely factor into major applications such as cryptocurrencies, shared data services, smart contracts, decentralized marketplaces, authenticity tracking, and digital identity applications.  It also adds that uninformed lawmaking threatens to hamstring development.

Data-use regulations in particular can affect blockchain deployment. For instance, some of the E.U.’s provisions, the guide explains, are inconsistent with the tamper-proof nature of blockchain transactions.

As blockchains are peer-to-peer networks without intermediaries, it is difficult to edit or retroactively change data. It is possible that some users could exploit the technology to store prohibited information, but the report stresses that “current versions of public blockchains are not optimal solutions to storing or sharing illicit or pirated content.”

Generally, ITIF encourages governments to make more effort to support legitimate blockchain innovation and adoption by developing relevant regulations that do not limit blockchain-based applications out-of-hand.

Reflexive measures run the risk of cutting off blockchain development outright.  Earlier this week it came to light that the Indian government is examining a bill that would ban cryptocurrency entirely.  

Coinbase Custody Now Supports Mainnet KIN Tokens

Coinbase Custody Now Supports Mainnet KIN Tokens

Coinbase Custody announced immediate support for mainnet KIN tokens.

Coinbase Custody announced immediate support for the mainnet iteration of the KIN token today, April 30, 2019.  

As Cointelegraph previously reported, KIN is a cryptocurrency created by Canadian organization Kik Interactive of Kik Messenger fame. The token was originally developed on the Ethereum and Stellar networks and now operates on its own blockchain (a fork of Stellar).

“KIN holders can now benefit from Coinbase Custody’s industry-leading offline storage platform and insurance coverage,” they say.

Coinbase Custody is a custodial service provided by San-Francisco-based platform  Coinbase. Coinbase Custody was first announced on Nov. 16, 2017 and launched on July 2, 2018. As we previously covered, its main goal has been to provide robust security of crypto assets, which according to Coinbase has been institutional investors’ “‘number one’ concern.”

In 2019, Coinbase Custody has continued to expand its capabilities. Coinbase Custody has become directly integrated with the Coinbase over-the-counter (OTC) trading desk, with the intention of speeding up the process of a user accessing offline funds. Coinbase Custody has also begun to move into staking, which Proof-of-Stake (PoS) cryptocurrency networks use to incentivize user activity.

ConsenSys Spinoff Truffle Integrates With Goldmans Sachs-Supported Blockchain: Report

ConsenSys Spinoff Truffle Integrates With Goldmans Sachs-Supported Blockchain: Report

Truffle is integrating with AxCore as it seeks to expand into enterprise-grade solutions, according to a Forbes report.

Truffle is integrating with AxCore, a proprietary blockchain jointly created by Goldman Sachs and JPMorgan-supported Axoni, Forbes reported on April 29.

The ConsenSys spinoff, which makes tools that are widely used by Ethereum developers, has reportedly raised $3 million as it aims to expand into enterprise-grade solutions.

According to the Forbes report, Truffle plans to use the investment to complete a suite of blockchain development tools designed to appeal to enterprise clients.

An estimated 60% of Truffle’s current revenue comes from liaising with startups, larger corporations and governments that want to use its services.  The company’s executives believe the capital will enable it to explore “other revenue-generating opportunities.” Truffle’s founder and CEO, Tim Coulter, told Forbes:

“Enterprise adoption is finally happening because the maturity of our space is finally advancing to a level where enterprises can capitalize.”

Coulter added that the U.S.-based company plans to grow beyond the Ethereum ecosystem and “go where the large, important projects are.”

As reported by Cointelegraph last year, Axoni raised $32 million in a funding round led by Goldman Sachs amid plans to process transactions for the Depository Trust & Clearing Corporation’s Trade Information Warehouse by using distributed ledger technology. DTCC held an active test phase of the technology in November 2018.

Cointelegraph has contacted Truffle for comment but has yet to receive a response as of press time.

Amazon Web Services Launches Managed Blockchain Service

Amazon Web Services Launches Managed Blockchain Service

Amazon Web Services has made its Amazon Managed Blockchain generally available.

Amazon Web Services (AWS), the cloud computing platform subsidiary of retail giant Amazon, has made its Amazon Managed Blockchain (AMB) generally available, according to an announcement on April 30.

The product will purportedly allow customers to set up blockchain networks within their organizations, and uses the Ethereum and Hyperledger open source frameworks. Notably, Amazon states that AMB can scale to support thousands to millions of transactions.

Amazon states that the blockchain-as-a-service (BaaS) will allow businesses to develop their own networks more quickly and at a lower cost, as it eliminates the need to “to provision hardware, install software, create and manage certificates for access control, and configure network settings.” Rahul Pathak, General Manager, Amazon Managed Blockchain at AWS said:

“Amazon Managed Blockchain takes care of provisioning nodes, setting up the network, managing certificates and security, and scaling the network.”

According to AWS’ announcement, major firms that have implemented AMB include United States communications giant AT&T, the Nestlé global food and beverage company and Singapore Exchange Limited.

AWS initially announced AMB in November of last year along with the Amazon Quantum Ledger Database (QLDB). QLDB is a ledger database designed to provide transparent, immutable, and cryptographically verifiable log of transactions, which is overseen by a central authority.


Bitcoin Price Analysis: Short Squeeze Imminent as Bearish Pressure Weakens

Price Analysis Video.jpg


  1. Following unconfirmed claims by the NYC Attorney General regarding Bitfinex and Tether’s insolvency, the bitcoin market had a knee jerk reaction that caused us to retest macro support. However, this pullback barely made a scratch on the market structure as we didn’t manage to break our trend of higher lows.
  2. The move was swift, but after a few days of sideways consolidation, the market is now seeing a retest of macro resistance in the $5,300 level. So far, the market has yet to reclaim the broken support, but the move is still fresh
  3. If we manage to close above the $5,300 level, this would mark a very bullish feat for our market structure as we continue to test and reclaim support level after support level. If we can close a daily candle above the $5,300 level, it’s very likely we will see a continuation of the uptrend and test the $5,800s.
  4. At the moment, the short interest is very high and the market seems to be absorbing every bit of ammunition the bears throw at it. As time moves on, we are seeing a high amount of short positions stack up around the $5,300 zone. This sets up the market for a potentially violent short squeeze.

