'Blockchain will belong to us': Putin calls dibs on blockchain

‘Blockchain will belong to us’: Putin calls dibs on blockchain

The Russian president is reigniting a decades-old rivalry saying the US has the Internet, but blockchain technology will be Russia’s.

Both start-up companies and established industry giants are scurrying to cut a piece of the market as blockchain technology ushers in a lot of possibilities and drives several existing practices into obsolescence. But private companies are not the only ones who are going in on the blockchain race. Several governments are also working on their own projects in their bid to be on the front line of the industry, or at least to keep from falling behind.

As early as now, Vladimir Putin is eager to plant the Russian flag on the technology, even if only through a verbal claim (for now). As if it were another Moon race, the Russian president was quick to reignite a decades-old rivalry.

“Look, the Internet belongs to the Americans,” Putin says, “but blockchain will belong to us.”

Putin has been openly interested in and actively endorsing blockchain technology. In June last year, he met with Ethereum founder Vitalik Buterin. Just a few months ago, he met with Herman Gref, the president of Russia’s largest bank, Sberbank, and endorsed the technology, saying the country needs further progress—beyond what they already have. Below is a rough translation of his statement:

“Other colleagues and citizens of the country may ask: Why do we need all this? If we have everything—we have oil, gas, coal, metals of all kinds…gold, platinum, diamonds—everything.”

“But we need to advance further—this is what we need. And we have to work for this,” he added. “One of our colleagues, the former oil minister of an Arab country said: ‘the Stone Age has not ended due to the lack of stones, but because new technologies have appeared. And new technologies are appearing in the world now.”

He added that those who are “late in the race” will quickly become dependent on those who were in the lead.

And despite Russia’s alleged involvement in the US elections, the nation was actually quick to tap on blockchain technology to curb corruption and provide better transparency in voting. Early this year, they started a pilot run for a blockchain-based e-voting system called Active Citizen, although the application was limited to non-political decisions like speed limits and bus routes.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Regulation is coming: SEC commissioner slams ICO industry

Regulation is coming: SEC commissioner slams ICO industry

The U.S. Securities and Exchange Commission (SEC) has been intensifying its rhetoric around regulating initial coin offerings (ICOs) in recent months, as the regulator increasingly turns its attention to token crowdsales and the wider cryptocurrency space.

Now, in one of the starkest official criticisms to date, a serving commissioner at the securities regulator has criticised the current state of the ICO space, suggesting investors are currently finding it difficult to separate genuine opportunities from opportunistic scams and frauds.

SEC Commissioner Robert Jackson said the current situation with ICOs was the reason the SEC exists in the first place.

“Investors are having a hard time telling the difference between investments and fraud…If you want to know what our markets would look like with no securities regulation, what it would look like if the SEC didn’t do its job? The answer is the ICO market,” Jackson told CNBC.

Citing “troubling developments” in the sector, he continued to say the commission’s priority was to protect investors who might be drawn in: “Right now we are focused on protecting investors who are getting hurt in this market.”

However, Jackson was more optimistic about the future for ICOs, which he sees as inevitably subject to existing US securities laws, telling the news outlet: “Down the road, I think we will be thinking about ways to make those investments work consistent with our securities laws.”

Jackson’s comments come in the wake of several other high profile announcements from US authorities around ICOs and cryptocurrencies. A divisional director of the SEC confirmed at a hearing in the House of Representatives last week that the securities regulator has been working towards a regulatory framework for ICOs, while a former executive from the CFTC confirmed his personal view that many ICOs, including those for cryptocurrencies like Ripple’s XRP and ETH, could ultimately be found to be securities.

It seems inevitably at this stage that the SEC will look to introduce firmer regulation around ICOs and new cryptocurrency tokens. It remains to be seen whether this will help reduce instances of fraud and deception, already too prominent with investments of this kind.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
CFTC ‘cryptodad’ chairman to retire in 2019

CFTC ‘cryptodad’ chairman to retire in 2019

The cryptocurrency community is about to lose a prominent voice. J. Christopher Giancarlo, chairman of the U.S. Commodity Futures Trading Commission (CFTC), has announced his intention to retire following the completion of his current term in 2019. Giancarlo, who was given the nickname “cryptodad” after positive comments he made to the U.S. Congress regarding cryptocurrency, has been a supporter and one of the most important proponents of digital currency in the nation’s capital.

