BitMEX launches defense 🛡 / China bans yuan stablecoins 🇨🇳 / Bloomberg / Epik's Masterbucks 👎

BitMEX's lawyers have launched their defense. Several BitMEX co-founders remain charged criminals at large...

Inside.com Part of   Network October 27, 2020

Market Watch Bitcoin $13,627 7 day: +13.7% Ethereum $406 7 day: +9.8% All crypto $405b 7 day: +11% Bitcoin dominance 62.2% 7 day: +1.6% Prices as of 3 p.m. EDT

BitMEX's lawyers have launched their defense. We have covered the indictment at Inside Cryptocurrency here, here, here, here, and here. Several BitMEX co-founders remain charged criminals at large. In today's edition of Inside Cryptocurrency Premium, we look into the legal defense of BitMEX against one of the largest indictments and lawsuits in cryptocurrency history. Several co-founders of BitMEX are still at large. Join Inside Cryptocurrency Premium for a free ($0!) 14-day trial subscription. We sincerely appreciate your support of independent research. FREE TRIAL

China's central bank has drafted legislation that would prohibit competitive, yuan-pegged stablecoins. A note on terminology: China's fiat is known internationally by three interchangeable names: renminbi (RMB), Chinese yen (CNY), and yuan (¥). China's central bank digital currency (CBDC) is known as Digital Currency/Electronic Payment (DC/EP). The People's Bank of China (PBoC) published a draft law that would ban any digital asset pegged to RMB except its own CBDC: DC/EP. The 20-page proposed draft published on Oct. 23 would ensure that China's state directly benefited from international liquidity derived from a digital yuan. Tether already operates a Chinese yen-pegged stablecoin, CNY Tether (CNYT). Article 19 of the draft makes it lawful to establish a CBDC (i.e. DC/EP) as legal tender. China's lawmakers aim for a wider release of DC/EP during the Beijing Winter Olympics of 2022. Section 3 of Article 22 cites that no individual or company will be allowed to develop, distribute, and sell digital tokens that could replace renminbi in circulation within the market. The proposal also hints at large fines and civil penalties levied on individuals who sell or distribute yuan-backed virtual currencies illegally. China's central bank is continuously progressing to make DC/EP a success. Deputy governor Fan Yi Fei said at the Sibos banking and financial conference on Oct. 5 that the PBoC processed 3.13 million transactions during DC/EP's pilot to date, totaling 1.1b yuan (worth about $162m). The PBoC issued approximately 10m yuan (roughly $1.5m) to hold a public lottery in Shenzhen, allowing 50,000 residents to receive the DC/EP digital tokens as a reward for participation. Despite the giveaway, Reuters reports show that PBoC received an underwhelming response from citizens who are more accustomed to Alipay and WeChat Pay. Forbes

Bloomberg reviews the state of institutional cryptocurrency adoption. Bloomberg noted bitcoin's rally to $13,000 caused by PayPal's recent acceptance. Paypal will allow cryptocurrency transactions for 346m users worldwide. After PayPal's announcement, bitcoin's market capitalization increased $20b within two days. Bloomberg clarifies that PayPal will not allow on-chain cryptocurrency transactions between two PayPal accounts, based on current information. The article also mentions that crypto-friendly institutional companies such as Fidelity Investments, which has crypto investment products, and public companies like MicroStrategy and Square Inc., have recently purchased bitcoin. Bloomberg quotes Meltem Demirors, chief strategy officer at CoinShares, saying that PayPal's recent acceptance of bitcoin is good for public relations, yet it does not hold much value for institutional investors. The article cites Darrig Peller, a managing director at Wolfe Research, who says that PayPal's new endeavor aims to drive large-scale engagement and revenue by offering the same features as Robinhood and Square. Peller also cautions readers about bitcoin's volatility. Bloomberg

PayPal (NASDAQ: PYPL) has terminated services to Epik, a domain registrar connected to Masterbucks. Join us at Inside Cryptocurrency Premium to learn about this domain registrar's connection to white nationalism and cryptocurrencies. We offer a free ($0!) 14-day trial to Inside Cryptocurrency Premium. FREE TRIAL

U.S. authorities continue to prosecute an Ethereum developer who attended a conference in North Korea despite being denied permission by the U.S. State Department.  An ex-hacker and former Ethereum Foundation team member, Virgil Griffith, requested a New York federal judge to dismiss an indictment that was filed on Jan. 4. The indictment alleges that Griffith broke U.S. laws during his visit to North Korea by speaking on ways to counter U.S. sanctions using cryptocurrencies. Virgil attended the Pyongyang Blockchain and Cryptocurrency Conference in North Korea in April, and according to the prosecutors, he tried to help North Korea during that visit. In November, the Ethereum developer was arrested at Los Angeles International Airport.  Griffith's motion to dismiss, submitted in the United States District Court Southern District of New York, mentions that the indictment filed against him is short, unclear, and lacks several amended specifics that do not provide any substantive facts. Prosecutors accuse Griffith of sharing technical information to assist North Korea's money laundering and legal evasions. The prosecutor's complaint against Griffith also cites a conversation regarding the transfer of cryptocurrencies between North and South Korea, which Griffith deemed an act of violation of U.S. sanctions. Coindesk

