Tuesday, November 20, 2018

#104: Crypto winter may finally be upon us

Chain

Letter

Blockchains, cryptocurrencies, and why they matter

11.20: Turning over a new leaf

Welcome to Chain Letter! Great to have you. Here’s what’s new in the world of blockchains and cryptocurrencies. Note: We'll be taking a break this Thursday, but don't worry, Chain Letter will be back next week.

The ICO is probably dead. The US Securities and Exchange Commission sent shockwaves through the cryptocurrency world on Friday with an announcement that it has settled charges against a pair of companies for conducting illegal digital token sales. The two initial coin offering (ICO) projects, called Airfox and Paragon, resemble many others that have occurred during the past two years. That probably means more busts are on their way.

The SEC has already cracked down on a few ICOs, but these charges are the first that did not involve charges of fraud as well. Airfox and Paragon simply failed to register with the SEC before selling their tokens, which the agency says are not exempt from regulations that govern traditional securities investments like stocks and bonds. That’s important, because it appears the agency has developed a template for future prosecutions, writes Stephen Palley, a lawyer at the DC firm Anderson Kill.

The penalties for the two companies are the same: they have to refund investors, pay a $250,000 penalty to the SEC, register their tokens as securities, and submit periodic reports so that the SEC can make sure they are complying with securities law.

All this isn’t really much of a surprise—and is consistent with what the SEC has been saying recently. (see “Like it or not, the future of cryptocurrency will be determined by bureaucrats.”) What this means for the hundreds of other ICOs isn’t yet clear, though Palley tells CoinDesk that the new rulings “would appear to apply to 95% of all the token sales in the last two years.” If you ran an ICO and are wondering if your token is a security, you should probably check with a lawyer, he says. (see “The next generation of ICOs will actually have to follow the rules”)

The Bitcoin Cash hard fork has created a confusing mess. Bitcoin Cash, the cryptocurrency that split away from Bitcoin last year, has effectively gone away. In its place are two new coins which represent the opposing sides of yet another acrimonious (and expensive) split. But at this point there are more questions than answers about what it all means.

To begin with, what to call the two coins? The group advocating for the software implementation called Bitcoin Cash ABC appears to be winning the so-called “hash war,” in which both sides have spent massive amounts of computing power in attempt to wrestle control of the original chain from the other. Does that make it the true Bitcoin Cash? Not so fast, says Craig Wright, one of the front men for the group advocating for a different implementation called Bitcoin Cash SV (for Satoshi’s vision). Wright tweeted that the hash war will “take a few months.”

In the meantime, the cryptocurrency exchanges that had listed Bitcoin Cash seem as confused as the rest of us. Some are listing the new coins as Bitcoin Cash ABC and Bitcoin Cash SV. Others have chosen to reserve the “Bitcoin Cash” label for the ABC version. (Still with me?!) Still others have decided to wait until more of the dust clears.

Meanwhile, the popular exchange Kraken has alerted its customers to a number of “red flags” associated with the SV version. For example, the exchange said in a blog post, there are not yet any wallets for the new coin that support so-called replay protection, a tool that prevents the same transaction from occurring on both blockchains at the same time. Talk about a headache.

If nothing else, the Bitcoin Cash drama has further exposed cryptocurrency as an extremely nascent technology that raises new and rather perplexing questions (How the hell should we react to a hard fork?) for institutions that are interested in adopting it. Stay tuned.

It’s much more than a lecture. It’s a critical conversation.

Join colleagues across industries at our three-day conference to shape the next wave of the digital revolution.

Loose Change

Fill your pockets with these newsy tidbits.

•

Crypto prices keep crashing across the board; yesterday Bitcoin fell below $5,000 for the first time in 18 months (and by 30% in a week). (CoinDesk)

•

Nvidia has blamed the “crypto hangover” due to falling demand for mining chips for missed expectations in Q3 and a lower-than-expected forecast for Q4. (Reuters)

•

US sanctions forced Iran out of the global cross-border payment platform SWIFT. So now its government wants a national cryptocurrency. (Finance Magnates)

•

Chinese crypto-mining chipmaker Canaan has allowed its Hong Kong IPO application to expire, raising doubts about the company’s prospects. (Reuters)

•

Mythical Games, a startup aiming to develop games that run on the EOS blockchain, has exited stealth mode and raised $16 million in venture capital. (TechCrunch)

•

A startup says it has tackled a long-standing problem that has kept smart contracts from responding to events in the outside world. (TR)

The Money Quote

“Technology will change, and so must we. Lest we remain the last leaf on a dead branch, the others having decided to fly with the wind.”

