Tuesday, January 15, 2019

Malaysia Starts Regulating Cryptocurrencies Today

 

Malaysia's finance minister has announced that the order to regulate cryptocurrencies and initial coin offerings as securities has come into force. Crypto service providers and exchanges are required to obtain authorization from the country's Securities Commission, which will work with the central bank to ensure compliance.

Regulating as Securities
Malaysian Finance Minister Lim Guan Eng said on Monday that his country "will regulate initial coin offerings (ICOs) and the trade of cryptocurrencies," Reuters reported, adding:

An order to recognize digital currencies and digital tokens as securities will come into force on Jan. 15, under the regulation of the Securities Commission Malaysia [SC].

The order is known as "the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019." Cryptocurrencies, ICOs and their related activities must comply with relevant securities laws and be approved by the commission, the minister explained.

Following Lim's statement, the Securities Commission Malaysia confirmed that it "will put in place guidelines to regulate offering and trading of digital assets." The regulator noted that "the offering of digital assets, as well as its associated activities, will require authorisation from the SC and compliance with relevant securities laws and regulations," elaborating:

The guidelines will among others, establish criteria for determining fit and properness of issuers and exchange operators, disclosure standards and best practices in price discovery, trading rules and client asset protection. Those dealing in digital assets will be required to put in place anti-money laundering and counter-terrorism financing (AML / CFT) rules, cyber security and business continuity measures.

Furthermore, the commission stated that it "will enter into coordination arrangements" with the Bank Negara Malaysia, the country's central bank, in order "to ensure compliance with laws and regulations under the purview of both regulators." In addition, the regulator revealed that "The relevant regulatory framework is expected to be launched by end-Q1 2019."

Lim was quoted by The Star as saying, "Any person offering an ICO or operating a digital asset exchange without SC's approval may be punished, on conviction, with imprisonment not exceeding 10 years and fine not exceeding RM10mil [~$2.44 million]."

Ministry of Finance Sees Potential
The finance ministry "views digital assets, as well as … underlying blockchain technologies, as having the potential to bring about innovation in both old and new industries," Lim further described, elaborating:

In particular, we believe digital assets have a role to play as an alternative fundraising avenue for entrepreneurs and new businesses, and an alternate asset class for investors.

Meanwhile, Bank Negara Malaysia has repeatedly said that cryptocurrencies are not legal tender in its country. The central bank has advised the public to carefully evaluate the risks associated in dealing with them.

Bank Negara Malaysia has published a list of companies that have declared themselves as cryptocurrency exchanges or service providers, but emphasized that it has neither licensed nor authorized these businesses. Among companies on the list are Belfrics Malaysia, Bit Malay, Bitpoint Malaysia, Bit Trade Enterprise, Bong Technology, Bxm, Luno Malaysia, Openbit, Udax International, Upbit Malaysia, and Xbit Asia.


The Daily: Bittrex Opens OTC Desk, Bakkt Acquires Futures Team

 


In today's edition of The Daily, we cover a number of stories that show how the cryptocurrency ecosystem is evolving to become more inviting to institutional investors. Bittrex exchange opens an OTC trading desk, Bakkt "acquihires" a futures compliance team, and Swiss investment bank Vontobel launches a custody solution.

U.S.-based digital asset exchange Bittrex has announced that it has opened an over-the-counter (OTC) desk, which includes trading on nearly all 200 tokens available on the platform. It will offer approved customers with reduced price risk, rapid trade execution and guaranteed pricing for large trades, which are typically $250,000 or greater. The new OTC desk will also accept both cryptocurrency and USD wire transfers for deposits.

"We're excited to offer this new, game-changing trading option for our customers," said Bittrex CEO Bill Shihara. "With one of the most extensive selections of digital assets of any OTC desk available, this offering will be another way for Bittrex to further advance adoption of blockchain technology worldwide, while also providing our customers with price certainty and a fast and easy way to trade large blocks of digital assets."

Bakkt Acquires Futures Team

Bakkt, the digital asset subsidiary of  Intercontinental Exchange (NYSE: ICE) which recently raised $182.5 million, has completed its first acquisition. The company announced it entered into an agreement to acquire certain valuable assets of Rosenthal Collins Group (RCG), an independent futures commission merchant.

The goal of the deal is to purchase capabilities needed for developing the bitcoin futures platform. The transaction is expect to close in February and will include the members of the RCG team joining Bakkt. It is said to enhance the company's risk management and treasury operations with both systems and expertise, as well as to contribute to its regulatory, AML/KYC and customer service operations.

