85 Percent of Developers Can Alter Their Cryptoassets’ Protocol, Research Shows

CryptoCompare’s yearly report indicates a tendency to centralize crypto assets, as 85 percent of their developers can change protocols at any time.

Cryptocurrency tracking resource CryptoCompare’s recent study has shown that 85 percent of crypto assets allow development teams to alter their platforms. The report was published Wednesday, Oct. 17, on CryptoCompare’s website.

To create the report, CryptoCompare reviewed hundreds of crypto and blockchain projects, with experts detecting a tendency towards centralization set by utility tokens that are running on controlled servers.

According to the research, as many as 85 percent of developers can change the protocol on their projects at any moment at their own discretion.

Source: CryptoCompare

The yearly taxonomy of cryptocurrencies also revealed that 55 percent of existing crypto assets are actually centralized, while 30 percent more are semi-decentralized. As a conclusion, only 16% of all existing crypto assets are considered to be a fully decentralized ecosystem. However, CryptoCompare’s total amount equals 101 percent instead of 100 percent, which might indicate a reporting error.

The situation is slightly less decentralized with tokens utilized as a method of payment. As per the report, almost 41 percent of them are centralized, while another 22 percent are centralized to some extent.

CryptoCompare’s study also reveals that most cryptocurrencies can technically be classified securities. To prove this point, they apply to the guidelines established by the Swiss Financial Market Supervisory Authority (FINMA).

Following FINMA’s guidelines, Bitcoin (BTC) and Ethereum (ETH) are not securities due to the lack of an identifiable common enterprise and a high level of decentralization. However, 55 percent of crypto assets could be treated as securities and fall under existing regulation, CryptoCompare states.

As Cointelegraph previously wrote, Canadian mass media and information company Thomson Reuters — which owns major international news agency Reuters — has recently partnered with CryptoCompare. The resource will provide trade data on 50 cryptocurrencies for Reuters’ financial desktop platform, Eikon, which was developed for institutional investors.

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Coinbase Launches First ERC-20 Token on Platform

Crypto exchange Coinbase has launched the 0x token on Coinbase Pro, it will be the first ERC-20 token supported on the platform.

Leading U.S. cryptocurrency exchange Coinbase has started listing 0x (ZRX) token, according to an announcement published Oct. 11. The move marks the first time Coinbase has added support for an ERC-20 token.

ERC-20 tokens are tokens developed and used solely on the Ethereum (ETH) platform, where ERC stands for Ethereum Request for Comment, and 20 is the number assigned to this request. ERC-20 makes the creation of new tokens extremely easy, which is why ETH became popular with crowdfunding companies working on Initial Coin Offerings (ICOs).

Per the announcement, Coinbase has launched support for ZRX on its professional platform, Coinbase Pro, although trading will only be allowed once sufficient liquidity is established. The exchange notes that a separate announcement will be made when the token becomes available on coinbase.com and on its iOS and Android apps.

ZRX trading will be available in most jurisdictions, except the state of New York during its initial launch stage. Coinbase has divided the launch into four independent stages for each new trading pair; ZRX/USD, ZRX/EUR and ZRX/BTC, while the exchange notes that currently it will not offer trading on the ZRX/GBP pair.

As Coinbase states in the blog post, in the first, “transfer-only” stage, customers will be able to transfer ZRX into their Coinbase Pro accounts, without an option to place orders. The second “post-only” stage will let customers post limit orders, however with no matches. The subsequent stages — “limit-only” and “full-trading” — will enable matching limit orders and full trading services, including limit, market, and stop orders respectively.

In July, Coinbase announced its was considering adding five new assets — Cardano (ADA), Basic Attention Token (BAT), Stellar Lumens (XLM), Zcash (ZEC), and ZRX — to its trading list. The trading platform noted then that the new assets “will require additional exploratory work,” also warning that the listing process may make some coins available for customers to buy and sell only, without the ability to send or receive them using a local wallet.