Galaxy Digital's Mike Novogratz continues advertising bitcoin. Novogratz appeared on CNBC and Bloomberg TV last week. During an interview with Bloomberg TV and Radio, Novogratz focused on bitcoin's usage as a transactional currency within the next five years. Novogratz noted that substantially all of the world's major central banks are looking to design CBDCs, and China has already started testing its digital yuan, DC/EP. Novogratz promotes bitcoin as digital gold. Gold itself will also, according to Novogratz, continue its price rally. Bitcoin rallied beyond $13,000 on Oct. 21 immediately after PayPal (NASDAQ:PYPL) announced that it would allow its customers access to use cryptocurrencies. Novogratz believes that companies like E*Trade, Visa, Mastercard, and American Express will soon offer platforms where merchants can complete their transactions using stablecoins and cryptocurrencies. Novogratz concluded, "It's not if, it's when, and so every single company has to have a plan now." Bloomberg

Agustin Carstens, BIS General Manager The Bank for International Settlements (BIS) is planning for a central bank digital currency (CBDC) trial in collaboration with Switzerland's central bank. Join Inside Cryptocurrency Premium with a free trial to enjoy all of our content and support independent research. We appreciate your support! UNLOCK

QUICK HITS At the Shanghai Bund Summit on Oct. 24, Alibaba Group co-founder and billionaire Jack Ma spoke on cryptocurrency regulations. Ma pointed out the shortcomings in global financial regulations and requested Chinese authorities for more accommodating regulations. Ma said China still requires more innovation to encourage a healthy cryptocurrency ecosystem. Cryptocurrency hardware wallet company Ledger encountered a security breach on Oct. 24. Several of the wallet provider's customers received phishing emails. The Ledger team has created an "internal task force" to investigate the phishing scam. An IT arm of Toyota is piloting a digital token that uses Toyota's brand name. Toyota's IT arm is partnering with DeCurrent, a crypto exchange to develop a digital currency pilot involving up to 2,500 employees. BlockFi holds over 5% of Grayscale Bitcoin Trust (OTCQX:GBTC). Learn how to revamp your remote work strategy in this webinar: How to Build a Better Remote Work Experience With Less Software.* *This is a sponsored post.

Written and curated by wide-eyed bitcoin watcher since $1, Aaron Wise. Streaming headline junkie, Associated Press fanboy, eye-strained news terminal watcher, 2017 founder of Cryptocurrency Newsfeed. Temporarily based in Florida while awaiting the construction of cryptopia.  Editor Written and curated by Eduardo Garcia in New York. Eduardo is writing an illustrated book about climate change that will be published by Ten Speed Press, an imprint of Penguin Random House. Bylines in The New York Times, The Guardian, Slate, Scientific American, and others. In one of his previous lives, Eduardo worked as a Reuters correspondent in Latin America for nearly a decade.

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JPM Coin Is Live as Bitcoin Rallies