—Christine Lagarde, head of the International Monetary Fund, in a recent speech arguing that governments should seriously consider issuing their own cryptocurrencies or risk ceding their influence over the global financial system. (IMF)

We hope you enjoyed today's tour of what's new in the world of blockchains and cryptocurrencies. Send us some feedback, or follow me @mike_orcutt.

Know someone who might enjoy reading Chain Letter?

Was this forwarded to you, and you'd like to see more?

Blockchain—You've heard the term, now understand the impact.

Business of Blockchain
May 2, MIT Media Lab
Cambridge, MA

View this in a browser

You received this newsletter because you subscribed with the email address: contacto1745.send-mail@blogger.com

edit preferences | unsubscribe | follow us

MIT Technology Review
One Main Street
Cambridge, MA 02142

Breaking Bulls 📉

November 20, 2018

November has Historically been a Bullish Month.. Until this Year

A strong record

Prior to this year, Bitcoin has finished in the green in each of the last seven Novembers. November 2017 was remarkable as it was a part of the famous Bitcoin bull run that brought many people into cryptocurrencies.

During November of last year, Bitcoin started the month around $6,400 and made its way all the way above $11,000. Ultimately, the crypto closed the month just shy of $10,000, but prepared to have an even wilder month in December.

November turns bearish

This year, investors were hoping the holiday season would be a cure to the blues of the bull market of 2018. Instead, their hopes got crushed. Bitcoin opened November 2018 at almost the same spot it did November 2017, around $6,400. But, this time it went the other direction. At the time of this writing, Bitcoin is trading just below $5,000.

As the market normally works, Bitcoin took all of the altcoins down with it. The event caused altcoins to lose a combined ~$20 billion since the start of the calendar month (roughly a 20% decline).

For now, investors are hoping that the rest of the holiday season will be more bullish. December and January of the prior year is when Bitcoin peaked with altcoins pumping shortly after.

INSTITUTION

Israeli Investment Firm Launches Two Cryptocurrency Funds

Continuance of institutional focus

Silver Castle Ltd., an investment firm based in Israel, has launched two new cryptocurrency funds. The firm is backed by some of Israel's high profile bankers and investors. It expects to accumulate $50 million from investors by the end of the year.

One of Silver Castle's funds will deploy an algorithmic trading strategy for the top five cryptocurrencies by market capitalization. The second fund will utilize a similar strategy but will include the top ten cryptocurrencies.

The firm will be heavily targeting institutional investors. This has been a common theme among new funds as institutions have substantial investing power and are looking to enter the market.

Crypto firms on the rise

Silver Castle is not the only firm opening up shop in the cryptocurrency space. According to Autonomous Research, there are now over 370 crypto investment firms worldwide that have a combined $10 billion in assets under management.

Israel loves crypto

Not only is Israel home to a new cryptocurrency investment firm, but the country is also becoming ever more involved in the initial coin offering and startup space. So far this year, 140 Israeli blockchain startups have raised a total of $1.3 billion in investment.

SCAM

Trezor Issues Warning Over Counterfeit Hardware Wallet

Welcome crypto to the exchange

Hardware wallet manufacturer Trezor issued a warning to its users after it uncovered a "startling" problem: one-to-one counterfeits of the Trezor One.

While Trezor has had to fend off clones before, it has never had a clone that came so close to the real thing like this new one.

Here's the issue: Although the wallet may be physically the same, it's software could be faulty or worse, malware.

Telling the difference

Trezor's official blog post covered three rules to protect users from buying fraudulent devices:

Don't buy devices from unapproved resellers.
Check for differences in packaging.
Avoid steeply discounted Trezor wallets.

The process is similar to avoiding counterfeit clothes except that in this case, the consequences include losing your crypto rather than getting a "bargain" on brand name merchandise.

EXCHANGE

OKEx Pushes Back Against Manipulation Claims

Manipulation accusation

Following the Bitcoin Cash hard fork that split the blockchain in two, the world's second-largest cryptocurrency exchange OKEx faced claims of market manipulation after it had allegedly adjusted BCH futures settlements.

According to one report by Medium user AMBER AI, OKEx's fraudulent actions caused traders to lose $24 million. The report also accuses the exchange of trading against its own users.

Pushback

Now, however, OKEx is fighting back in a new statement issued to CoinTelegraph:

"These are completely false allegations and the defamatory statements have caused serious damages to OKEx's reputation."

The exchange also added that it will consider pursuing legal action against AMBER AI for "interfering" with its business.

Meanwhile, BCH itself has had a rough week as it is down over 50% in value after its controversial split.

BITS

But wait, there's more...

IBM and Columbia University have partnered to launch two accelerator programs for blockchain startups.
North Dakota's securities watchdog is cracking down on a Russian initial coin offering (ICO) that was allegedly impersonating a Liechtenstein-based bank.
The governor of the Bank of Thailand (BoT) has said that it will take three to five years for countries to switch from using cash to using digital currencies.