"This acquisition underlines the fact we're not standing still as we await regulatory approval by the CFTC for the launch of regulated trading in our crypto markets," stated Bakkt CEO Kelly Loeffle. "Our mission requires significant investment in technology to establish an innovative platform, as well as financial market expertise to deliver the most trusted fintech ecosystem for digital assets."

Vontobel Launches Crypto Vault

Investment bank Vontobel, the third-largest provider of B2B custody and execution services in Switzerland, has launched a 'Digital Asset Vault'. The service allows Vontobel's clients, which include over 100 banks and wealth managers, to issue instructions for the purchase, custody and transfer of digital assets integrated within their familiar banking infrastructure and regulated environment. Financial intermediaries could also use the service to offer their own clients a solution for digital assets.

"Digital Asset Vault represents the logical next step in the development of our range of services for digital assets. With our innovative strength and experience, we have thus closed the gap between existing and digital assets. By incorporating digital assets into our own banking infrastructure, we have also become the first provider to already meet the high standards required by financial intermediaries and their regulators," stated Roger Studer, head of Vontobel Investment Banking.

Wednesday, January 9, 2019

Waves Platform; Web3 Apps and Products: Trustless, Synergistic and Monetizable

 



We live in the era of tectonic shifts in society and technology. The shape of the future world is still quite vague, and changing all the time. Futuristic concepts that have been proposed not so long ago stop making sense or need to be adjusted. One thing is obvious — development of the Internet will be crucial for the development of the world we live in, and what happens to the Internet will essentially happen to the world.

The concept of Web3.0 that emerged almost twenty years ago acquires a more tangible shape only now. Because of the emergence of the blockchain technology we are starting seeing some products that can be called Web3 prototypes. It's still too early to lay out the standards for the future Web, we might need some more products to actually understand what those standards should be. On the other hand, we could define Web3 products essentials, since now we have all the major ingredients for building applications that are essentially different from the applications we are accustomed to now.

Web1, the original Internet, was just a collection of interlinked documents with very little interactivity. Web2, the Web we use now, is interactive but centralized, it essentially mimics the structure of human society with ineffective vertical structures, controlling but at the same time vulnerable. Current Internet infrastructure quite often brings out the worst in society: due to the increased number of social connections we get fragmentation and segmentation on steroids — despite its global nature the Internet paradoxically leads to less, not more, connectivity in many cases.

Web3 was proposed as Semantic Web, a Web of Meaning. It might sound different from the Web3 we have in mind now, but if we look more closely we'll see that it's not really the case. "Semantic" in this setting means understandable by computers and running according to protocols, decentralization is essential in the true semantic approach. Protocol becomes the king of Web3, there's no need for trust any more, once established Protocol runs indefinitely and cannot be manipulated.

Web3 needs decentralization in its core; decentralization is not the whole of it but it is the foundation for other technologies. This is the glue that connects disparate technologies in a synergistic consortium. Web3 is holistic, it does not pit one technology against another, it brings them together on a layer which minimizes the need for trust.

Web3 is going to be deeply intertwined with the society structure, in Web2 you have some stale concepts brought over to the Internet, now the process becomes reversed — Web3 leads the way, showing more effective approach to human interaction.

So what are the essential features of Web3 Products and applications?

Web3 products minimize the need for trusted third parties and let you control your data.
All the data created by the user is controlled by the user; she explicitly allows access to her data including all the data she produces. Private keys are stored on the user side, there is no need for centralized user authentication. Data storage is as decentralized as possible; only encrypted data can be stored in a centralized way. Access to sensitive user data is fully controlled by the user.

Web3 products are synergistic. Combination of different technologies is essential, combined they produce new added value.
Combinations of IoT, Big Data, AI and distributed ledgers are very natural, they create trustless data processing environment that cannot be manipulated.

Monetization of Web3 products is transparent. There's no hidden monetization through collected user data. You get what you paid for, and you know how the money is made.
New technology begets new economy. Through tokenization we achieve transparency in Web3 business models. Decentralized does not mean non-monetizable, it means monetizable in a new and transparent way.

So what Web3 products are we going to see soon? Browsers with an integrated blockchain layer and private keys stored on the user side; uncensored or community-censored social networks where access to the network cannot be denied and user data deleted uncontrollably; messengers that run on blockchain private/public key pairs and, even if not completely decentralized, allow for multiple public servers; enterprise systems running on a decentralized layer and processing huge amounts of data in real time.

Web3 concept is inclusive, it it not a concrete product, it is rather a philosophy that can be implemented for any application type. In 2019 first true Web3 products will be launched.