During a congressional hearing earlier this year, Giancarlo won significant favor with the crypto community when he said, “It strikes me that we owe it to this new generation to respect their enthusiasm to respect their enthusiasm about virtual currencies with a thoughtful and balanced response, not a dismissive one.” That was seen as a virtually blessing by one of the most important financial figures in Washington, and resulted in a collective cheer among cryptocurrency enthusiasts.

Due in no small part to Giancarlo’s attitude toward the subject, the CFTC has been involved in the creation of two regulated Bitcoin futures products. Both launched last December and are found on the CBOE and CME exchanges. Many opponents expected the assets to implode, but the opposite has happened. They have been trading in an organized manner and have continued to see an increase in trading volume.

The CFTC has also helped to police the cryptocurrency industry, taking an active role in seeking out frauds and scams. Giancarlo’s term will end on April 13, 2019, but he has indicated that he is willing to stay onboard until U.S. President Donald Trump decides on a successor. Giancarlo has not provided details on why he’s retiring; however, a clue may come from the federal budget signed by Trump in March. The CFTC’s budget was reduced by $1 million, while that of the Securities and Exchange Commission (SEC), which seems to have launched a war on cryptocurrencies and initial coin offerings (ICOs), saw its budget increase by 3%.

Giancarlo has been a loud voice for cryptocurrencies, even repeatedly tweeting his support for the space. This has generated some fallout by critics and cryptocurrency opponents, who have argued that he should not consider any decisions that would define cryptocurrency as an asset class.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
IBITX draws SEC ire over questionable crypto operations

IBITX draws SEC ire over questionable crypto operations

True to its assertion that it would begin an industry-wide crackdown on cryptocurrency-related companies, the U.S. Securities and Exchange Commission (SEC) has set its sights on another business. This time, the securities regulator has temporarily suspended all trading activities of IBITX Software.

The company was operating the IBITX over-the-counter (OTC) exchange as a “Dynamic new type of currency exchange which matches new Initial Currency Offerings (ICOs) and those interested in buying those currencies in a single platform.” It boasted of being one of the first cryptocurrency exchanges that brought together a fiat-to-crypto platform and crowd sales. It had been trading on the OTC Markets under the symbol IBXS and had a market cap of around $143 million before being suspended.

IBITX is registered as a New York corporation, but lists its primary place of business as the Philippines. The SEC took the decision to suspend the company due to the accuracy of unspecified information found in company press releases and disclosure statements that were published for investors.

One possible source of the SEC’s ire could come from a press release issued by the company on April 9. In it, IBITX announced the creation of cryptocurrency exchange software that could be licensed to financial service providers, brokerage houses and jurisdictions where cryptocurrency trading is allowed. The software purportedly offered the receiving companies the ability to create its own coins and ICOs, and gave the impression that these were automatically authorized for release without additional registration with the SEC.

SEC’s suspension order went into effect on April 23, and will end on May 4.

The SEC is beginning to take a seriously hard look at all companies in the cryptocurrency industry, especially those that offer ICOs. Several private companies, as well as exchanges, have already come under fire this year, and there are reports that the agency is working on “several dozen” more cases. After having its annual budget increased by 3% this year, the SEC is already finding ways to spend the extra funds.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Ethereum

Ethereum, Ripple tokens could be securities, says former CFTC head

Two of the world’s largest cryptocurrencies could, in fact, be securities, according to the former chief of the U.S. Commodity Futures Trading Commission (CFTC).

Major cryptocurrencies like Ether (ETH) and Ripple (XRP) still operate in a largely unregulated environment, and according to former CFTC chairman Gary Gensler, they could yet still run into difficulties with U.S. regulators.

The comments are significant since securities are regulated in the U.S., as with most developed economies worldwide.