PLUS: DEXs surge, Bitcoin bail funds and more

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October 27, 2020 Sponsored by By Daniel Kuhn If you were forwarded this newsletter and would like to receive it, sign up here.  Top shelf JPM Coin will see its first commercial use, banking executives said. Southeast Asia's largest bank by assets, DBS, is eyeing a digital assets exchange. And bitcoin’s recent rise shows a decoupling from traditional markets, like the S&P 500. JPM Coin JPM Coin, the enterprise-minded digital asset stewarded by the titular global bank, will see its first transaction this week,  a JPMorgan executive said. Designed for wholesale and payments and faster transactions, the system is predicted to save the banking industry hundreds of millions of dollars a year. First revealed in February 2019, JPM Coin will run on Quorum, a private version of Ethereum developed by the bank but acquired by development firm ConsenSys in August. Further, the executive told CNBC the bank has created a business unit with around 100 employees called Onyx to house related projects. “We believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business,” the executive said.  Bank’s exchange Southeast Asia's largest bank by assets, DBS, is apparently in the works to build a digital assets trading platform. The Singapore-based bank and financial services corporation posted – and quickly removed – a webpage detailing the DBS Digital Exchange that will offer access to "an integrated ecosystem of solutions to tap the vast potential of private markets and digital currencies." In addition to bitcoin, bitcoin cash, ether and XRP trading services, the exchange will also offer tokenization services, offering business the opportunity to raise funds by issuing digital forms of securities and assets, per the page. The exchange will be regulated by the Monetary Authority of Singapore, the city-state's de facto central bank. BTC funds bail A growing number of donors are giving crypto to bail funds, CoinDesk’s Ben Powers reports. Bail fund projects have taken in thousands of dollars in crypto donations – including major assets like BTC and ETH, as well as smaller market cap coins like BAT – since the summer, according to The Giving Block. Potential benefits include helping bail funds diversify payments streams, attract younger tech-savvy and international donors as well as tax benefits. “We expect that more people will embrace crypto as their preferred method of making donations – especially as people understand the tax benefits of giving via crypto, which are similar to those of donating conventional securities,” The Bail Project’s Chief Financial Officer Zach Herz-Roiphe said. Volume surge Automated market makers Curve and Uniswap traded combined volumes above $4 billion on Monday, perhaps in reaction to a recent exploit of popular DeFi protocol Harvest Finance. Daily trading volume on Uniswap lept 1,200% to a record $2.04 billion, surpassing the previous record high notched shy of $1 billion, while decentralized exchange Curve Finance saw volumes above $2 billion. This weekend, an attacker used a flash loan – a technique that allows a trader to take on massive leverage without any downside – draining some $24 million from Harvest and triggering a bank run. "Volume on Uniswap surged, as the Harvest Finance exploiter likely ran money through the automated market maker," Denis Vinokourov, head of the research at the London-based prime brokerage Bequant, told CoinDesk in a Telegram chat. Powell pontificates  Jesse Powell, crypto OG and Kraken CEO, has criticized the decentralized finance (DeFi) space, in light of several recent multimillion-dollar exploits, not the least of which affected Harvest Finance yesterday. In a tweet on Tuesday, Powell said he would “not accept” DeFi projects’ attempts at “externalizing the cost” of “hasty reckless” rollouts. In an expletive-laden tweet he admonished these breakneck coders for rushing out unaudited and uninsured projects. Despite this, CoinDesk’s Sebastian Sinclair notes, the DeFi sector is continuing to grow, having surpassed $12.45 billion in total value locked up in smart contracts on Oct. 25. (That figure dropped by about $1.15 billion after Monday’s exploit of Harvest, and now stands at $11.3 billion, according to DeFi Pulse.) SPONSORED BY FLIPSIDE CRYPTO Bitcoin is now part of the Flipside Data Cooperative - a transparency initiative that provides public and shareable views of networks’ on-chain activity in real time. Flipside Crypto transformed Bitcoin’s blockchain data by labeling every stakeholder and transaction that has ever taken place on the network. The labeled data now powers public interactive dashboards, so anyone can watch where whales and other users are sending their BTC. Learn more about Flipside Crypto. Quick bites Why Wyoming’s Governor Supports the State’s Crypto Banking Law (CoinDesk) Toyota’s IT arm launches digital currency pilot (The Block) Audius Distributes Crypto to RAC, Deadmau5 Listeners (Decrypt) There are already counterfeit wallets of China’s digital yuan (Quartz - paywall) Alibaba’s Jack Ma says switch to a digital currency (Modern Consensus) Most Influential 2020: Cast Your Vote Every year, CoinDesk recognizes the “Most Influential” people working to expand cryptocurrency and blockchain’s reach. It’s a list of the 10 outsized individuals who have gone the furthest and done the most. In this most unusual year, we need your help determining who should be named as Most Influential. Check out the list of the top contenders and cast your vote by Oct. 31. At stake The indicators Bitcoin is rallying, and on-chain and off-chain indicators point to a continuing trend. CoinDesk markets reporter Omkar Godbole placed bitcoin’s new yearly watermark in the context of declining daily deposits to cryptocurrency exchanges as well as a movement of coins off exchanges.  According to Glassnode, the number of daily deposits to exchanges fell to a nine-month low of 26,889 on Monday as the total number of bitcoins held on exchanges slipped to a two-year low of 2,478,799 BTC. These statistics, while imperfect, have traditionally pointed to a market sentiment where traders and investors are prepared to “hodl” into a rally, Godbole noted.  A similar sentiment can be gauged by looking at futures markets, where contracts give the option for buyers to strike a buy at a predetermined price by a predetermined date. According to Godbole’s analysis, one-, three- and six-month put-call skews, which measure the cost of bearing to bullish bets are hovering near zero, an indication that some traders expect for bitcoin’s price to continue rising.  Last week, Bloomberg analysts put out a quarterly report on predictive crypto performance, targeting a $100,000 BTC price level for 2025 and a high of $14,000 as early as this year.  “Still in hangover mode from the 2017 rally, we don't know what specific catalyst might launch Bitcoin to new highs, but demand vs. supply metrics remain price-positive,” the analysts write in “Bitcoin Trend, Adding Zeros.” Among the macro factors they point to is bitcoin’s decreasing volatility compared to the Nasdaq composite, a growing correlation with gold and a likely growing market cap, in part spurred by corporate investment (like MicroStrategy and Square’s) in the cryptocurrency. “In an unparalleled macroeconomic backdrop of rapidly increasing fiscal and monetary stimulus, limited supply stores of value such as gold and Bitcoin stand to prevail, in our view. This should be true when traditional asset classes – stocks and bonds – are overextended,” the report reads.  A separate report by CoinDesk’s sister company Grayscale has found that more than half (55%) of U.S. investors who responded are interested in buying bitcoin (BTC) in 2020. That’s up from 19% from survey responses last year. For the short term? "The next resistance to take out is $13,800 (June 2019 high),” Patrick Heusser, a senior cryptocurrency trader at Zurich-based Crypto Broker AG told Godbole.  Crypto state With the U.S. Election Day next week, much is at stake - including crypto policy over the next four years.   Like it or not, this election will matter for the crypto industry. Our latest limited-run newsletter, The State of Crypto: Election 2020 by regulatory reporter Nikhilesh De, aims to walk you through why. At stake: Will new crypto products be approved or allowed to operate in the U.S.? Will regulators target more overseas exchanges and platforms like BitMEX? Will the U.S. launch a “digital dollar” or some other form of central bank digital currency? These questions will come down to who takes the reins at the various financial regulators and government departments. Over the next several days, we map out the possible outcomes and introduce analysis of the candidates.  Our limited-run newsletter runs Mondays, Wednesdays and Fridays at least until Election Day. Subscribe to The State of Crypto: Election 2020. Market intel Decoupling? Bitcoin (BTC) is riding at 16-month highs,  trading around $13,420 at press time. The cryptocurrency is now up 25% for the month and 87% on a year-to-date basis, CoinDesk’s Omkar Godbole reports. This comes as coronavirus scares and intermittent U.S. stimulus talks have spooked traditional markets, seen by the S&P 500’s 2% drop yesterday. “In effect, we appear to be seeing a weakening of the positive correlation between bitcoin and the S&P 500 seen since the March crash,” Godbole said. Matthew Dibb, COO of Stack Funds, agreed: "The decline in transfers to exchanges despite risk-off in equity markets is a bullish sign.”  Who won #CryptoTwitter? ATTENTION: Scammers have been sending fraudulent emails with links to sites disguised to look like coindesk.com. If you are in doubt about a link, type https://www.coindesk.com directly into your browser; do not copy and paste. Remember, if something seems too good to be true, it probably is. Blockchain Bites A newsletter from CoinDesk See previous editions Copyright © 2020 CoinDesk, All rights reserved.  Our mailing address is:  250 Park Avenue South New York, NY, 10003, US  Want to change how you receive these emails? You can update your preferences here.