Trading and investing in digital assets like bitcoin is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice. Statements and financial information on Bitcoin Magazine and BTC Inc sites do not necessarily reflect the opinion of BTC Inc and should not be construed as an endorsement or recommendation to buy, sell or hold. Past performance is not necessarily indicative of future results.

This article originally appeared on Bitcoin Magazine.

“Holders Are Not at Risk”: Bitfinex Lawyer Responds to NY Attorney General

“Holders Are Not at Risk”: Bitfinex Lawyer Responds to NY Attorney General

bitfinex nyag

Bitfinex and Tether’s legal counsel has written a response to the New York Attorney General’s (NYAG) ex parte order, which claims that Bitifinex used Tether’s reserves to cover some $850 million in losses.

In short, the affidavit writes off the NYAG’s concerns, calling them baseless and requesting an Order to Show Cause that would require the NYAG to prove its case in court unless it vacates or modifies the ex parte order. Additionally, it requests that the Supreme Court of the State of New York stay the NYAG’s order, meaning Bitfinex would not have to comply with a May 3, 2019, deadline requiring the exchange to produce documents related to a $900 million line of credit Bitfinex established with Tether to stanch the $850 million loss.

Authored by Stuart Hoegner, who has served as Bitfinex and Tether’s legal counsel since 2016, the affidavit is scathing in its rebuke of the Attorney General’s claims. Hoegner writes that the Office of the New York Attorney General’s (OAG) “preliminary injunction serves no useful purpose” and that it “has succeeded only in spreading misinformation to the markets.”

Marked throughout with a tone of defiance, the letter asserts that “Tether holders are not at risk,” despite the NYAG’s framing of the situation in its own letter. Further, it claims that Bitfinex self-reported its troubles with Crypto Capital to the NYAG, the payment processor that allegedly led to Bitfinex’s $850 million loss of customer funds.

Hoegner admits that Tether is operating under a roughly 74 percent reserve — but also argues that this practice is not a problem.

The AG Doth Protest Too Much?

The affidavit begins in defense of Bitfinex’s relationship to Crypto Capital, whose refusal to wire funds to Bitfinex back in 2018 bottlenecked fiat withdrawals for many customers, the NYAG’s letter states.

Bitfinex had to rely on Crypto Capital’s services because it had been ostracized from proper banking relationships, Hoegner claims, citing how its complications with such banks as Wells Fargo is a perpetual thorn in the industry’s side.

According to the letter, Bitfinex, among other exchanges (like QuadrigaCX in Canada) that used Crypto Capital for makeshift banking, began experiencing withdrawal problems in 2018. This was on account of Crypto Capital having a substantial amount of its funds seized, the document states, affirming that “at least one governmental entity has confirmed that it was involved in the seizure of Crypto Capital funds.”

What’s more, the document alleges that “Bitfinex proactively and voluntarily informed the Office of the New York Attorney General (‘OAG’), as well as various U.S. federal law enforcement agencies of its issues and concomitant concerns with Crypto Capital.”

The letter continues, “On information and belief, those federal agencies have since been investigating Crypto Capital on a non-public basis at the time of OAG’s application and press release regarding this matter.”

Hoegner continues to make the case that Bitfinex orchestrated a “good-faith solution” when it debited $625 million from Tether’s reserves, along with establishing a $900 million line of revolving credit with the stablecoin company, to cover the losses incurred from Crypto Capital.

The counsel argues that this was done “for the protection of the virtual currency market,” and he suggests that the NYAG’s recommendation for the New York Supreme Court to enjoin Bitfinex from drawing on this line of credit would harm the market’s participants.

“OAG purports to wonder what ‘benefit[s] would accrue to Tether, or holders of tethers, from this transaction,’ the obvious answer is that Tether, and holders of tether, have a keen interest in ensuring that one of the dominant trading platforms of tethers has sufficient liquidity for normal operations.”

Biftinex’s upper echelon began orchestrating the deal in December of 2018, and according to the document, Bitfinex alerted the NYAG to the deal “one month before it was closed, providing OAG a general overview of [it].” The NYAG makes mention of this in its own letter, but it qualifies that it wasn’t alerted of the deal’s final structure until after it was finalized and that it had changed from its first draft.

“The description of the transaction differed significantly from what OAG was told just weeks earlier in the February 21. 2019 meeting. and included new information about a previous. undisclosed transfer of $625 million from Tether’s reserves to Bitfinex,” the ex parte order reads.

Hoegner makes no reference to the $625 million Tether transferred to Bitfinex’s Bahama-based Deltec bank account; it only touches on $675 million that was transferred from Bitifinex’s Crypto Capital account to Tether’s Crypto Capital account for “the protection of Tether.”

This transaction, which the document claims took place on an “arms-length basis” was signed for both sides by the same representative counsel, Giancarlo Devasini.

Under the Tether

The letter continues to say that the deal has not interfered with Tether’s usual business dealings as the NYAG’s letter might suggest, adding that “the average daily fiat redemption has been $566,066.00, with the largest being $24.2 million.”

This is drawn from a reserve of “cash or cash equivalents (short term equivalents)” of $2.1 billion. With its market cap at $2.8 billion, that means Tether is running at a 74 percent reserve, Hoegner admits, going further to say that Bitfinex can draw on the line of credit until this percentile drops to 68.

With a deposit-to-reserve ratio of 3 to 4, Bitfinex is doing leagues better than banks that are legally obligated to only hold fractions of reserves at or lower than 10 percent, the document points out. That Tether is operating with fractions in its reserves has also been well covered by industry media, Hoegner argues, when Tether made changes to its website’s policies.