In comments delivered at an MIT blockchain event, Gensler confirmed his personal view that ETH and in particular Ripple’s XRP token, should be classified as securities. Citing the Howey Test, which can be used to decide when an investment is a security, Gensler told delegates that both Ethereum and Ripple tokens could be “operating outside of U.S. laws.”

Classification as a security brings a new level of scrutiny for any financial instrument, with specific regulation under the watch of the Securities and Exchange Commission a legal requirement before any security can be sold.

The specific features of ETH and XRP, including the fact they were launched via initial coin offerings (ICOs), means they fall within the parameters of the Howey Test, and should be regulated as securities, according to Gensler’s argument.

However, he highlighted that Bitcoin (BCH) would not be classed as a security on the same basis, because it was not launched with an ICO.

If the comments give any insight into the attitude of U.S. regulators, there could well be ramifications for those crypto tokens legally deemed to be securities, with severe penalties for those responsible for any breach in securities laws.

In response, a statement from Ripple dismissed the idea that their token should be regulated as a form of security.

In an email to Bloomberg, the Ripple spokesperson said the company doesn’t believe XRP should be classified as security since it “does not give its owners an interest or stake in Ripple and they are not paid dividends.”

“XRP exists independent of Ripple, was created before the company and will exist after it. Ripple has always promoted XRP as a useful digital asset for enterprise payments because it’s faster, more scalable and more inexpensive than other digital assets. That utility exists completely separate from Ripple,” according to Ripple’s statement.

The Ethereum Foundation has yet to respond to Gensler’s statement.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Third man in Mayweather-backed $32M ICO faces fraud charges

Third man in Mayweather-backed $32M ICO faces fraud charges

In a further debacle for the initial coin offering (ICO) sector, the U.S. Securities and Exchange Commission has announced additional fraud charges stemming from its investigation into Centra Tech’s $32 million token crowdsale.

One of Centra’s co-founders, Raymond Trapani, was charged with violating the anti-fraud and registration provisions of the federal securities laws in connection with the 2017 ICO, in which the company issued CTR tokens to investors. Centra’s two other founders, Sohrab Sharma and Robert Farkas, have already been charged for their participation in the alleged fraud.

In a statement, SEC Enforcement Division’s Cyber Unit Chief Robert Cohen said the three “went to great lengths to create the false impression that they had developed a viable, cutting-edge technology.”

Sadly, this is only one of many Ponzi-like situations which cryptocurrency investors have found themselves in—one recalls the Bitconnect and USI-Tech schemes, in which millions have reportedly been lost to alleged fraud with ongoing lawsuits likely to drag o for years.

In its charge sheet, the SEC claimed that Trapani was the main mastermind behind Centra’s ICO which was deemed to be fraudulent due to the fact that it made fictitious and untrue claims about its relationships with several major credit card companies that did not exist. The ICO depended heavily on celebrities and social media to market their scheme. Boxing champion Floyd Mayweather Jr. was one of the celebrities who were heavily paid to promote the ICO. He also endorsed Centra Tech in September, although his Instagram post has since been removed.

Trapani also allegedly created a fictional biography about his experience in the finance industry as well as false descriptions of the company’s products, according to investigators. The complaint also stated that both Trapani and Sharma entered into illegal trading to manipulate the price of the CTR tokens to generate interest and inflate the price artificially.

Another worrying aspect of the case is the uncovering of text messages sent between the shareholders to remove any references to a particular bank after receiving a cease and desist order: “[w]e gotta get that s[***] removed everywhere and blame freelancers lol.” And additionally, while trying to list the CTR Tokens on an exchange using false credentials, Trapani texted Sharma to “cook me up” a false document, prompting Sharma to reply, “Don’t text me that s[***] lol. Delete.”

The SEC’s complaint seeks permanent injunctions against Trapani, as well as the return of allegedly ill-gotten gains plus interest and penalties. It also seeks to prohibit Trapani from serving as a public company officer or director and from participating in any offering of digital or other securities.  In a similar action, the U.S. Attorney’s Office for the Southern District of New York also announced criminal charges against Trapani.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Walmart punts on blockchain tech to secure payment data

Walmart punts on blockchain tech to secure payment data

The U.S Patent and Trademark Office (USPTO) published two patent filings by Walmart describing blockchain-based applications that will help secure payments and protect private information from third parties.