Coinbase revealed its intention to add support for ERC-20 tokens in March, reversing previous statements from January. “After evaluating factors such as liquidity, price stability, and other market health metrics, we may choose to add any ERC-20 asset added to GDAX to the Coinbase platform,” the platform asserted.

At press time, ZRX is trading at around $0.76, up by 5.42 percent on the day, according to CoinMarketCap. On its weekly chart, the cryptocurrency price surged from $0.62 on Oct. 6 to $0.86 today following the Coinbase announcement. ZRX’s market capitalization is around $407 million, while its daily trading volume is around $67 million, at press time.

0x Weekly Chart. Source: CoinMarketCap

0x Weekly Chart. Source: CoinMarketCap

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Report: SEC Expands Crackdown on ICOs, Regulatory Ambiguity Remains

Despite recent calls from Congress to provide regulatory clarity on ICOs, the SEC continues is crackdown on hundreds of ICOs, according to a joint report.

The U.S. Securities and Exchange Commission (SEC) has expanded its crackdown on Initial Coin Offerings (ICOs), putting “hundreds” of projects at risk, according to a recent joint investigation by Yahoo Finance and Decrypt Media published, Oct. 10.

The authors of the report stressed that hundreds of crypto and blockchain startups that conducted token sales have eventually found that they had violated securities laws despite their endeavors to comply with regulations. In response to SEC pressure, dozens of firms have reportedly “quietly agreed” to refund investors’ money and pay fines, rather than attempt to reach a legal compliance.

According to Yahoo and Decrypt’s conversations with more than 15 industry sources, many startups that were subpoenaed by the SEC did not know how to satisfy the commission’s demands, and were unable to consult with other firms on how to handle the matter.

The sources — who are represented by employees of subpoenaed companies or their attorneys — preferred to stay anonymous due to an SEC restriction from disclosing the issue.

An anonymous securities attorney at a high-profile Silicon Valley firm told Yahoo and Decrypt that while “everybody’s holding their breath,” waiting for new rules, the SEC is not going to provide them. According to the anonymous attorney, while dealing with the recently emerged industry, the SEC still applies the “same laws, the same statutes, the same rules, to stocks and bonds and everything else.”

As previously reported by Cointelegraph, there has been a “cascade of uncertainty,” associated with the existing ICO token classification, which only further complicates the development of desperately needed regulations for ICOs.

While major altcoin Ethereum (ETH) was launched back in July 2015, the SEC stated that the cryptocurrency would be regulated as a security only in June this year. Despite calls for regulatory clarity and comments from lawakers that the ICO industry needs “light touch” regulation, the SEC continues its crackdown on ICOs.

According to a recent study by financial research firm Autonomous Research, ICOs raised $20 billion since the start of 2017, which is $18 billion more than the previous year. With that, more than 80 percent of ICOs that were conducted in 2017 have been identified as scams by the ICO advisory firm Statis Group in July. Still, the U.S. is ranked the “most favorable” country for the ICO market, based on amount of funds raised by top companies in the field.

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US SEC Halts Fraudulent ICO That Claimed to Possess Regulator’s Approval

The U.S. Securities and Exchange Commission has halted an ICO that falsely claimed the support of the SEC and used a fake regulatory agency to promote their product.

The U.S. Securities and Exchange Commission (SEC) has halted a planned Initial Coin Offering (ICO) that falsely claimed have SEC approval, the agency reported in an official press release Thursday, Oct. 11.

The SEC suspended the ICO project with an emergency court order, and also halted pre-ICO sales by the company Blockvest LLC, and its founder Reginald Buddy Ringgold III.

The complaint by the SEC alleges that Blockvest falsely claimed that their ICO and affiliates had acquired approval from major financial regulators, including the SEC itself. Blockvest and Ringgold — who also goes by the name Rasool Abdul Rahim El — claimed the crypto fund was “licensed and regulated.”

