eToro’s 9M Users Set To Increase with US Exchange & Wallet Launch

UK-based trading platform eToro has announced it will launch an international cryptocurrency exchange and mobile wallet, debuting in the US for the first time. $100M Series E Funds Put To Work As part of a keynote speech at the Consensus 2018 conference in New York which finished May 16, eToro CEO Yoni Assia confirmed the move, which will provide US traders with ten cryptocurrency pairs. “U.S. crypto holders have a strong appetite for diversified portfolios,”

The post eToro’s 9M Users Set To Increase with US Exchange & Wallet Launch appeared first on Bitcoinist.com.

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eToro’s 9M Users Set To Increase with US Exchange & Wallet Launch

UK-based trading platform eToro has announced it will launch an international cryptocurrency exchange and mobile wallet, debuting in the US for the first time. $100M Series E Funds Put To Work As part of a keynote speech at the Consensus 2018 conference in New York which finished May 16, eToro CEO Yoni Assia confirmed the move, which will provide US traders with ten cryptocurrency pairs. “U.S. crypto holders have a strong appetite for diversified portfolios,”

The post eToro’s 9M Users Set To Increase with US Exchange & Wallet Launch appeared first on Bitcoinist.com.

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JPMorgan Creates and Fills New Position of Head of Crypto Assets Strategy

JPMorgan creates and fills new position of head of crypto assets strategy, post will identify and lead new crypto projects at bank.

Leading US banking group and financial services firm JPMorgan Chase has recently created and filled the new position of head of crypto-assets strategy, Business Insider reported today, May 17.

London-based Oliver Harris, 29, will take the new role, reporting to the head of blockchain development, Umar Farooq. Harris will also lead JPMorgan’s internal blockchain project Quorum, which began testing by JP Morgan Chase and the National Bank of Canada last month.

According to Business Insider, Harris will be identifying and leading new crypto projects for the bank, rather than actively trading in cryptocurrencies. He will reportedly investigate crypto custody services and how blockchain could work in JPMorgan’s payments business.  

For the last two years, Harris has been leading JPMorgan’s In Residence program, which identifies and partners with fintech startups that the bank finds promising.

Daniel Pinto, co-president of JPMorgan, has recently taken a positive stance on cryptocurrencies in an interview with CNBC, claiming that the “tokenization” of the financial system is “real”, with “many central banks looking into” it. However, Pinto stressed that crypto adoption is not possible in its “current form”.

In general, the investment banking giant has been skeptical of cryptocurrencies. JPMorgan banned its customers from crypto purchases with credit cards back in February, in addition to including cryptocurrencies to the “Risk Factor” section of its 2017 annual report to the US Securities and Exchange Commission (SEC).

Last year, JPMorgan’s Chairman & CEO Jamie Dimon called Bitcoin (BTC) a “fraud” and claimed that he would fire any employee trading BTC on the company’s accounts. Dimon soon reversed his position in January, admitting that he regretted his earlier statements and adopting a lukewarm stance toward crypto. Dimon said he is, “not interested that much in [crypto] at all.”

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Cases Of Illegal Bitcoin And Cryptocurrency Mining: Chicken Farms And New York

Cryptocurrency miners in the US and South Korea disguised as protected businesses to mine bitcoin with unfairly cheap electricity rates.

In the US, China, and South Korea, many individual cryptocurrency miners and large-scale mining centers were cracked down for conducting illicit operations. For example, in April 2018, cryptocurrency miners in South Korea were arrested for illicitly utilizing cheap electricity to produce cryptos.

Chicken farm in South Korea

In South Korea, places such as chicken farms and factories in development restricted areas are provided with electricity at cheaper rates by the government to help struggling industries and support innovative technology-focused initiatives. The government is stricter with the usage of electricity in these areas and consistently monitors the inflow of energy into buildings, factories, farms, and houses near these specially approved districts.

On April 19, police in the Gyeong-ki province of South Korea, the second largest region behind Seoul, arrested operators of a mining center in Nam Yang city. An in-depth police investigation disclosed that five cryptocurrency miners, whose identities remain confidential as they are still in police custody, purposely rented out factories and chicken farms in the protected part of the city to receive electricity for substantially lower rates.