“Market participants appear to understand that tether is not at risk,” Hoegner concludes. Turning the tables, the lawyer argues that the NYAG’s “misleading” letter did more damage as the market shed some $10 billion in capitalization in response, and he argues that “market confidence in U.S. Dollar tether remained strong, as tether continued to trade at $0.99” — this is after USDT dipped to $0.97 following the news.

In a memorandum defending Hoegner’s stance, Zoe Phillips, an attorney for Tether, argues that the NYAG has no business meddling in Bitfinex and Tether’s affairs as long as there is responsible disclosure.

“… the Attorney General has no authority to dictate how Bitfinex and Tether do business with one another, or the amount of reserves that Tether must hold. The Martin Act is an antifraud statute enacted to ensure that there is proper disclosure about the risks associated with the sale of securities and commodities … Tether states plainly on its website that tethers are backed by reserves in various forms, specifically including ‘loans’ to ‘affiliated entities.’”

For its own part, one of the NYAG’s qualms with the line-of-credit arrangement is that Tether holders and Bitfinex users were not informed.

Still, Hoegner’s letter draws the same conclusion that the “OAG’s application contains numerous mischaracterizations and omissions that undercut its request for injunctive relief.” It gives no indication that Bitfinex will comply with the NYAG’s demand to comply with a series of requests by May 3, 2019, arguing that it would “impede the normal operations of Bitfinex’s business.”

This article originally appeared on Bitcoin Magazine.

U.S. Citizens Can Now Accept Their Federal or State Tax Refund in Bitcoin

U.S. Citizens Can Now Accept Their Federal or State Tax Refund in Bitcoin


Federal tax season just passed in the United States, but if you’re one to leave responsibility to the wayside and had to apply for an extension, that might just pay off.

It’ll give you the opportunity to become one of the inaugural users of a new joint-endeavor by crypto payment processor BitPay and tax services company Refundo. The new program called CoinRT gives Refundo users the opportunity to take their federal and state income tax refunds in bitcoin.

"We believe that as more and more people understand the benefits of Bitcoin, they’ll gravitate to it. With the option to set aside all or part of their refund in a seamless manner, it allows those on the sidelines to jump right in," Refundo CEO Roger Chinchilla told Bitcoin Magazine.

Tax filers using Refundo’s system who opt into the program will include a routing and account number linked to BitPay’s Payouts. Once the refund hits this account, BitPay converts the cash to sats and sends it to whatever wallet address the user provided upon sign-up (this sign-up, as one would expect, includes KYC).

A press release shared with Bitcoin Magazine highlights that the move is in line with Refundo’s wider focus on lower income and poorly banked populations. For this purpose, bitcoin offers a low friction refund option for those who don’t have access to reliable banking, Refundo CEO Roger Chinchilla claims.

“We’re always looking at low-cost and convenient methods to disburse our clients' refunds. As bitcoin adoption steadily grows, Refundo believes we can serve as an innovative payout process for our clients. Refundo’s focus has been on serving the underbanked, which is at the core of bitcoin’s rise, so it’s a natural fit. More than that, it gives taxpayers an incentive to save. Instead of splurging when your refund arrives (this is typically the case in low-income communities), CoinRT can act as a saving mechanism and ensure taxpayers are more fiscally responsible," he told Bitcoin Magazine.

Head of Business Solutions at BitPay Rolf Haag told us that the partnership answers “customer demand in multiple verticals for Bitcoin Payouts. It also signals that the “global marketplace” for payouts in bitcoin is growing.

"Recipients want choice, especially for high cost alternatives like bank wire receipts or pre-loaded debit cards. Recipients are tired of paying to receive, and senders want to make their recipients happier without incurring additional costs," he concluded.

At any rate, the partnership adds bulk to a growing trend of bitcoin’s burgeoning role in taxation. Canadian town Innisfil made history early this year as the first North American municipality to permit its citizens to pay local taxes in bitcoin. For Canada’s southern neighbor, Ohio opened up a bitcoin payment option to its corporations at the tail end 2018, and, in May of the same year, Seminole County Florida enabled the option for things like property tax.

This article originally appeared on Bitcoin Magazine.

Prediction: 20 Percent of Leading Global Grocers to Use Blockchain by 2025

Prediction: 20 Percent of Leading Global Grocers to Use Blockchain by 2025

According to Gartner, Inc., 20 percent of the top 10 global grocers will use blockchain technology by 2025.

20 percent of the top 10 global grocers will use blockchain by 2025, according to information released by research firm Gartner Inc on April 30.

Per Gartner, the main advantage of blockchain for grocers is that it provides a high degree of transparency.

For grocers, this means they can use blockchain as a way to convey reliable information to their customers and retailers. Gartner even claims that blockchain “appears as an ideal technology to foster transparency and visibility along the food supply chain.”

Gartner says that grocery sales are increasing globally, and that consumers now know more about a food’s source and freshness, as well as the provider’s efforts toward sustainability.

“Grocery retailers who provide visibility and can certify their products according to certain standards will win the trust and loyalty of consumers,” it says.

Gartner also points out that there is potential for internal usage by retailers, who may avail themselves of data collected on a blockchain platform to quickly determine the source of a recalled product.

Gartner’s Senior Director Analyst Joanne Joliet posits that grocers will “lead the way with the development of blockchain.”

A number of companies are already experimenting with blockchain to ensure the quality of their food products. Gartner cites Walmart, Unilever and Nestlé as among their ranks; the former is using blockchain for a “store-to-farm” tracking system, while the latter two are using the data to track food contamination.

As previously reported by Cointelegraph, Walmart, Unilever and Nestlé are all partners of IBM Food Trust, a blockchain-based food tracking network. IBM Food Trust has also partnered with Dole Food Co., Driscoll’s Inc., Golden State Foods, Kroger Co., McCormick and Co., McLane Co., Tyson Foods Inc. and Unilever NV.