Venezuela Decrees Crypto Operators Must Pay Taxes in Cryptocurrencies

 

The Venezuelan government has published a decree requiring taxpayers with crypto operations in the country to pay their taxes in cryptocurrencies. Similarly, operators of foreign currencies must pay their taxes in those currencies. The decree states that the change is necessary for the "strengthening of the current fiscal regime."

Paying Taxes in Cryptocurrencies
The Venezuelan government published the official gazette No. 6,420 dated Dec. 28 on Monday, local media reported. It contains Decree No. 3,719 which outlines new tax payment rules for cryptocurrency operators. Dinero publication explained:

The government of President Nicolás Maduro published a decree that will require taxpayers who carry out operations in foreign currencies or cryptocurrencies to pay their taxes in that same currency and not in bolivars.

The decree states that "the Venezuelan people are currently facing a fierce war waged by internal and external factors that pursue the deterioration of the economy, which is why it is necessary to adopt sufficient measures to ensure the strengthening of the current fiscal regime." The Ministry of Popular Power of Economy and Finance is in charge of the execution of the decree which is effective as of the time of the publication in the national gazette.

Article one of the decree states that taxpayers in Venezuela "who carry out operations" in foreign currencies or cryptocurrencies as authorized by the law "must determine and pay [their tax] obligations in a foreign currency or cryptocurrency."

Two exemptions are listed in the decree: "transactions of securities traded on a stock exchange" and "the export of goods and services, carried out by public bodies or entities."

Furthermore, the decree describes that payments such as tax refunds for cases established in the decree will be made in the "national currency."

Using Petro for Tax Calculations
Maracaibo Municipality in Venezuela's Zulia State recently announced that it will use the national "cryptocurrency," the petro, as the basis for business tax calculations, Runrunes reported. The announcement created some confusion among residents, who thought that they would have to pay their taxes in petros.

On Tuesday, the intendant of Servicio Desconcentrado de Administración Tributaria (Sedemat), Jean Carlos Martínez, clarified to Noticia al Dia publication that "taxpayers will not be charged taxes in petros." He elaborated:

We are using the value of the petro as a reference unit to be able to determine the minimum tax, since the ordinance of the current economic unit is still stipulated in percentages of gross income.

He added that the petro has two values: one as a cryptocurrency and the other is "as a unit of account that translates into 9,000 sovereign bolivars, which will be used in passport procedures or current salaries."

The new decree establishes "that the payment of taxes will be made depending on the economic activity of each company or microenterprise," the news outlet noted. Martinez was then quoted as saying, "If someone had transactions in petro, bitcoin or other currency, [they] should declare [their income] according to the currency that [they] manage."

Wednesday, January 2, 2019

Institutional Investors Are Changing the Cryptocurrency Market

 


Last year, reports emerged that George Soros and the Rockefeller family were beginning to take positions in the emergent crypto asset class, according to Bloomberg. The family's $26 billion Soros Fund Management was supposedly considering trading digital assets. The Rockefeller family's VC arm, Venrock, decided to take a different approach by partnering with Coinfund to assist entrepreneurs in launching blockchain businesses. 

Mike Novogratz, the chief executive officer of Galaxy Investment Partners, said he sees Q1 and Q2 2019 as a period when more institutions will start to come into crypto. He also expects the crypto markets to turn bullish again in 2019. 

Previously, investors were hesitant to enter the crypto markets due to high volatility and lack of regulation, but this is changing, with large players starting to take positions. How Institutional Investors Are Changing the Cryptocurrency Market
Stefan Neagu, co-founder of digital identity management system Persona, said: "BTC attracted large players, as the institutional investors saw BTC as an investment instrument. This helped the crypto market because it was not a playground anymore, but rather the sandbox of a limited group of people with money from a real economy being shifted to the crypto market."      

In 2018, over-the-counter (OTC) market makers have thrived, with many institutional traders shifting to OTC. Etoro announced that it had opened an OTC platform for institutional buyers and Coinbase and Hodl Hodl launched OTC desks in November. 

According to cryptocurrency research group Diar, institutional cryptocurrency trading on traditional exchanges has been diminishing in volume due to BTC being welcomed into major outfit portfolios this year. There has instead been a shift to OTC trading. 

During OTC market hours, there has been an increase in BTC trading volume by 20 percent, while Grayscale's Bitcoin Investment Trust (GBTC) volumes were down 35 percent in 2017 vs. 2018 for the same period. It seems institutional traders might be shifting towards higher liquidity OTC physical BTC markets. 

