| FAKE DUDES: BHB, a crypto project based in China, raised $20 million through a rewards-based marketing scheme, promising token holders dividends (in the form of tether stablecoins) and extra perks if they signed up others. But signs have emerged that something is amiss.
An investigation by CoinDesk's Wolfie Zhao found that of the three team members touted on the project's website, at least two were totally fake, their photos lifted from real-life professors who publicly deny any involvement with BHB.
And that's not the half of it. From the project's similarity to multi-level marketing and pyramid schemes (the latter of which is illegal in China) to a member gala with lucky draws for luxury cars, this story from the Far East is straight-up Wild West. Full story
FIDELITY ON BOARD: Blockchain analytics startup Coin Metrics has closed a $1.9 million seed round with Fidelity Investments, Highland Capital Partners and Dragonfly Capital. Announced today, the startup also released its first suite of commercial products for institutions seeking customized research reports.
Coin Metrics co-founder and board chairman Nic Carter told CoinDesk that institutional investors aren’t satisfied with the current crop of price aggregation services that don’t distinguish the integrity of different data sets.
“One thing we’re looking at is building out whitelists of exchanges so that the market reference rates are actually based on credible exchanges, as opposed to exchanges that engage in wash trading and other types of nonsense,” Carter said.
Coin Metrics also analyzes blockchain data with a methodology that aims to help traders cut through the noise, as Carter put it. For example, purchasing bitcoin on an exchange platform might lead to hops across wallets in the platform’s back-end storage. Failing to account for such patterns could artificially inflate transaction data.
“Not all of this is meaningful and economic, only a fraction of this is,” Carter said of the importance of correctly mapping patterns of activity on the blockchain. Full story
COMPLIANT TOKENS: Token platform Polymath says its tests have shown how security tokens can be traded on a decentralized exchange without violating regulations.
Revealing the news exclusively to CoinDesk on Wednesday, Polymath said that the “successful” test trades – which used smart contracts on Loopring’s DEX protocol – demonstrated that only authorized trades of security tokens based on its ST-20 standard were able to execute, while unauthorized trades could not.
Detailing how it works, Polymath said that every time a trade is attempted, the token calls its transfer manager module and effectively asks, “Can this trade be executed?” The transfer manager then checks a whitelist (controlled by the token issuer) to see if the buyer and the seller are allowed to trade the token. Only if the answer is yes is the trade executed.
Polymath vice president for marketing Graeme Moore told CoinDesk that the two firms carried out the tests to demonstrate that security tokens can be traded in a compliant manner, even on decentralized exchanges. Full story
TURBULENCE AHEAD: Ether price volatility could spike in the days ahead, courtesy of an upcoming ethereum upgrade scheduled for Thursday.
The Constantinople hard fork, a planned two-part upgrade to the world’s second-largest cryptocurrency, is scheduled to occur once block 7,280,000 on the ethereum blockchain is mined. At the time of writing, ether’s block height is 7,272,826, meaning the fork should occur in the next 24 to 48 hours, given that roughly 4,200 blocks have been mined per day for the past two weeks.
However, the change could draw the interest of more than just developers and users, as historical data shows ether price volatility tends to spike hours before a software upgrade.
For instance, ether price volatility picked up with the Byzantium hard fork release on Oct. 16, 2017, with the resulting uncertainty prompting traders to sell ETH and unwind their long positions leading to a 20 percent price slide. Full story
THREE IN ONE: Capital markets blockchain startup Nivaura has raised a total of $20 million with the closing of its second seed extension round led by the London Stock Exchange Group (LSEG).
Announced today, other investors in the latest round include Santander InnoVentures, Transamerica Ventures, Digital Currency Group and more.
Nivaura closed the original seed round in October 2017 and the first extension round in January 2018. The firm did not provide a breakdown of the three rounds but said the latest was “significantly larger than the preceding two.” The proceeds will be used to increase headcount “significantly across all areas” (including hires in machine learning and natural language processing), to expand into the U.S. and Asia, and invest in further R&D, the firm said.
The company’s big idea is providing platforms to automate the entire life cycle for the issuance of financial instruments – bonds, equities, derivatives – and leveraging public blockchains for registration and settlement so that humans don’t need to touch anything and a corporate can do a self-service issuance.
Nivaura CEO Dr. Avtar Sehra said that this year, Nivaura plans “a series of high-profile, large-scale projects with high-caliber partners to demonstrate our platform as a valuable solution across the full spectrum of capital markets primary issuance activities.” Full story | 