By disguising buildings as semi-conductor factories and several properties as chicken farms, the five individuals were able to mine cryptocurrencies like Bitcoin and Ethereum with virtually no cost apart from the ASIC miners they acquired and installed.

Image source: Northern Gyeonggi Provincial Police Agency via Hani

In the Paju restricted development area, the five individuals rented out a 859 square meter building and applied to the government as a semi-conductor factory. For 8 months, the group utilized the space to mine cryptocurrencies with more than 1580 ASIC miners. In the later months of their illegal venture, the group recruited more than 40 individuals and rented out their ASIC miners to produce even more cryptocurrencies.

The group generated more than $300,000 by accepting ASIC miners from individuals within months but the actual sum of cryptocurrencies the group was able to produce throughout the 8-month period remains unclear.

Preliminary investigations undertaken by the Gyeong-ki and Paju police has shown that the group produced at least 760 Ethereum, which is worth more than $500,000, and a large sum of Bitcoin. The local police is still investigating into the final sum of money the group generated throughout the past year. The police has also discovered that the group only paid 50 percent of the normal electricity rate and received significant discounts for renting out the farms and factories.

Currently South Korea has no laws or policies approved that can punish cryptocurrency miners in development restricted areas. Minor charges could be applied to the five individuals, for using the space intended to carry out other initiatives, but no major penalties can be imposed as of now. To prevent similar situations from occurring in the future, the local police has requested the Ministry of Land, Transport and Maritime Affairs to draft and approve laws that prohibit cryptocurrency miners from taking advantage of districts and areas with cheaper electricity rates.

First mining ban in New York

In the US on March 18, local authorities in the state of New York requested a cryptocurrency mining facility to halt their mining initiative after residents of Plattsburg, a small lakeside town in upstate New York, filed an official complaint to the police for the excessive usage of low-cost electricity by local miners.

The city of Plattsburg did not impose a permanent ban on Bitcoin mining however. Instead, local authorities and residents released a moratorium which states that the city will not consider applications for commercial cryptocurrency mining for at least a year and a half. Bloomberg reported that the city can charge more than $1,000 per day if miners decide to use low-cost electricity of the city to mine. The authorities of Plattsburg said:

“It is the purpose of this Local Law to facilitate the adoption of land use and zoning and/or municipal lighting department regulations to protect and enhance the City’s natural, historic, cultural and electrical resources.”

Another cryptocurrency mining facility was confronted by local authorities and a telecommunication powerhouse T-Mobile on Feb. 15 after it was revealed that ASIC miners from a mining facility based in Brooklyn interfered with the 700 MHz band of T-Mobile. The Federal Communications Commission (FCC) said:

“On November 30, 2017, in response to the complaint agents from the Enforcement Bureau’s New York Office confirmed by direction finding techniques that radio emissions in the 700 MHz band were emanating from your residence in Brooklyn, New York. When the interfering device was turned off the interference ceased. You identified the device as an Antminer s5 Bitcoin Miner. The device was generating spurious emissions on frequencies assigned to T-Mobile’s broadband network and causing harmful interference.”

At the time, the FCC gave the mining facility a 20-day notice to halt their operations and move elsewhere as the radio emissions released by the ASIC miners within the facility were negatively impacting local telecommunication networks.

Not illegal

Bitcoin and cryptocurrency mining is legal in most countries, even in China which banned the trading of cryptocurrencies like Bitcoin and Ethereum in Sep. 2017.

Cryptocurrency mining is legal in most regions because it is beneficial for electricity grid operators to provide excess energy that they can no longer supply to households and businesses. As such, although local governments have tried to ban cryptocurrency mining in the past as demonstrated in CNLedger’s report below, cryptocurrency mining remains unbanned in most countries.

It is also not illegal to mine Bitcoin or any other cryptocurrency using electricity that is low cost. However, it is illegal to disguise cryptocurrency mining initiatives as a protected business in a development restricted area to take advantage of cheap electricity that is only provided to approved organizations and institutions. This is why South Korean authorities are currently drafting regulations to prevent mining facilities from taking advantage of cities with cheaper electricity.