The first patent filing is for a vendor payment sharing system that will help customers order items online and still have the wide selections of in-store shopping. The proposed vendor payment system will have a network that can automatically conduct transactions on a customer’s behalf.

The system will have a computer device, which customers can use to access and received data, and a server, which is programmed to receive information from the customer computer device including “an acceptance indication of the products delivered from a courier service.”

“The server is also programmed to automatically process payment for a total amount due for the products and services related to obtaining and delivering the products and to automatically divide the payment between parties that provided services related to obtaining and delivering the products. The system further may be programmed to encrypt the payment and the division of the payment with a blockchain,” according to the filing

The second patent is for a courier shopping system that will use a blockchain to encrypt payment information. In this system, courier orders are automatically generated after a customer completes and sends his or her shopping list. The system can select a substitute for the item depending on the customer’s preference data in cases where the item is not available in the marketplace. It will also provide information on payments between the vendor and the customer.

The decentralized nature of the blockchain technology and its ability to keep records secured has made various institution seek to use it to make better systems for their operations. PayPal filed a patent for a blockchain-based transaction system to be used when making payments in their platform.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Riot Blockchain comes under fire

Riot Blockchain comes under fire, faces NASDAQ delisting

Riot Blockchain jumped from biotech to blockchain in 2017, which resulted in its stock jumping, as well. Now, the company is being called to the carpet after the U.S. Securities and Exchange Commission (SEC) sent a subpoena, warning Riot that it is facing possible removal from NASDAQ for not adhering to policies.

In a public filing, Riot revealed that the securities regulator wanted to know the amount and classification of the company’s assets. The filing went on to say, “The Company believes that many companies engaged in blockchain and cryptocurrency businesses have received subpoenas from the SEC which presents an additional industry risk. The existence of an investigation of the Company specifically and the industry generally could have a materially adverse effect on the Company, its business or operations, and the industry as a whole.”

Later in the filing, Riot addressed the issue of possibly being delisted from NASDAQ, the tech stock index. Riot mentioned that it had been given a “Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard from NASDAQ.” In order to remain on NASDAQ, companies must conduct an annual shareholders meeting. Riot was supposed to hold the meeting prior to the end of 2017, but failed to comply. NASDAQ has now given the company an extension until May 15, but Riot announced in the filing that it doesn’t believe it will be able to meet the deadline, stating, “There is no assurance that we will be able to garner a quorum for the reconvened meeting. If no shareholders meeting is then held, we will likely be delisted from NASDAQ.”

Riot was previously a diagnostic equipment maker for the biotech industry. When it announced last year that it was getting into blockchain, its stock shot up and more than doubled. Now, as a result of the two announcements, it’s down again. The price fell 5% on Wednesday to $6.91, marking an 85% freefall from the company’s high of $46.20 last December.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.
Bitmain’s crypto mining facility secures land deal in US state

Bitmain’s crypto mining facility secures land deal in US state

China’s cryptocurrency mining giant Bitmain has cleared a hurdle in its bid to establish a mining facility in the state of Washington.

According to a Union Bulletin report, the three commissioners of the Port of Walla Walla have agreed—despite public objection to the idea—to go on with the “land lease and purchase option for 10 acres between the Dodd Road Industrial Park and Wallula Gap Business Park.” The option to buy an additional 30 acres has been taken out from the agreement—for now, at least.

Ant Creek, the name of Bitmain’s data facility in Port Walla Walla, will pay approximately $4,700 monthly in rent.

Director of Operations Jeff Stearns described Ant Creek as “both a blockchain and artificial-intelligence company,” with two different chief executives. Stearns also echoed Bitmain co-founder Jihan Wu’s description of Ant Creek as the “largest manufacturer of cryptocurrency mining equipment in the world.”

Union Bulletin, however, reported that Walla Walla residents didn’t buy the description of the subsidiary company, claiming the focus on blockchain technology rather than cryptocurrency mining was just a way of softening the facts with more neutral language. One of the residents called it “misdirection.”

