Wednesday, November 21, 2018

Manipulation Accusation 😲

November 21, 2018

US Department of Justice Opens Probe into Tether

Investigation into manipulation

The US Department of Justice (DOJ) has opened an investigation into Tether to determine if the stablecoin issuer has engaged in manipulating the price of Bitcoin.

According to the report from Bloomberg, the DOJ has already had an ongoing investigation into the cryptocurrency market but has narrowed its focus to Tether and Bitfinex. For reference, Bitfinex is managed by the same company as Tether.

The DOJ is concerned that Tether and Bitfinex have fraudulently propped up the price of Bitcoin using their stablecoin.

Writing on the wall

In June, a research team at the University of Texas concluded that the stablecoin Tether (USDT) was instrumental in driving the price of Bitcoin to $20,000 in late 2017. The research team concluded that "purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices". In addition, Tether has been accused of not having enough reserves to back their $2.76 billion outstanding tokens.

Tether has repeatedly refuted the claims brought against them. It has shown bank documents proving their reserves, but some are still wary about the integrity of the stablecoin issuer.

Adding insult to injury

Bitcoin has already been beat up enough over the past week. If the DOJ finds that Tether artificially inflated the price of Bitcoin, many investors could lose faith in the integrity of the market.

Looking to institutions and exchange-traded fund (ETF) approval, if the DOJ finds that Bitcoin trading is a manipulated market, it will not look good for the young asset class as that was one of the main reasons for the first set of ETF rejections.

PREDICTION

Tom Lee Doubles Down on His $15,000 End of Year Prediction

Background on this bull

Tom Lee is a is a Managing Partner and the Head of Research at Fundstrat Global Advisors with over 25 years of experience in equity research. Lee is an esteemed institutional investor and has been top-ranked by Institutional Investor every year since 1998.

Bull stays bullish

With just about a month left in 2018, Tom Lee is reiterating his price target of $15,000 for Bitcoin by the end of the year. Lee's prediction assumes a more than 3x move for the king of crypto in just about a month.

He recently changed his year-end target from $25,0000 to $15,000 but has stood his ground at that mark even as Bitcoin has fallen from around $6,000 into the lower $4,000s in just a few days.

Here is his reasoning

Lee explains that Bitcoin has dropped in value for the same reason some of the large tech stocks are slumping, "markets have seen a liquidity dry up". He compares Bitcoin to a high growth stock and the equity market has seen a shift in preference from growth to value.

Just like most investors, Lee is betting on institutions entering the crypto market. Another reason Lee is so bullish is the anticipation of regulatory clarity. He believes once the government embraces cryptocurrencies the market will rebound. Lee is betting on a lot to happen in just a month.

Here is what the investor had to say about institutions:

"The next wave of adoption is institutional. There is a crossover happening. This is just an awkward transition. Institutional backing will come soon. You will get it partly through infrastructure, like Bakkt, which is launching soon."

INSTITUTION

Bakkt Delays Bitcoin Futures Launch to January

Pushed to January

According to an official announcement, Bakkt is delaying the launch of Bitcoin futures trading until late January.

Previously, eyes were set on December 12th for launch. Now, Bakkt CEO Kelly Loeffler says that "volume of interest" and the "work required to get all the pieces in place" are the main reasons for the later launch date.

In addition, Loeffler adds that the new launch date is "subject to regulatory approval" - possibly indicating that Bakkt has yet to receive such approval.

New teases

Outside of the launch date change, Loeffler's announcement also included new features and hinted that there may be more to come.

Previously the trading platform had its eyes set only on physically settled Bitcoin futures. This is a new concept in which traders receive actual Bitcoin instead of the cash equivalent like existing Bitcoin future exchanges.

Yesterday, however, Loeffler added that Bakkt has received insurance for the Bitcoins in cold storage and are currently working on securing insurance for the warm wallet within the Bakkt Warehouse architecture.

With the new launch date, it gives Bakkt some extra breathing room to continue building the much-hyped platform.

HACK

Hackers Target Make-A-Wish Foundation for Cryptojacking

CoinImp infection

According to a new report from cybersecurity firm Trustwave, the website of Make-A-Wish Foundation was infected with a popular cryptojacking script called CoinImp.

Though it's unknown how hackers managed to add the script to the website's code, Trustwave found that the script was working and was using the computing power of visitors to mine Monero (XMR).

Since Monero is a privacy-focused cryptocurrency and easy to mine on a simple computer, it is usually the coin of choice for cryptojackers.

Under the radar

Allegedly, this case was interesting because the hacker employed a handful of techniques to avoid detection. It is still unknown how long the malicious code was up for.

After Trustwave made the discovery, the company immediately contacted Make-A-Wish to get the code removed. Shortly after, without a response from the non-profit, the code was removed from the website.

BITS

But wait, there's more...

Authorities in the U.S. state of California have arrested a 21-year old New Yorker for the alleged theft of $1 million in crypto using "SIM-swapping."
The Colorado Division of Securities has issued another batch of cease-and-desist orders against allegedly fraudulent initial coin offerings (ICOs).
U.S.-based bitcoin mining firm Giga Watt has declared bankruptcy with millions still owed to creditors.

MEME