Hyperledger Explains Peer-to-Peer Financial Transactions

Learn how to get past the roadblocks of peer-to-peer financial transactions with Hyperledger. Watch live today!

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A Note to Our Live Attendees: We apologize for the error that occurred during the live webinar experience. We always strive to provide the best attendee and sponsor experience possible. Please enjoy access to the live recording here.   Whether you are eyeing retail or wholesale CBDC opportunities or are looking at digital wallets loyalty programs or other implementations of token-based transactions, you’ve no doubt realized the technology infrastructure is just one part of the puzzle. Learn how to get past the roadblocks of  peer-to-peer transactions with Hyperledger in this free webinar: Governance, Standards and Interoperability: Getting Past the Roadblocks to Peer-to-Peer Financial Transactions.   It’s well documented that distributed ledger technologies can deliver on the mechanics of peer-to-peer transactions. The roadblocks are creating an ecosystem with a level of transparency and security that consumers, regulators and companies trust. The closer you move to central banks and fiat currencies, the higher the barriers to buying in and deployment.   WATCH ON DEMAND This discussion  features experts on three different Hyperledger DLT platforms as they  compare notes about current and future token-based solutions from around the world. The conversations also cover: The role standards and governance must play to successfully implement peer-to-peer financing applications and networks The core requirements for blockchain frameworks powering them The growing need for interoperability to support increasingly complex use cases WEBINAR SPEAKERS Nitin Gaur |  Director, IBM Financial Sciences and Digital Assets, IBM Research Makoto Takemiya | CEO and co-founder, Soramitsu Grace Hartley | Strategy & Operations, ConsenSys MODERATED BY Nathaniel Whittemore | Host, The Breakdown WATCH ON DEMAND This email was sent by: CoinDesk   250 Park Avenue South New York, NY, 10003, US   Want to change how you receive these emails? update your preferences or unsubscribe from this list