The residents were concerned about the amount of energy the company would extract from the community, which has the cheapest electricity rates in North America.

Walla Walla resident Robb Lincoln pointed out that unlike other developments,  which employ more people and add value to existing industries, Ant Creek will only “extract electricity and create wealth for the owner with no trickle down.” Another resident Peder Fretheim, told the commissioners the project will only be “used for two things: transactions you want to hide from the law and speculation.” The hearing became intense during the public comment period, and one resident was escorted out.

Though crypto mining companies have been quick to flock to regions with energy surpluses and inexpensive rates, they have been met with resistance from the local residents. States like Washington have announced a moratorium on new crypto mining operations while they evaluate their effects on the community’s power grid.

Peter Swant, president of the commission, said the decision was difficult as the project would not only meet the Port of Walla Walla’s mission of job and tax creation but also provide infrastructure. He also said that he was elected to do what the people would like, and representing the wants of 60 or 70 people that had attended the meeting out of a community of 60,000 residents was going to be difficult.

Note: Tokens in the SegWit chain are referred to as SegWit-Coin BTC (inaccurately called Bitcoin Legacy or Core by many) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.
Brian Kelly: Bitcoin perception is like the Internet in the 80s

Brian Kelly: Bitcoin perception is like the Internet in the 80s, not 90s

Brace for volatility: tomorrow is tax day for the US and cryptocurrencies are given no exemption.

In CNBC’s Fast Money, Brian Kelly, founder and CEO of BKCM LLC, said that the perceptions and conditions blockchain technology is currently in is comparable to the Internet back in the 80s—not the 90s.

“This is like the Internet in the 1980s. I used to think the Internet in the 95, but after the last couple of months talking to folks, I think we’re more like the 1980s. So, you know, I think this technology’s going to work, it’s going to be game-changing, but it’s very early days so we can have this massive volatility,” he said.

Kelly also tackled an impending volatility due to tax liabilities. Earlier this month, Fundstrat Global Advisors head of research Thomas Lee—who was also the former chief equity strategist at JP Morgan Chase, said that the looming tax filing deadline in the US tomorrow (April 17) could cause a massive selloff of cryptocurrencies, adding that the estimate amount owed by US cryptocurrency holders in taxes for their crypto gains is over $25 billion.

“This is a massive outflow from crypto to USD and historical estimates are each $1 of USD outflow is $20-$25 impact on crypto market value,” Lee said.

“Additionally, we believe there is selling pressure by crypto exchanges who are subject to income tax in U.S. jurisdictions,” Lee said. “Many exchanges have net income in 2017 [of more than] $1 billion and keep working capital in [bitcoin]/[ethereum], not USD — hence, to meet these tax liabilities, are selling BTC/ETH.”

Kelly says that the tax deadline could cause a huge drop in cryptocurrency values, but that people have to see how things go after the deadline.

“Presumably after April 17th (deadline for tax liabilities in the US is April 15), if we can hold these gains, we’ll know that tax selling impacted—if you used Tom Lee’s work, we probably had about 500 to 600 billion dollars come off the market for tax purposes,” Kelly said.

He added that the problem with the way people view Bitcoin trading values is that they look at it as if it were a stock when in fact it isn’t.

“This is an open-source software, so you can’t think of it as a company, right? And I think that’s where people make a mistake—they quote market cap and say all that. This is not a stock, it’s not a company. It’s open-source software.”

Talking about negative news and price drops, Kelly says his favourite time to buy any asset is when bad news is dragging its price down. “That’s when I wanna buy any asset—whether it’s Bitcoin or not,” Kelly said.

Note: Tokens in the SegWit chain are referred to as SegWit-Coin BTC (inaccurately called Bitcoin Legacy or Core by many) and SegWit Gold (SWG) and are no longer Bitcoin. Bitcoin Cash (BCH) is the only true Bitcoin as intended by the original Satoshi white paper.  Bitcoin BCH is the only public block chain that offers safe and cheap microtransactions.