Russians See Growing Number of Options to Buy Cryptocurrencies

 


Interest towards cryptocurrencies in Russia remained relatively stable throughout 2018, despite the significant drop in their prices. Ruble-denominated trade on Localbitcoins, for example, has shown a generally positive trend since last spring. In the past year, Russians also saw a growing number of other options to purchase digital coins.

Russians Not Losing Interest in Cryptocurrencies
The last 12 months will be remembered in the crypto space as a period of bearish sentiment and shrinking capitalization. In 2018, leading coins such as BTC saw an 80 percent drop in their valuation compared to the all-time highs reached in the last weeks of 2017. However, according to Olga Prokhorova from the International Financial Center investment consultancy, the falling prices have not significantly decreased interest in cryptocurrencies, and Russia is no exception.

In an interview with the Federal Press news outlet, Prokhorova quoted data from a recently published study by the University of Cambridge which revealed the number of identity-verified users in the ecosystem has increased to over 35 million. The study also noted the increased transaction volumes on P2P exchanges such as Localbitcoins from countries that have experienced monetary crisis. Russia, which has been through financial turmoil in the past, was included in this group of nations lead by Venezuela which is currently in economic trouble.

With the exception of a couple weeks during this past fall, weekly Localbitcoins volumes in Russian rubles have followed an upward trend since the spring of 2018, according to Coin Dance – from the year's low of around 740 million rubles in mid-March (~$10.6 million) to well over 1.2 billion rubles (almost $18 million) in the last full week of December.

Popular Ways to Buy Digital Coins in Russia
Peer-to-peer exchanges are not the only option for Russians looking to acquire cryptocurrencies. There are a number of other platforms and the Russian online publication 1rre has recently summarized the tried-and-tested alternatives, starting with exchanges that are popular in the country such as Exmo, Bitfinex and Bitstamp. Another leading global trading platform, Huobi, recently opened an office in Russia and launched a Russian-language website. Livecoin, Yobit, Hitbtc, C-cex, and Spectrocoin can also be added to the list, according to previous publications. Crypto exchanges are arguably the safest way to buy digital coins, but users need to pass KYC procedures and pay fees.

Another option is to use an online payments processor such as Webmoney, which recently offered its customers the possibility to purchase and exchange cryptocurrencies with fiat money. Verified subscribers can also cash out directly to their bank cards. The major disadvantage in this case is the exchange rate, the news outlet remarks.

A number of online exchangers operating in the country have become a popular choice for many Russian crypto traders. Using their services, however, is still risky and requires some research in advance. A platform called Best Change helps Russians to do that. The website provides information about different options to trade cryptocurrencies with fiat money and claims all listed exchangers are verified.

Cryptocurrency teller machines have been installed in over 20 Russian cities, from the capital Moscow, with at least eight ATMs, to Yakutsk in Siberia. While most of them offer only purchases of popular digital coins such as BCH, BTC, ETH and LTC, some of these devices support sales as well. A new Russian BATM tracker, Cryptocoinmap.ru, was launched recently, as news.Bitcoin.com reported in December. Information about their fees and transaction limits can be found on Coinatmradar.com.

Russians can also buy and sell cryptocurrencies using Telegram bots. One of them, @btc_change_bot, provides Russian language support. It connects buyers and sellers of electronic cash for a commission of 1 percent on the traded amount.

Friday, December 28, 2018

Building for Bulls, Bears and the Crypto Revolution

 
It seems fitting to start my review this year with the same statement and observe how its meaning kaleidoscopes in the new light of 2018.

For context, in December 2017, the price of bitcoin had just hit its all-time high of $19,783.06. The price of ether was about to hit its all-time high of $1,417.38. CryptoKitties were running rampant all over the ethereum network, thousands of ICOs had launched in 2017 and hundreds of dedicated crypto funds opened their doors.

Today, the environment is a bit different. Those crypto funds are starting to shut down. ICOs that raised capital in crypto in 2017 have seen their runways halved and halved again. The price of bitcoin hovers around $3,500 and the price of ether plummeted below $100. CryptoKitties has a meager 378 daily active users, down from over 15,000 daily active users this time last year. Ouch.

What I failed to mention with last year's statement is that the runway isn't always smooth and it isn't going to be at a constant incline.

As Meltem Demirors so gracefully put it, "Tech that changes industries and markets doesn't get built overnight. There are fits, starts, and failures." Obviously, this market is throwing a fit. Furthermore, us builders should talk about it.