New York District Attorney Charges Two for Shadow Banking Crypto Companies

New York District Attorney Charges Two for Shadow Banking Crypto Companies

The U.S. Attorney for the Southern District of New York has charged an Arizona man and Israeli woman for allegedly shadow banking cryptocurrency companies.

The Southern District of New York Attorney has charged an Arizona man and Israeli woman for allegedly shadow banking cryptocurrency companies, according to an official announcement published on April 30.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced the arrest of Reginald Fowler for allegedly operating an unlicensed money transferring business and bank fraud. His purported co-conspirator Ravid Yosef has also been charged with bank fraud and is still at large, according to the announcement.

In 2018, the accused allegedly worked for several associated companies that provided fiat currency banking services to cryptocurrency exchanges, where Fowler made numerous misleading statements to banks in a bid to open bank accounts further used to receive deposits from individuals purchasing digital currency. Fowler and Yosef purportedly falsified electronic wire payment instructions to cover up the true nature of their business.

Berman said that “their organization allegedly skirted the anti-money laundering safeguards required of licensed institutions that ensure the U.S. financial system is not used for criminal purposes, and did so through lies and deceit.”

Earlier in April, the Manhattan district attorney Cyrus R. Vance, Jr. indicted a group of individuals with allegedly operated stores on the dark web that sold and shipped “hundreds of thousands” of tablets of counterfeit drugs and laundered millions of dollars with bitcoin (BTC). The individuals reportedly withdrew more than $1 million.

Also in April, Cointelegraph reported that LocalBitcoins trader Jacob Burrell Campos, who sold bitcoin to more than 1,000 people in the U.S., will serve two years in federal jail. Burrell, a Mexican citizen, amassed more than $820,000 from bitcoin sales on the P2P platform between 2015 and 2018.

Report: Former Barclays Exec Joins Fidelity Investments to Work on Digital Assets

Report: Former Barclays Exec Joins Fidelity Investments to Work on Digital Assets

Former executive of British investment bank Barclays, Chris Tyrer, has joined American financial services corporation Fidelity Investments.

A former executive of British investment bank Barclays, Chris Tyrer, has joined Fidelity Digital Assets, the crypto platform of American financial services corporation Fidelity Investments, Finance Magnates reported on April 30.

Tyrer began working on digital assets for Fidelity Investments after serving over 13 years at Barclays as Head of Digital Assets Project, Head of Commodities Trading, and Global Head of Crude Oil Trading, according to his LinkedIn profile.

Tyrer and commodity trader Matthieu Jobbe Duval reportedly attempted to establish a digital currency trading desk at the bank, but the project was reportedly put on hold as prices continued to fall at the end of 2018.

As reported earlier in April, Fidelity Digital Assets named former Head of Equity Electronic Sales for the Americas at Barclays Christine Sandler as Head of Sales and Marketing.

Fidelity Digital Assets went live in the beginning of March with a selected group of clients. The company’s head Tom Jessop said then that they were still working on various parts of the platform. He noted that while some users have been on the platform since January, others may wait until September, as it “really depends on the facts and circumstances of each client.”

In February, Fidelity Investments received and passed on the Lightning Torch — a community-driven experiment aimed at raising awareness about the protocol and testing its robustness — to the Harvard School Blockchain & Crypto Club. The trend first reportedly started when Twitter user and bitcoin (BTC) enthusiast Hodlonaut sent 10,000 satoshis (the smallest, indivisible denomination of a bitcoin) to another Lightning user, and the user added another 10,000 satoshis and passed it on.

Mixed Cryptocurrency Transactions Up 300% as Crypto Users Pursue Anonymity

Mixed Cryptocurrency Transactions Up 300% as Crypto Users Pursue Anonymity

“CoinJoins,” where crypto transactions are mixed to deliver anonymity to senders, have risen by 300% in the past nine months, data shows.

Mixed cryptocurrency transactions now represent 4.09% of all bitcoin (BTC) payments, according to data published by Longhash on April 29.

So-called “CoinJoins” have risen by 300% in the space of nine months. By blending multiple transactions together before they are sent to the recipient, the technique is regarded as a way of obscuring the sender’s details.

The data was provided by Adam Fiscor, the CTO of the company that runs Wasabi Wallet, a product that aims to deliver greater levels of anonymity to bitcoin users. It shows that CoinJoin transactions have reached their highest level since 2013-14.

CoinJoins have become more popular as governments around the world begin to step up their monitoring of transactions on blockchain, with law enforcement agencies often using specialist companies such as Chainalysis to pursue hackers and criminals dealing in crypto.

Although privacy coins have been touted as an alternative to BTC, they are experiencing pushback in some countries. Officials in France have suggested they should be banned altogether, while China recently enforced new anti-anonymity regulations that are purportedly designed to contribute to the industry’s healthy development.

Research: Crypto Mining Hardware Market to See 10% Compound Annual Growth by 2023

Research: Crypto Mining Hardware Market to See 10% Compound Annual Growth by 2023

Digital currency mining hardware market is set to expand by 2023, according to a report from market research firm Reportlinker.

Digital currency mining hardware market is set to expand by 2023, according to a report from market research firm Reportlinker published on April 29.

Per the analysis, the rising number of product launches will facilitate the growth of cryptocurrency mining hardware, that will purportedly register a compound annual growth rate (CAGR) of more than 10% by 2023.

The report suggests that one of the major drivers of the cryptocurrency mining hardware market growth worldwide is the increasing demand for cryptocurrency-specific hardware, such as field-programmable gate array (FPGA) processors and application-specific integrated circuits (ASICs).

The high operational cost that results in low-profit margins reportedly remains one of the challenges to growth of the global digital currency mining hardware market, while the increasing number of crypto-related startups that cease their operations will also affect the growth of the market.

Low prices during the crypto bear market in 2018 affected crypto miners and hardware producers alike. In its Q3 2018 earnings report, computer hardware manufacturer Nvidia announced it was experiencing a “crypto hangover” as a result of inventory excess that was the result of decreased demand for its graphics processing units from crypto miners.