MEME

SHARE UNBANKD

If you ❤️ Unbankd, share us with your friends to help them get crypto smart too!

So far you have 0 referrals but we still have more rewards for you.

INVITE FRIENDS

Or copy & paste your unique link to share:
https://unbankd.co/?ref=192f87b56d

SUBSCRIBE	FEEDBACK	ADVERTISE

CryptoWeekly #83

CRYPTO WEEKLY
November 20, 2018 | #83

THE MARKETS

BTC: $5,535.00 | -$791.77 (-12.51%) since last week
ETH: $176.23 | -$31.88 (-15.34%) since last week

SPONSOR

DSX - Your professional cryptocurrency exchange
From crypto to FIAT, trade with confidence on DSX - the FCA regulated London exchange. A variety of deposit and withdrawal options are available at the touch of a button.

GOOD READS

KPMG's first official report on crypto-assets is a must-read
In the 42-page report, the accounting giant has concluded that crypto-assets are now impossible for the financial services industry to ignore, but that key challenges to institutionalization (such as regulatory compliance and custody) still remain.

Here's why crypto fund managers are going to be in trouble next year
After a year of massive net decreases for most crypto funds, it seems likely that many will be forced to shut down next year due to not meeting the key high water marks required for receiving performance fees.

The Bitcoin Cash battle is costing billions - with no end in sight
After an enormous clash erupted last week over the future of Bitcoin Cash, investors are feeling the hurt. With more than $3B wiped off BCH's market cap in the past week alone, analysts are warning both sides to reconcile and avoid running up more losses due to excessive computing costs.

Meet these seven big tech staffers that went full crypto (and love it)
This is a great profile of several individuals who pivoted their careers at some of the biggest tech companies into the crypto space - and have experienced exponential learning and career growth as a result.

Europe's central bank has dubbed Bitcoin 'the evil spawn of the financial crisis'
In its strongest statement yet on crypto the European Central Bank announced in a speech last week that it's taking an anti-Bitcoin stance for the time being, declaring the cryptocurrency to be the undesirable byproduct of the 2008 financial crisis.

Forget robots - blockchain technology might be taking over our jobs first
The combination of automation and smart contracts is a powerful one, and many researchers that emerging technologies that leverage blockchain (such as HUMAN Protocol) could even replace white-collar jobs in the near future.

Here's why stablecoins are the crypto sector's next big bet
Stablecoins combine the low volatility of fiat currencies with many of the security advantages of digital currencies, making them an attractive option for those looking to conduct international payments or have more predictable investment returns.

Check out this efficient algorithm to exploit arbitrage opportunities in crypto
This report from CoinFabrik outlines how mathematical algorithms can be implemented to identify (and capitalize on) arbitrage opportunities in the crypto markets, in a technique called "statistical arbitrage".

Here's how to find the best token for doing international money transfers
For all the development that's taken place on Bitcoin over the past decade, it still isn't ideal for transferring money abroad. This fascinating guide outlines which token is best to use, given the purpose of one's international transfers.

COMMUNITY NEWS

The world's first crypto ETP just got green-lighted in Switzerland. Link
One of the largest crypto exchanges in the world now has a Communist Party branch in China. Link
Here's how Sweetgreen is using blockchain to improve its supply chain. Link
Blockchain gaming startup Blockade Games is now valued at $13M after its latest funding round. Link
Join Beyond Blocks in Bangkok next week. Use promo code 'CryptoWeekly30' to access 30% off. Link
Nvidia's Q3 results reveal a "crypto hangover" from slowing miner sales. Link
Non-genuine Trezor One devices spotted. Here's how to spot a fake one. Link
Mining startup Bitfarms has just filed for an IPO in Canada. Link
Coinbase is adding support for Ripple's XRP to its custodial services. Link
IBM and Columbia University have just launched a blockchain accelerator program. Link
Circle is hiring a Data Analyst in San Francisco. Link

Edited by Chris Osborne, founder of KintuLabs, in Bangkok (in town? reach out to get a coffee). Feel free to reply to this email with any feedback and/or suggestions.

--

Nothing shared or published by CryptoWeekly constitutes an investment recommendation, nor should any data or content published by CryptoWeekly be relied upon for any investment activities. CryptoWeekly strongly recommends that you perform your own independent research and/or speak with a qualified investment professional before making any financial decisions.

Copyright © 2018 CryptoWeekly. All rights reserved. No longer want to receive CryptoWeekly? Unsubscribe.

COIN	PRICE	24H

BTC	$4,625.47	- 10.74%

XRP	$0.459866	- 4.87%

ETH	$136.86	- 11.79%

BCH	$245.29	- 30.42%

XLM	$0.205366	- 10.12%