But Builders Don't Talk About Price
For as long as I can remember, it's been a significant taboo for builders in the space to talk about price. The market conditions shouldn't affect our attitudes or how we build. We actively avoid getting caught in the hype on the way up and avoid falling into depression on the way down.

We transformed "HODL" into "BUIDL," and there was also short-lived talk of "SHIPL."

However, refusing to engage in "price talk" doesn't mean we can, or should, ignore the swings of the market. This ecosystem is highly speculative and our roadmaps, runways and design choices are affected by larger macroeconomic conditions. Denying that the market conditions affect your work, company, financials, and culture is willful ignorance and is dangerous in the short and long term.

2017: Unprecedented Hype
As we saw in 2017, the bull market garnered previously-unseen hype, which led to new, inexperienced users entering the space en masse. Coinbase was adding hundreds of thousands of new users per day. Companies were hiring support teams by the dozens in an attempt to tread overflowing inboxes.

The things we did in 2017 were reactionary. Building for the short term was prioritized over the long term.

We didn't have refined processes or roadmaps — we had fires that needed to be put out yesterday. We hired those who were willing to wear many hats and didn't require much sleep. We put band-aids on the most glaring user experience issues as they cropped up, and we promised to iterate later. The market's ambitious upswing wasn't tied to the technology and experience being delivered.

2018: The Downward Spiral
2018 was a whole new world. The number of support tickets dropped as fewer new users entered the space. The types of questions we fielded about ICOs plummeted and more technical questions emerged once again.

The members of my team who were solely fueled by the adrenaline of 2017 had to evolve or move on to different projects. Some even left the crypto-space entirely. Our hiring and recruiting practices evolved, and the skills and personality traits we looked for became more refined.

The actions users are taking in 2018 have changed as well.

Whether it was taxes, the SEC, a more bearish market or the realization that the scope of blockchain use cases is still limited, people aren't doing much these days. Even when we look beyond the trading and investment activity via DappRadar and Dapp.com, we can see just how little activity is happening.

The market is questioning how "decentralized" applies to a world beyond us cypherpunks and early adopters. It's a valid question that us builders should ask too.

2019: Blood in the Streets?
To steal from Anthony Pompliano (who likely stole it from someone else), there is no "blood in the streets" yet. The blood is coming, but it isn't only from the individuals who have portfolios that are down more than 100 percent.

It is from anyone and everyone who failed to anticipate just how long this revolution would take. It is from people who didn't believe in the possibility of a market crash or a long winter. It is the ICOs that had all their holdings in crypto. It's from those who measure growth and value in terms of months, not years or decades.

More robust companies can reduce the sizes of their teams and cease throwing extravagant parties to lengthen their runways.

Less seasoned companies will have no choice but to shut down. And the most important companies are likely the ones you haven't yet heard of or are yet to be created.

2019 & Beyond
The coming years have the potential for people to create real, revolutionary value. This will not be the short-term capital creation that ICOs brought in 2017. It will be significantly deeper, take significantly longer and it will spawn from unlikely sources.

Reacting to new users and irrational exuberance is a different ball game than building products that break down the barriers of cryptocurrencies. In order to be relevant and stay relevant, you have to do more.

Those that will have a lasting impact and create the most value will be those who can build for both the bull market, the bear market and beyond the market. They will have the foresight to expect the unexpected, the hindsight to learn from the past and the insight to solve problems in unprecedented ways.

They will use their teams, tools, knowledge and communities to not only build for the next wave of users, but also help bring in the next wave of users. They will not build "on the blockchain" or "for the blockchain." They will build better solutions that happen to utilize the blockchain.

It's easier to build products for your existing environment and existing users, but it is shortsighted and will leave you straggling in the long term. Look outside this space for inspiration. Learn from traditional companies who have been around for decades or even centuries. Take the time to understand the motivations and needs of people around the globe. Don't make product decisions based on the graveyard of activity today. Don't create personas based on a Twitter poll you spun up yesterday.

Look to the future and anticipate. Your job is no longer to react to the current conditions. It's to be a fortune teller of tomorrow's landscape.

Sparking the Revolution
Many point to the dot-com bubble when analyzing the cryptocurrency markets in 2017.

Both saw 1,000 percent returns, rampant day-trading, fraud, capital flowing to any company with ".com" or "blockchain" in its name, and the creation of overnight millionaires even when those millionaires had neither delivered products nor profits. It's an easy comparison. But it's only one slice of history.