In February, cryptocurrency mining service Coinhive announced its closure, as the project had reportedly become economically inviable. Coinhive reportedly had to shut down its services amidst a 50 percent decline in hash rate following the last Monero hard fork. The firm said its would halt operations on March 8, 2019, while users’ dashboards will be accessible until April 30, 2019.

Crypto Markets Recover With Bitcoin Breaking $5,300, Gold and Oil Prices Rise

Crypto Markets Recover With Bitcoin Breaking $5,300, Gold and Oil Prices Rise

All but one top 20 coins by market cap are in green, with litecoin seeing the biggest gains of around 7%.

Tuesday, April 30 — following another decline yesterday, crypto markets again reversed to gain momentum upwards, with all but one top 20 coins by market cap in the green.

Having skyrocketed more than 18% yesterday, IOTA (MIOTA) is the only coin among the top 20 that sees losses, down around 4.3%. In contrast, litecoin (LTC) is seeing the biggest gains over the past 24 hours, up 7.17% at press time.

Market visualization from Coin360

Market visualization from Coin360

Bitcoin (BTC) has broken back above $5,300 today, hitting an intraday high of $5,353. At press time, bitcoin is up 1.55% over the past 24 hours to trading at $5,321. Similarly to all the top 20 cryptos, Bitcoin is still down almost 5% over the past week.

Bitcoin 7-day price chart. Source: CoinMarketCap

Bitcoin 7-day price chart. Source: CoinMarketCap

Ether (ETH), the second cryptocurrency by market cap, is up 2.3% to $159.21 at press time. Still, the top altcoin is seeing about a 8.36% drop over the past 7 days. Yesterday, tech entrepreneur and Tesla CEO Elon Musk entered a twitter conversation with ether co-founder Vitalik Buterin with a one-word tweet “Ethereum.”

Ethereum 7-day price chart. Source: CoinMarketCap

Ethereum 7-day price chart. Source: CoinMarketCap

Ripple (XRP), the third top cryptocurrency by market cap, is up 5.1% over the past 24 hours to $0.309 at press time, while the coin is still down 4.66% over the past 7 days. Recently, the world’s largest stock exchange, Nasdaq listed XRP Liquid Index (XRRLX) on its global data service.

Ripple 7-day price chart. Source: CoinMarketCap

Ripple 7-day price chart. Source: CoinMarketCap

Total market capitalization amounts to $173 billion, up from $169 billion at the beginning of the day.

Total market capitalization 7-day chart. Source: CoinMarketCap

Total market capitalization 7-day chart. Source: CoinMarketCap

Recently, Fundstrat Global Advisors founder Tom Lee made another bull prediction, claiming that crypto prices will hit new all-time highs by 2020.

Earlier today, Cointelegraph reported that blockchain-focused precious metals firm Tradewind hired ex-JPMorgan Chase executive as its new CEO. Also today, American crypto exchange ErisX announced the public launch of its spot market.

After hitting all-time highs yesterday, the United States stock market dropped today as Google’s parent company Alphabet had a bad impact on communication service sector, CNBC reports. At press time, the Nasdaq (NASDAQ) Composite is down 0.9%, while the S&P 500 (SPX) and the Dow Jones Industrial Average (DJIA) are up about 0.1%.

Oil prices rose amid Venezuela’s opposition leader urging the military to back him to topple Nicolas Maduro after Saudi Arabia claimed that their partnership to hold output could be expanded till the end of 2019. As such, West Texas Intermediate (WTI) crude oil and Brent crude are up 0.6% and 0.9%, respectively.

Gold prices also rose today as global economy concerns subsided after disappointing Chinese factory activity data. At press time, spot gold is up 0.3% to $1,283 per ounce, while U.S. gold futures gained 0.29% to $1,285.

BitPay Partners With Refundo to Enable Taxpayers to Receive Refunds in Bitcoin

BitPay Partners With Refundo to Enable Taxpayers to Receive Refunds in Bitcoin

Crypto payment services firm BitPay has partnered with tax-related financial products company Refundo to enable people to get a portion of their tax refund back in bitcoin.

Cryptocurrency payment services firm BitPay has partnered with tax-related financial products company Refundo to enable people to get a portion of their tax refund back in bitcoin (BTC). The development was announced in a press release shared with Cointelegraph on April 30.

Refundo’s new product dubbed CoinRT allows taxpayers to receive all or a portion of the federal and state tax refunds in BTC through BitPay’s Payouts, purportedly ensuring low transaction fees, speed, and serving the underbanked.

To start using the platform, taxpayers need to create an account, provide a bitcoin wallet address, and receive a unique routing and account number to input on their tax return. Customers then have to pass a Know Your Customer procedure, and once the Internal Revenue Service (IRS) or state deposit the refund, BitPay processes the payment and transfers it to the taxpayer’s crypto wallet.

Leading financial industry players have been steadily embracing the tax issue when dealing with cryptocurrencies. Last month, Big Four auditing and professional services firm Ernst & Young launched a tool for accounting and preparing taxes on cryptocurrency holdings. The product can reportedly get information about crypto transactions from “virtually all” major exchanges, consolidate data from various sources, and automatically produce reports, including cryptocurrency-related IRS tax returns.

In February, United States tax preparation software TurboTax Online partnered with CoinsTax, LLC to add cryptocurrency tax calculation to its services. The service will allow users to import trading data directly from major exchanges. Once calculated, capital gains and income reports can be downloaded or uploaded directly into Form 1040 Schedule D.

On April 11, 21 different U.S. federal representatives sent a bipartisan letter to the IRS requesting guidance on how to report virtual currency taxes. The action took place before the filing deadline for federal income tax returns on April 15, 2019. Specifically, the letter asked the IRS to specify acceptable methods for calculating the virtual currencies’ cost basis, cost basis assignment and lot relief, as well as tax treatment of crypto hard forks, citing bitcoin’s fork bitcoin cash (BCH) that took place in August 2017.