The firms are accused of violating federal law by impersonating the SEC seal, as well as running an ICO promoted by a fake agency dubbed the “Blockchain Exchange Commission.” The “Commission” reportedly used a graphic similar to the SEC seal, as well as the SEC address.

According to the SEC, Blockvest and Ringgold also violated the law by continuing their fraudulent activity after receiving a cease-and-desist letter by the National Futures Association (NFA).

Following the SEC’s complaint, the U.S. District Court for the Southern District of California issued an order freezing Blockvest and Ringgold’s funds as well as suspending their securities registration provisions. The hearing is set for Oct. 18, and will consider prolonging the preliminary injunction and the asset freeze.

Other firms have attempted to defraud investors by make spurious claims about their status with federal regulators. On Sept. 28, the U.S. Commodity Futures Trading Commission (CFTC) filed a suit against two companies for alleged fraudulent solicitation of Bitcoin (BTC). The companies were also impersonating a CFTC investigator, as well as using forged official documents to pose as the the CFTC’s General Counsel with the CFTC’s official Seal.

The SEC’s Office of Investor Education and Advocacy, and the CFTC Office of Customer Education and Outreach have issued an investor warning on the use of false claims regarding SEC and CFTC endorsements.

Earlier this year, the SEC Office of Investor Education and Advocacy launched a fake ICO website, intended to increase awareness of the typical warning signs of scam ICOs and promote investor education.

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Suspect in Thai Bitcoin Scam Unable to Return to Thailand Due to Passport Revocation

The Foreign Ministry of Thailand has invalidated the passport of an alleged Bitcoin scammer, rendering him unable to return to his home country for prosecution.

The Foreign Ministry of Thailand has revoked the passport of an alleged crypto scammer, which has reportedly rendered him unable to return to his home country for prosecution, the Bangkok Post reports Wednesday, Oct. 10.

According to the report, Prinya Jaravijit was in the U.S. after a cryptocurrency investment scheme surfaced in which he and several accomplices allegedly defrauded a Finnish investor of $24 million.

The Crime Suppression Division’s (CSD) deputy commander Pol Col Chakrit Sawasdee claimed on Wednesday that the Foreign Ministry invalidated the passport of the prime suspect Jaravijit.

Sawasdee reportedly ordered the suspect to turn himself in by Monday, but Jaravijit stated that he was not able return to Thailand since his passport was revoked, making his stay in the U.S. illegal. Jaravijit was reportedly in the process of handling his return with the Thai embassy in the U.S.

On Tuesday, the Thai Anti-Money Laundering Office (AMLO) confiscated funds worth $6.4 million from Jaravijit’s family and other people connected to the case. Next week, local police are reportedly set to charge the suspect’s family and elder brother with money laundering. The accused allegedly received money from Jaravijit and spent it later.

As previously reported by Cointelegraph, Jaravijit and his accomplices are accused of defrauding Finnish millionaire Aarni Otava Saarima and his business partner, who were lured into investing their Bitcoin (BTC) in a fake investment scheme involving three companies and  gambling-focused crypto token Dragon Coin.

The alleged scammers took their victims to a Macau-based casino, where they claimed the tokens would be used. Saarima subsequently transferred his bitcoins, but never saw returns, nor shareholder papers or proof of investment in Dragon Coin. Saarima approached the CSD with a complaint in January.

The deputy commander reported that the other suspects have all been members of the Jaravijit family, including investor Prasit Srisuwan and businessman Chakrit Ahmad, who reportedly have reached a compensation settlement with the Finnish investor.

The case first came to light in August, when Thai police arrested 27-year old soap-opera star Jiratpisit “Boom” Jaravijit, who is reportedly one of the seven suspects involved in the $24 million crypto scam.

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BMW to Host Event for Blockchain in Auto Tech Tournament

Technology from the Mobility Open Blockchain Initiative’s tournament for blockchain in auto tech will be showcased publically at an event hosted by BMW next year.