The repetition of history won't manifest as a carbon copy of itself, so it's hard to know exactly how this decentralized revolution will play out in totality. The revolution will be simultaneously subtle and profound. What we are building cannot be measured in months or judged by the hype cycles. We are aiming to transform nearly every industry that exists, starting with the financial industry.

The blockchain has come a long way since Satoshi's white paper and it will take at least that long to disrupt life in a meaningful way.

We have to keep zooming out to keep our perspective wide. The dot-com bubble isn't what transformed the internet, nor will the last two years be what transforms the blockchain. We need to look at the entire history of the internet and watch how it evolved over time. We need to examine how the Industrial Revolution managed to touch almost every aspect of daily life. We need to remember The Renaissance's lasting influence on intellectual inquiry.

And, as we do, we should be intimidated by what we have yet to accomplish and inspired by the opportunity to forge the runway ahead. Remember, the real lift off has yet to occur.

Judge Denies Craig Wright’s Motion to Dismiss Billion-Dollar Bitcoin Lawsuit

 

On Dec. 27, court documents from the case against the Nchain chief scientist, Craig Wright, explained a large portion of his recent dismissal motions were found "not warranted" and were denied. Wright is being sued for 1.1 million BTC in a legal case in Florida that alleges he manipulated David Kleiman's family.

The Lawsuit Against Craig Wright for 1.1 Million BTC Moves Forward
According to case 18-CV-80176 Kleiman v. Wright filed in South Florida, Craig Wright is accused of allegedly interfering with David Kleiman's bitcoin assets after he died. Kleiman's family believes David and Wright played a role in the early days of Bitcoin and possibly created the technology. This assumption was bolstered back when Kleiman, a forensic computer investigator was featured with Wright in tech publications such as Wired and Gizmodo, because they too thought the duo were possible Satoshi suspects.

Kleiman died in 2013 with very little money after fighting with MRSA, a bacterium infection that spreads in different parts of the body. His brother Ira Kleiman alleges Wright of plotting to "seize Dave's bitcoins and his rights to certain intellectual property," according to the legal documents filed last February. Kleiman's estate is suing Wright for approximately 1.1 million BTC ($3.9 billion) or the coin's fair market value and damages associated with IP theft.

Wright Accused of Grifting the Kleiman Family and Transferring David's Bitcoins to Various International Trusts
Nchain's Craig Wright and his legal representation, Rivero Mestre LLP, attempted to dismiss the case earlier this year. Wright's motion emphasized that Kleiman's lawsuit was full of "supposition, speculation, conflicting allegations, hearsay, and innuendo." The decision published on Dec. 27 explains the Florida district Judge Beth Bloom has granted Wright's motion to dismiss counts III, and IV. However, Wright must answer to counts I, II, V-IX of the amended complaint and he has until Jan. 10, 2019, to respond. For instance the 40-page court document states:   

[The] court finds that plaintiffs have sufficiently alleged a claim for conversion — The Amended Complaint alleges that defendant converted at least 300,000 bitcoins upon Dave's death and transferred them to various international trusts, was an unauthorized act that deprived the plaintiffs of the bitcoins therein — Accordingly, plaintiffs' claim for conversion (Count I) survives defendant's motion to dismiss.

The Kleiman complaints further allege that Wright took advantage of a family who didn't know too much about the technology. According to the lawsuit, the Kleiman family was unaware of certain property and IP assets that existed. Allegedly, Wright reached out to Dave's elderly father 10-months after he passed and said, "he was not seek[ing] anything other than to give [him] information about [his] son, and offering to help the Kleiman family recover what Dave owned."  

The Amended Complaint also says that Wright promised shares to David's family for a company called "Coin-Exch" and detailed the shares were "worth millions." Wright is also accused of "several fraudulent omissions and misrepresentations" to the Kleiman family and related to the property and assets David may have owned. Judge Bloom explains that the Eleventh Circuit Court of Appeals has not decided on whether or not bitcoins are considered "money." But Bloom emphasized the court still takes alleged victims and injury that occurs on home soil very seriously.   

"This controversy concerns a Florida company, regarding Florida assets (bitcoins mined in Florida) and intellectual property developed by a Florida company, where both the injured parties are Florida citizens," Bloom's decision states. "Therefore, the Southern District of Florida undeniably has a strong interest in adjudicating a case in which its residents claim that harm was committed against them."

The court documents assert that with counts I, II, V-IX still standing, Wright has not met his "heavy burden" against the opposing Kleiman estate and "dismissal on forum non-conveniens grounds is therefore not warranted."