UK Watchdog Allows Three Blockchain Firms to Join Regulatory Sandbox

UK Watchdog Allows Three Blockchain Firms to Join Regulatory Sandbox

Three blockchain-focused firms are among the latest 29 companies accepted into the U.K. financial watchdog’s regulatory sandbox.

The United Kingdom’s Financial Conduct Authority (FCA) has allowed three blockchain-based businesses to join the latest cohort of its regulatory sandbox, the organization announced on April 29.

Diro Labs is one of the blockchain-driven companies accepted by the FCA for performing tests on a “short-term and small-scale basis.” According to the regulator, the startup uses a “central blockchain-based store of information” to verify identities and documents online from original sources.

Meanwhile, Fintech Delivery Panel Partners has been given permission to test a “decentralized digital identity platform using machine learning identity verification and blockchain-based key management.”

Finally, e-commerce payments and verified digital identity platform Nuggets intends to test the “storage of personal and payment data securely with blockchain, and the use of this data to access financial services products.”

The regulator said it received a record number of 99 applications to join the fifth cohort of its sandbox from firms operating both in the U.K. and overseas. It explained:

“Examples of propositions that have been accepted include digital identity solutions, platforms which tokenize issuance of financial instruments, and services aimed at facilitating greater access to financial services for vulnerable consumers.”

According to the FCA, regulatory sandboxes enable companies “to test innovative propositions in the market with real consumers.”

Such schemes have become popular with regulators around the world, with the Reserve Bank of India recently announcing it will also allow blockchain innovations to be tested in this way.

Stablecoins, Explained

Stablecoins, Explained

Volatility in crypto prices have been regarded as a big hurdle for mainstream adoption. Stablecoins could be a way of eliminating such erratic fluctuations.

Can stablecoins achieve true decentralization?

Certain providers believe they have struck a compromise.

Some stablecoin advocates are concerned that pegging a cryptocurrency directly to the U.S. dollar means that it must inevitably have ties to the U.S. banking system. This means that they have to rely on a centralized infrastructure — something Satoshi Nakamoto wanted to avoid when he set out his vision more than a decade ago.

Equilibrium says it has managed to address this pitfall by ensuring that its stablecoin, EOSDT, is overcollateralized above 170 percent. This is achieved by ensuring that one unit of EOSDT is equal to $1. The company says its framework delivers “the world’s first decentralized collateral-backed stablecoin built on the EOS blockchain” and addresses concerns surrounding safety and scalability.

At present, only EOS can be used as collateral, but the platform hopes to evolve into a cross-chain solution and accept a basket of multiple cryptocurrencies as collateral in time.

With new stablecoins launching all the time, and trading volumes on the rise, this is a segment of the crypto industry that could grow further in the coming years. Undoubtedly, new use cases will emerge along the way — potentially offering a temptation to consumers who have been reluctant to use virtual currencies so far.

Who else is issuing stablecoins?

Everyone — from banks to social networks — is getting in on the action.

Even though JPMorgan Chase’s CEO appeared to call bitcoin a “fraud,” the U.S. bank recently unveiled plans to launch a stablecoin to speed up settlement times when transactions are taking place internationally.

Although some crypto commentators regarded the financial giant’s step as a ringing endorsement of stablecoins’ potential, others — such as the CEO of Ripple — attacked the “JPM Coin” for a lack of interoperability, which means that other banks would be unlikely to embrace the technology. Anthony Pompliano, the founder of Morgan Creek Digital Capital, went one step further — using his podcast to warn that “we should do everything in our power to prevent” JPMorgan Chase from succeeding, as it would mean trusting a Wall Street bank “that was previously charged with a felony.”

Elsewhere, IBM has launched its blockchain-powered World Wire in collaboration with Stellar (issuer of XLM) — also with the goal of building a cross-border payments network. Here, international banks can create their own stablecoins backed by their local fiat currency — and institutions from Brazil, South Korea and the Philippines have reportedly registered their interest so far.

We couldn’t wrap up without mentioning Facebook, which has reportedly hired dozens of engineers to develop a fiat-pegged stablecoin that users could rely on for paying their friends and family around the world. This could help the social network send shockwaves through the remittance industry by enabling foreign workers to transfer money with lower fees. The “Facebook Coin” could be a blessing for the embattled company as it tries to shake off privacy scandals and find sources of revenue beyond advertising. According to CNBC, one analyst believes the stablecoin could deliver an additional $19 billion in revenue by 2021, if the plans are pulled off.

Are stablecoins without controversy?

No — and this in part is because of transparency issues that have emerged.

Tether is one of the best-known stablecoins that has attracted controversy for several reasons in recent years. A study by academics claimed that the coin was used to “manipulate cryptocurrency prices” during the boom of 2017, with researchers even claiming that half of bitcoin’s price in December of that year was attributable to the stablecoin.

There have also been questions raised about whether Tether has enough dollars in reserve to collateralize all of its stablecoins — however, an unofficial audit in June 2018 appeared to confirm that its reserves were in order. Alarm bells were also ringing for some crypto enthusiasts in March 2019, when Tether appeared to dilute claims that its stablecoin was fully backed by U.S. dollars.

Other stablecoin advocates — such as Jeremy Allaire of Circle, which launched USDC back in autumn 2018 — have called for an “open standard that many companies can implement.” He added that greater levels of self-governance would give peace of mind to users, help tokenize the global economy and result in a joined-up ecosystem for the crypto industry that would pose a more compelling alternative to fiat.

Other critics argue that the existence of stablecoins have the potential to undermine normal cryptocurrencies, which have been working hard to develop their own economy and accrue value for many years. And, although they are meant to act as a safe haven for crypto consumers, the fact that pegged stablecoins will offer little to no financial gain is likely to be regarded as a major downside by some.

Why have they become so popular?

Because they eliminate uncertainty for consumers — especially around conversions.