The Mobility Open Blockchain Initiative (MOBI), and the Trusted IoT Alliance (TIoTA) have launched a tournament for blockchain applications in vehicles, according to an official press release published Oct. 10.

The new tournament entitled MOBI Grand Challenge reportedly intends to develop “the first viable” blockchain-powered network of vehicles and system to coordinate machines, provide data sharing, as well as to improve the level of mobility in urban conditions.

The three-year blockchain challenge, which plans to award winners with over $1 million dollars worth of tokens, will cover a number of events, and invites entrants to participate online globally.

The MOBI Grand Challenge will begin Oct. 12 with the first four-month challenge to showcase “potential uses of blockchain in coordinating vehicle movement and improving transportation in urban environments.”

Selected technologies from the first challenge will be demonstrated at an event hosted by MOBI community member BMW Group in Munich, Germany in February 2019.

The outcomes found in the first series of the MOBI Grand Challenge will be used as basis to create the next challenges of the three-year tournament.

According to the press release, the winners of the first challenge will be granted $350,000 worth of awards in a number of categories, including $250,000 worth of tokens by Beyond Protocol, and $100,000 worth of tokens by Ocean Protocol.

Ocean Protocol is a blockchain-based data exchange protocol that has committed a prize of $1 million dollars in tokens to the MOBI Grand Challenge. Beyond Protocol is a Silicon Valley-based firm that is applying distributed ledger technology (DLT) to secure Internet of Things (IoT) devices. The firm has committed $250,000 worth of tokens to be used on its protocol network.

Zaki Manian, Executive Director of the Trusted IoT Alliance and a member of MOBI’s Board of Advisors, stated that mobility is a “breakout” IoT industry direction for blockchain. According to Manian, just a “small percentage of companies have completed end-to-end proof of concepts in this area,” so the new tournament intends to “fill this gap.”

In May 2018, four leading global vehicle suppliers BMW, GM, Ford, and Renault launched a jointed blockchain platform aiming to “change transportation.” The joint effort aims to address mobility issues, making it “safer, greener, and more affordable” by using blockchain technology.

In March, Cointelegraph reported that major American car manufacturer Ford patented a system for vehicle-to-vehicle communication methods via exchange of crypto tokens in order to facilitate traffic flow.

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Research: $20 Billion Raised Through ICOs Since 2017

A recent study by Autonomous Research has revealed that ICOs raised $20 billion since the beginning of 2017.

Initial Coin Offerings (ICOs) have raised $20 billion since the start of 2017, which is $18 billion more than the previous year, according to a recent study by financial research firm Autonomous Research. The study dubbed “Crypto Utopia” explores the cryptocurrency industry over the past year, focusing on ICOs and the regulation to which they are exposed.

Per the study, $12 billion has been raised through ICOs in the course of 2018, while last year they raised $7 billion. The ICOs of blockchain protocol EOS and messaging app Telegram are responsible for almost half of all ICO funds in 2018 at $4.2 billion and $1.7 billion, respectively.

Though over 300 crypto funds have been launched to invest in crypto assets, a vast majority of funds are concentrated within a small minority of organizations, according to Autonomous.  

The research notes that ICOs are often exposed to fraud and scams, which form 20 percent of project white papers, while phishing and hacking are responsible for stealing 15 percent of all crypto assets by market capitalization. More than 50 percent of ICOs have failed to raise funds and subsequently have closed.

2017 saw over $7 billion of investment flow into ICOs, which is fourfold greater that equity investment in crypto companies. Many ICOs were purportedly launched to take advantage of the “goldrush,” subsequently resulting in quality and regulatory concerns regarding tokens.

Price performance for the top 200 liquid coins during the last 1.5 years has reportedly demonstrated an unprecedented surge, from 10 to 1 million percent. The authors of the study suggest that such a performance shows exponential software-like growth for digital currencies.

The study states that  venture and trading funds are “the most numerous and hold the most assets under management.”