Wednesday, December 19, 2018

Waves Platform Raises $120 Million for Private Blockchain

 

Waves Platform, a public blockchain network that has helped digital startups create tokens, said it raised $120 million for itself to roll out a private version of its Vostok system for corporations and governments.

Private investors were tapped in the fundraising round led by London-based financial services group Dolfin, Waves said in a statement Wednesday. The company's own cryptocurrency, known as Waves, jumped almost 50 percent to $3.80 in the past 24 hours, according to CoinmarketCap.com prices at 9:40 a.m. in London.

Founded in Switzerland by Russian engineer Sasha Ivanov, Waves Platform has benefited from a recent boom of initial coin offerings that let firms create and sell tokens via its distributed-ledger technology, which it describes as a fast and easy-to-use blockchain.

The Waves token has a market value of about $383 million, down from as much as $1.7 billion in December 2017, close to the speculative peak for cryptocurrencies, according to CoinMarketMap.com.

"The cryptocurrency rush is over now, while the idea of using a decentralized network to store data and cut costs is still relevant," Ivanov said in an interview in his Moscow office.

Large firms and state entities often find the speed and security level of public blockchains to be insufficient, he said. So-called private blockchains, which have limited numbers of users, protect data better, according to Ivanov.

Vostok, similar to the International Business Machines Corp.-led Hyperledger in the U.S., will focus on Europe, Asia and the former USSR, expecting its first projects in the beginning of 2019, Ivanov said.
 


Russians to Be Allowed ICO Investments up to $9,000 per Year
Russian lawmakers have revised another bill regarding the regulation of the industry built around cryptocurrencies. In its latest version, the draft law on crowdfunding sets the maximum amount of money ordinary Russians will be permitted to invest in projects such as ICOs at less than $9,000 per year.     

Investments Limited to $1,500 per Project
The bill "On attracting investments using investment platforms" is one of the three pieces of legislation aimed at regulating the crypto industry that were adopted on first reading by the State Duma in May. The initial text approved by the lower house of Russia's parliament did not contain such limits. It only read that they should be determined in sub-statutory acts issued by the Central Bank of the Russian Federation (CBR).

According to the revamped draft law, private individuals will be allowed to invest through crowdfunding platforms up to 600,000 Russian rubles (less than $9,000) per year only, and a maximum of 100,000 rubles (~$1,500) per project RBC reported, quoting a copy of the document. Any investment exceeding 600,000 rubles, made by qualified investors or financial institutions, will be subject to mandatory oversight by the country's financial watchdog, Rosfinmonitoring, in order to prevent money laundering.

The new restrictions will limit the access of ordinary citizens to initial coin offerings (ICOs). The authorities in Moscow claim they want to protect Russians from the associated risks. In a statement, the CBR warned that investing through crowdfunding platforms can lead to the loss of all invested funds. However, the limits will not apply to social and charitable crowdfunding initiatives.

No Restrictions for 'Qualified' Investors
Professional investors will not be restricted in their participation in crowdfunding projects. Private individuals can be treated as "qualified investors" provided they meet certain criteria detailed in the federal law "On the securities market." For example, they must control assets worth at least 6 million rubles (almost $90,000) and prove they have been employed in the securities industry for at least two years.

The revised crowdfunding bill is likely to be voted on second reading in the Duma in January revealed one of its authors, the chairman of the Financial Markets Committee Anatoly Aksakov. Before the parliamentary summer vacation, deputies approved two other drafts – a bill amending the country's Civil Code to introduce a legal definition of "digital rights" and the main draft pertaining to the regulation of cryptocurrencies, the law "On digital financial assets."

The latter bill also underwent serious revision, with lawmakers dropping key terms like "cryptocurrency" and "mining." Representatives of the crypto industry protested and proposed an alternative bill granting cryptocurrencies "special status." However, Russia's Deputy Prime Minister Maxim Akimov recently stated that authorities do not plan to introduce any more significant amendments to the texts. The crowdfunding law has also lost important terms related to the crypto economy such as "tokens" and "smart contracts."

Wednesday, December 12, 2018

Crypto Price Watch: Waves, Tezos and Maker See Green Despite Dwindling Market Prices

 


Even as a majority of the top 10 altcoins within today's crypto market continue to see red, there are digital currencies like Waves, Maker, and Tezos that have witnessed an upward surge of 9%, 3%, and 2.5% respectively over the course of the past 24 hours.
Waves Continues Its Strong Performance

As can be seen from the chart below, around a week back the price of a single Waves token jumped by over 50% to touch an impressive price point of $2.32. In terms of what could have sparked this massive uptrend, many experts believe that the recent Waves Mobile app update could have had something to do with the increase.