They offer the type of predictability that many countries struggle to achieve with their national currencies — hence why Venezuela, battling hyperinflation and political instability, decided to launch its own cryptocurrency.

Stablecoins give owners a safe place to store their assets whenever there are choppy waters in the crypto world. Consumers can quickly and easily convert from unpegged cryptocurrencies to stablecoins when they are worried about where the markets are heading next, eliminating the need to return to a fiat currency. These conversions can also be less expensive than when switching between crypto and fiat, as it takes the transaction fees of payment processing providers and banks out of the equation.

At the start of April, tether achieved an all-time high of daily transactions — and according to CoinMarketCap, the stablecoin is even nipping at the heels of bitcoin, with reported trading volumes of $9.4 billion compared to BTC’s $10.2 billion.

Part of the stablecoin’s burgeoning popularity may also be down to how crypto exchanges, the main point of access for many consumers, are starting to get in on the action — raising awareness. It was recently announced that OKEx, the sixth-largest exchange, was planning to launch its own stablecoin. And Binance, the world’s largest exchange, has been aggressively expanding the trading pairs it offers. In November, it rebranded its Tether (USDT) Market to the Stablecoin Market — and subsequently announced it would list a broader range of stablecoins. Explaining its rationale in a January blog post, Binance said: “In the last few months, the stablecoin space has evolved very quickly.”

So, how do they work?

As the name suggests, stablecoins are designed to have a consistent price or value over time.

There are three different ways of achieving this — delivering a happy medium between offering the stability of fiat currencies and the decentralized benefits that virtual currencies provide. Without stablecoins, taking out a loan while using crypto as collateral can be risky, as the assets used to secure your borrowing can be rendered worthless in a short space of time. Likewise, imagine what getting your salary in crypto would be like if prices were to tumble unexpectedly. In the real world, it would be like suddenly finding out that milk has ballooned in price from $1 to $3, meaning your money goes a lot less further.

The first type of stablecoin is collateralized by fiat. For every single stablecoin issued, $1 is kept safely by a central custodian such as a bank. This means that, in theory, you should be able to exchange between the two effortlessly without great expense. In other cases, commodities have been touted as a way of collateralizing crypto, with Venezuela’s government unveiling plans to launch the petro — a coin that’s value was to be tied to one barrel of oil. Alas, the petro’s launch was long delayed and, as Cointelegraph reported, it faced mixed success.

Next, you have stablecoins collateralized by crypto. “But wait!” I hear you cry. “Doesn’t this mean that price volatility is still possible?!” To an extent, yes — but some providers try to tackle this issue by “overcollateralization,” meaning $2 worth of crypto is deposited with a custodian for every $1 of a stablecoin. This can help to keep decentralization alive, with crypto reserves absorbing the impact of any fluctuations, but a downside is that huge amounts of capital can be required to get them off the ground.

Last, there are noncollateralized stablecoins, which do away with the idea of having reserves altogether. These types of assets see smart contracts take on a role not too dissimilar to a reserve bank. They monitor supply and demand — buying circulating coins when prices are too low and issuing new ones when prices are becoming too high. The ultimate goal is to keep prices in line with that of a pegged asset such as the U.S. dollar.

No matter what type of method is used, it is worth noting that stability is more of an aim than an inseparable feature.

What are stablecoins?

Stablecoins are a new type of cryptocurrency that have their value pegged to another asset.

These coins can be pegged to fiat currencies such as the United States dollar, other cryptocurrencies, precious metals or a combination of the three. Fiat seems to be the most popular option in the marketplace right now, meaning one unit of a stablecoin equals $1.

Stablecoins are designed to tackle the inherent volatility seen in cryptocurrency prices. They are normally collateralized, meaning that the total number of stablecoins in circulation is backed by assets held in reserve. Put simply, if there are 500,000 USD-pegged coins in circulation, there should be at least $500,000 sitting in a bank.

With bitcoin suffering abrupt crashes and sudden gains, advocates believe stablecoins help eliminate doubt about conversion rates — making cryptocurrencies more practical for buying goods and services.

Examples of the best-known stablecoins include tether (USDT), trueUSD (TUSD), gemini dollar (GUSD), and USD coin by Circle and Coinbase (USDC). Demand for such coins has been growing. In December, Cointelegraph reported claims that four major stablecoins had clocked up $5 billion in on-chain transactions within just three months — enjoying a 1,032% surge in November compared with two months earlier.

Fractional Reserve Stablecoin Tether Only 74% Backed by Fiat Currency, Say Lawyers

Fractional Reserve Stablecoin Tether Only 74% Backed by Fiat Currency, Say Lawyers

The news follows removal of suggestions Tether had full fiat backing, while a fresh legal case rumbles on.

The company behind USD stablecoin Tether (USDT) only has enough cash to back three-quarters of its increasing supply, its lawyers confirmed in documents released on April 30.

As part of an ongoing legal process involving the New York Attorney General, Zoe Phillips of law firm Morgan Lewis said that at the time of writing, 74% of Tether’s reserves had USD and equivalent backing.

The figure falls short of previous promises given by Tether executives, specifically that every USDT token had full fiat backing, something a bank statement appeared to confirm in December last year.

“In fact, Tether’s reserves of cash and cash equivalents alone (without the line of credit) would cover approximately 74 percent of the outstanding amount of tether,” Phillips wrote.

The legal battle stems from claims that cryptocurrency exchange Bitfinex, which shares its CEO with Tether, used reserves to plug holes left from a problematic outsourcing agreement earlier in 2018.

The claims, which both Bitfinex and Tether are in the process of refuting, mark the latest in a series of issues both companies have faced regarding the transparency of their operations.

Bitfinex, for example, has previously faced accusations it was insolvent, which it publicly denied.

While Phillips does not see problems with Tether’s current reserve ratio, her language runs in sharp contrast to a project which previously marketed itself as the antithesis of fiat-based fractional reserve banking.