Another study by Autonomous Research published last month stated that funding in ICOs has seen its hardest slump in 16 months, stating that in August startups raised $326 million, which is the smallest amount since May 2017.

In August, ICORating published a study showing that the ICO market more than doubled in a year. ICOs in Q1–2 2018 had already raised over $11 billion in investments, a figure which it purports is ten times larger than the sum of investments from ICOs in Q1–2 2017.

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Hackers Breach Smart Contract on Ethereum-Based Adult Entertainment Platform SpankChain

Blockchain-based adult entertainment platform SpankChain lost $38,000 in ETH in a hack of its payment channel smart contract.

Ethereum-based adult entertainment platform SpankChain has suffered a smart contract security breach that led to loss of around $38,000, the firm reported on its Medium page Oct. 9.

The hack, which purportedly took place Oct. 6, was detected by SpankChain a day after, and was announced today in a post entitled “We Got Spanked: What We Know So Far.”

Anonymous attackers managed to steal 165.38 Ethereum (ETH) or around $38,000 from the platform’s payment channel smart contract. Additionally, the security breach caused the immobilization of $4,000 worth of the SpankChain’s internal token called BOOTY.

While most of lost or immobilized funds belong to SpankChain itself, the platform claimed that client reimbursements are of “immediate priority.” The company will shortly repay $9,300 worth of Ethereum and Booty coins directly to users’ SpankPay accounts via Ethereum airdrop.

The SpankChain team has subsequently halted its camservice Spank.Live in order to prevent users from depositing via the payment channel smart contract. The website reboot is expected to take around two to three days in order to reset the payment channel smart contract, carry out airdrop reimbursements, reset native token distribution, and eliminate the security weakness.

The attack was related to a “reentrancy” bug similar to that which exploited The Decentralized Autonomous Organization (The DAO). The hacker reportedly created a malicious contract mimicking an ERC20 token, with a “transfer” function calling back into the payment channel smart contract multiple times in a loop, extracting Ethereum each time.

A smart contract is a protocol that enables the specific behavior of a contract by applying the terms of the agreement into the code, eliminating the need for a third party intermediary.

While smart contracts are reportedly “extremely difficult to hack,” they are still a young technology, and can be prone to bugs, which may in turn be exploited by scammers.
The adult entertainment industry is increasingly taking advantage of cryptocurrencies and blockchain technology, mostly driven by the technology’s inherent anonymity, as well as a number of other benefits.

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Swiss Asset Management Firm Tiberius Group AG Delays Launch of Metals-Backed Token

Swiss-based asset management firm Tiberius Group AG has delayed the issue of its metals-backed token Tiberius Coin due to high fees from credit card companies.

Switzerland-based commodities assets manager Tiberius Group AG has delayed the sale of its metals-backed cryptocurrency, Tiberius Coin, due to high fees from credit card companies, Bloomberg reported Oct. 9.

The company announced its intention to issue a digital currency tied to the price of metals — copper, aluminum, nickel, cobalt, tin, gold and platinum — in late September. Tiberius Group then explained that “instead of underlying the digital currency with only one commodity, we have chosen a mix of technology metals, stability metals and electric vehicle metals. This will give the coin diversification, making it more stable and attractive for investors.”

Now, the Swiss firm will reportedly delay the launch of Tiberius Coin due to “unacceptably” high fees from credit card processing companies. Per Tiberius’ assessment, it will be unable to handle orders worth $15 million due to “restrictions” put on credit cards. Tiberius stated:

“As of now, we are investing heavily in our platform, improving it and working with notable credit card processors to onboard new payment gateways for our client base to use. All investors who took part in the sale will have their money refunded within 30 days.”

Credit card companies have previously shown some hesitation about working with cryptocurrency companies and digital asset trading. In June, San-Francisco-based bank Wells Fargo announced that it will no longer allow its customers to purchase cryptocurrency using its credit cards. The move was reportedly taken in order to avoid “multiple risks” associated with cryptocurrency usage.