For those not aware, the Waves dev team recently announced the launch of their much-awaited 'operational protocol upgrade' which allows customers to seamlessly "deposit, store and withdraw their altcoins" in a safe and secure manner. Not only that, but users can now also trade and lease out their assets on the Waves DEX with the touch of a button.
#WavesPlatform has had a great November with the release of our new mobile app and several other developments! We're continuing to build some outstanding tech to bring #blockchain to the mainstream. Here's what we've been up to in the past month: https://t.co/OcrvMyvkwn$WAVES

— Waves Platform (@wavesplatform) December 11, 2018

Additionally, it is also worth noting that the latest iteration of the Waves app will introduce several new exchange listings as well as provide users with full integration support with the Ledger Nano S hardware wallet.
Tezos (XTZ) Surprises Everyone With its Strong Performance

While many had relegated Tezos (XTZ) to the peripheral fringes of the crypto world recently, it now appears as though the project is making a steady comeback (especially since the currency has been showcasing a lot positive financial momentum over the course of the past week or so).

For those who may not remember, Tezos is probably most famous (or infamous) for having raised a whopping $232 million during its ICO phase as well as the scandal that rocked the project straight after.

Lastly, it is also worth pointing out that the XTZ token is currently trading below its original ICO price of $0.51 for around $0.375 (at press time). However, this drop is not as significant as the one witnessed by Ethereum as well as some of the other premier cryptos like BTC, BCH.

In this regard, a market analyst for iBuyTezos.com pointed out that Tezos was not even listed on a single exchange at the start of the year. The reason given for this delay was that the project's native blockchain network had not gone live till like mid-2018.

Tezos wasn't even on an exchange in Jan of 2018.
— Jovan Smith (@JvdollaJovan) December 6, 2018

Final Take
While many of the top crypto coins in the market have struggled to stay afloat throughout the year, there are some lesser-known assets that have continued their strong performance recently. It now remains to be seen how the future of smaller tokens such as Maker, DEX, Revain, Tezos plays out in the coming few weeks.

Former Mt. Gox CEO Could Face 10 Years in Jail Over Embezzlement

 


Japanese prosecutors are seeking a 10-year jail term for Mark Karpeles, the former CEO of Mt. Gox. The embattled Frenchman, who has been previously accused of diverting company money for prostitutes, business acquisitions and luxury items, is facing charges of transferring $3 million of client funds to his own account for investment in a software development business.

Karpeles Pleads Innocence But Authorities Aren't Buying It
According to prosecutors, Mark Karpeles falsified Mt. Gox's trading system to make customer balances appear healthier than they in fact were. He also acted in violation of the country's corporate law, Japanese daily The Mainichi reported on Dec. 12.

Karpeles has sworn his innocence and says the money, moved in the last four months of 2013, was meant to serve as only a temporary loan. He also argued, earlier in the trial, that the funds in question did not belong to clients but were his now-defunct company's revenue.

However, prosecutors have argued there is no evidence that this diversion of funds was merely as a temporary loan. "There was no documentation of loans and there was no intention of paying back," reads their submission at the Tokyo District Court. Karpeles, prosecutors argue, must be slapped with a harsh sentence for betraying the confidence of investors who trusted him with their money.

The Great Bitcoin Heist
Mt. Gox went from handling 70 percent of global bitcoin trades in 2013 to bankruptcy in 2014 after about $400 million was supposedly lost to hackers, with 200,000 bitcoins recovered two weeks later. The current lawsuit is not investigating the cause of this theft.

As the effects of the discrepancy became apparent, the exchange initially delayed withdrawals for up to three months before completely ceasing them altogether, ostensibly over the theft of bitcoins. The company entered bankruptcy proceedings in 2014 but has since undergone civil rehabilitation processes to enable it to pay bitcoin still owed to investors. It has yet to be determined how much users will be repaid, given the numerous fluctuations in bitcoin's trading price since 2014.

Mark Karpeles
"I never imagined things would end this way and I am forever sorry for everything that's taken place and all the effect it had on everyone involved," Karpeles said earlier during the bankruptcy saga, although he has consistently maintained his innocence. In November, a Mt. Gox trustee sought to defer the deadline for filing civil rehabilitation claims, initially slated for October, until this month.

Regardless of how the matter plays out in Japan, Karpeles faces more legal trouble in the U.S. where former Mt. Gox clients filed a lawsuit against him several months ago. Karpeles' lawyers want the lawsuit dismissed on the basis that a U.S. court has no jurisdiction over the matter.