“This sort of ‘fractional’ reserving arrangement is similar to how commercial banks work. No bank holds in liquid cash more than a small percentage of depositors’ money,” she continued. Phillips added:

“The funds are invested. The markets clearly remain confident in tether, as it currently trades just shy of $1 dollar per U.S. Dollar tether — even after the Attorney General’s highly inflammatory and misleading public application. Any suggestion that tether holders face liquidity risk is unsupported speculation.”

According to an affidavit seen by cryptocurrency news outlet CoinDesk, Stuart Hoegner, general counsel for Tether and Bitfinex, corroborated the 74% backing figure.

As Cointelegraph reported, Bitfinex is rumored to be mulling a so-called initial exchange offering (IEO) to raise funds.

11% of Americans Own Bitcoin, Major Awareness Increased Since 2017

11% of Americans Own Bitcoin, Major Awareness Increased Since 2017

American population has become more aware of bitcoin in terms of six key aspects, such as familiarity, conviction, and others.

11% of the American population owns the major cryptocurrency bitcoin (BTC), according to a new survey published by Spencer Bogart of venture capital firm Blockchain Capital on April 30.

Blockchain Capital partner Bogart today posted the results of a new survey conducted by Harris Poll in order to provide analytics data on bitcoin’s demographic trends.

Conducted between April 23, 2019 and April 25, 2019, the survey included answers of 2,052 American adults and represents an expanded version of the previous demographic survey released by the firm in October 2017.

According to the survey results, the American population gained more knowledge about bitcoin in terms of six key aspects: awareness, familiarity, perception, conviction, propensity to purchase and ownership. With that, the indicators have dramatically increased in many cases since October 2017 despite the bear market of 2018 and the bull market of 2017, the survey writes.

The results outlines that bitcoin is a “demographic mega-trend” led by the younger generation in the 18-34 year age range. According to the survey, awareness has become the only aspect where older demographics matched that of younger age groups. As such, the vast majority of American citizens have heard of bitcoin, regardless of age. The proportion of people who heard of bitcoin increased from 77% in October 2017 to 89% in April 2019.

Bitcoin awareness charts in fall 2017 and spring 2019: Source: Spencer Bogart’s Medium

Bitcoin awareness charts in fall 2017 and spring 2019: Source: Spencer Bogart’s Medium

In terms of the ownership aspect, 20% of American citizens aged 18–34 claimed to invest in bitcoin, while those aged 35–44 accounted for 11%. The 45-54 and 55-64 age ranges indicated an equal ownership amounting to 5%, with 2% of American retirees over 65 years claimed to hold the biggest cryptocurrency.

Bitcoin ownership charts in fall 2017 and spring 2019: Source: Spencer Bogart’s Medium

Bitcoin ownership charts in fall 2017 and spring 2019: Source: Spencer Bogart’s Medium

Earlier in April, another survey found that approximately 3% of American retirees own bitcoin.

UK Central Bank Deputy Governor Dave Ramsden: Crypto Is Not a Store of Value

UK Central Bank Deputy Governor Dave Ramsden: Crypto Is Not a Store of Value

Dave Ramsden said that crypto assets are too volatile to be a store of value.

Dave Ramsden, deputy governor of the United Kingdom’s central bank, has said that crypto assets are too volatile to be a store of value. Ramsden made his comments in an interview with CNBC published on April 30.

Bank of England (BOE) deputy governor Ramsden noted that over a year ago, the U.K.’s Financial Policy Committee (FPC) had concluded that cryptocurrencies’ volatility meant that they could not be a store of value. Furthermore, the FPC also came to the conclusion that cryptos are not a practical medium of exchange because the cost of the transactions was too high.

Ramsden told CNBC that the FPC declared that cryptocurrencies do not meet the definition of a currency, noting that because of the small size of their market, they don’t pose a threat to financial stability. In the interview, he stated that the FPC’s conclusions still stand today.

This January, another BOE employee — Huw van Steenis, senior adviser to BOE Governor Mark Carney — said that cryptocurrencies fail basic financial tests.

In contrast, in response to a BOE Twitter survey about the preferred form of currency to receive a Christmas gift last December, 70% of respondents said they would prefer digital currency.

As Cointelegraph recently reported, Corporate Traveller, the largest travel management firm in the U.K., is now accepting bitcoin (BTC) for payments.

Also this month, Cointelegraph wrote that Afghanistan and Tunisia’s central banks are looking to issue a bitcoin bond.

JPMorgan Chase Senior Executive Becomes CEO of Blockchain Precious Metals Firm

JPMorgan Chase Senior Executive Becomes CEO of Blockchain Precious Metals Firm

Michael Albanese takes over the day-to-day running of Tradewind as of Tuesday, as the company seeks expansion.

Blockchain-powered precious metals platform Tradewind has appointed an ex-JPMorgan Chase executive as its new CEO, the company confirmed in a press release on April 30.

Michael Albanese, who previously worked as the bank’s Global Head of Agency Collateral Management and Global Head of Securities Clearance, will take over Tradewind’s operations immediately.

Those currently include the management of the company’s flagship metals market, which employs blockchain to streamline custody, trade and security of precious metals.

“Michael is a leader with significant experience working with corporations, creating capital-efficient products, operating at scale, and delivering value to shareholders,” Blake Darcy, Executive Chairman of Tradewind, commented in the press release. He added:

“The Board and I are confident that he is the right person to take Tradewind to the next level in our global pursuit of a more efficient, transparent, secure and cost-effective precious metals ecosystem.”

As Cointelegraph reported, interest in teaming up blockchain and cryptocurrency technology with the precious metals industry continues to grow.

Last month, blockchain trust company Paxos announced it would release a gold-backed cryptocurrency before the end of the year.

Last year, meanwhile, another senior JPMorgan executive, former vice president of North American investment banking Pang Huadong, publicly stated he believed blockchain technology could play a pivotal role in averting a future economic crisis.

“Smart deployment of technology can benefit multiple participants in the ecosystem,” Albanese added.