In February, Cointelegraph reported that customers at J.P. Morgan Chase, Bank of America, and Citigroup can no longer purchase cryptocurrencies with credit cards. J.P. Morgan Chase said that it had discontinued the service “due to the volatility and risk involved,” while Citigroup stated it would review their policy as the crypto market develops.

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‘Netflix for Professional Growth’: Platform Helps Users Learn by Watching Videos

Users can learn how to build real products from more experienced colleagues.

A blockchain project called Education Ecosystem is developing a decentralized online learning platform called LiveEdu, where people can learn how to build complete products in categories like programming, cryptocurrencies, artificial intelligence, and other technology fields. Describing itself as “Netflix for professional development”, the company says it is different to other online learning platforms as they are focused on intermediate to advanced level learners seeking to improve their career skills and not beginners just starting out.

Learning from real projects

According to the Training Industry survey, the money spent on professional development worldwide was $359.3 billion in 2016 and reached $362.2 billion in 2017. Education Ecosystem has announced an ambitious goal — to disrupt the professional training industry.

LiveEdu is a platform where intermediate and expert learners can get current information on future fields of technology from their more experienced colleagues. Besides programming, cryptocurrencies and artificial intelligence ( AI) , there are topics such as game development, cyber security, data science, design, virtual reality (VR), and augmented reality (AR).

Content creators develop projects where they showcase themselves building real products. The users can watch videos with live-classes and also interact with the project creator during a live-stream. All of the videos are also archived.

The company says developers have been recording how they create products for years. The problem was that it was not easy for learners in technical fields to find the instruction for an exact topic or suitable real-life project examples, especially after they pass the beginner level. Those videos were scattered across YouTube, Twitch, and Reddit or personal blogs. Education Ecosystem decided to make a dedicated place where both sides — the developer and other users — could meet. The company’s goal is to provide a project-learning library where learners can easily find practical examples for some of the most in-demand skills of today.

“We believe learning from real projects is a practical and efficient way for professionals and students to improve their skills and make more money in their career,” Education Ecosystem CEO and Founder Dr. Michael J. Garbade says.

The key component of the ecosystem is the Education Token (LEDU). The new version of LiveEdu, that the team is developing now, will be powered by this ERC-20 token. Currently, LEDU coins are available on Exrates, BitForex, Livecoin, Mercatox, and IDEX. “LEDU tokens are used as payment for all financial transactions in the internal ecosystem, as well as rewards for project creators, learners, site moderators, and API ecosystem developers,” the company says.

A million users in 200 countries

The beta version of the program was launched at the end of 2015 with the name ‘Livecoding.tv.’ It only included video content related to programming. The major change for the project was made two years later in 2017. The platform was renamed to ‘LiveEdu,’ the education categories were also expanded to the current topics. The team has also adjusted the monetization structure. Education Ecosystem concluded a token sale in February 2018.

Now the company earns by subscriptions. Education Ecosystem offers different prices based on the number of topics and the duration. In the future the company plans to make money mainly through B2B and B2G sales. The B2B and B2G sales channels will be launched in 2019.

Education Ecosystem says that LiveEdu was used by more than one million people in almost 200 countries since the launch of the platform. The number of streamers exceeded 13,000, and they have created over 200 000 videos. Around 50 new projects per week are currently being added. That is expected to ramp up as the company seeks to build the largest project learning library on the internet.

Education Ecosystem plans to expand their external ecosystem in 2019 to include businesses, colleges, and universities as well as other online education platforms. The company sees the likes of Pluralsight, Udemy, and others as potential partners and hopes those companies can become distribution channels for the projects available on LiveEdu via its API.

The team has recently concluded a roadshow through North America, attending major events like BlockShow in Las Vegas, Token Fest in Boston, and Blockchain Seattle. Another roadshow across Asia is scheduled to begin in October.


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