THE COST TO MINE 1 BITCOIN

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First New-York Based Crypto Trading Company Receives BitLicense

A subsidiary of the Digital Currency Group has become the first New York-based crypto trading company to receive the BitLicense.

Genesis Global Trading, a subsidiary of the Digital Currency Group, has been granted a BitLicense from the New York Department of Financial Services (DFS), according to a press release published on PR Newswire today, May 17.

After the BitLicense became required for all New York crypto trading firms in August of 2015, a wave of crypto companies left the state, either unable or unwilling to comply with the stringent new regulatory requirements.

Genesis, which is the first New York-based trading firm to now operate with a BitLicense and the fifth firm overall to receive one, will be able to trade in Bitcoin (BTC), Ethereum (ETH), Ethereum Classic (ETC), Bitcoin Cash (BCH), Ripple (XRP), Litecoin (LTC), and Zcash (ZEC). The press release notes that Genesis has traded in billions of dollars worth of crypto since 2013.

Before receiving the BitLicense, Genesis had operated under a special DFS provision that still let them trade in crypto in New York state. CEO of Genesis Global Trading, Michael Moro said in the press release that “although we have operated under a safe harbor provision in recent years, today’s decision is an important step forward and reaffirms the robust compliance measures we have enacted as an established trading partner.”    

The Square Cash app, which has included a Bitcoin option since this January,  is currently working on getting a BitLicense in order to operate in New York. The app added Wyoming to its list of states allowing the crypto option in mid-March, with New York, Georgia, and Hawaii still excluded.

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SEC Launches Mock ICO to Show Investors Warning Signs of Fraud

The SEC Office of Investor Education and Advocacy launched a fake ICO website to illustrate common warning signs of a scam.

Office of Investor Education and Advocacy at the US Securities and Exchange Commission (SEC) has launched a fake initial coin offering (ICO) website,  according to a press release May 16. The goal of the site is to increase awareness of the typical warning signs of scam ICOs and to promote investor education.

The mock website HoweyCoins.com represents a classic example of a fraud ICO website that touts an “all too good to be true investment opportunity.” The website includes such details as a misleading and blurry white paper, guaranteed returns claims, celebrity endorsements, and a countdown clock that is “quickly running out on the deal of a lifetime.”

When a user clicks on “Buy Coins Now,” they are lead to the website Investor.gov, which was established by the SEC to help investors avoid fraud. The site warns that if users would have responded to an investment offer like HoweyCoins, they “could have been scammed.”

ICO - HOWEYCOINS

SEC Chairman Jay Clayton emphasized that the agency supports the adoption of new technologies, but it also encourages investors to educate themselves and understand what fraudulent offers look like:

“We embrace new technologies, but we also want investors to see what fraud looks like, so we built this educational site with many of the classic warning signs of fraud. Distributed ledger technology can add efficiency to the capital raising process, but promoters and issuers need to make sure they follow the securities laws. I encourage investors to do their diligence and ask questions.”

Owen Donley, Chief Counsel of the SEC’s Office of Investor Education and Advocacy, noted that a fraudulent ICO website can be set up in a very little time, which illustrates how easy and fast it can be to launch another scam offer. “Fraudsters can quickly build an attractive website and load it up with convoluted jargon to lure investors into phony deals,” Donley said.

Earlier this week, Cointelegraph reported that three co-founders of cryptocurrency startup Centra Tech have been formally indicted for running a fraudulent ICO. Centra Tech’s ICO raised $32 mln from investors in 2017. The Florida-based founders misled investors by claiming that they had partnered with Visa and Mastercard to issue virtual currency debit cards.

Late last month, SEC Commissioner Robert Jackson expressed criticism of ICOs in general, claiming that investors “are having a hard time telling the difference between investments and fraud.” He further stated that the ICO market is a prime example of what an unregulated securities market would look like.

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US Prosecutors Indict Three Co-Founders Of Floyd Mayweather-Backed ICO For Fraud

A US District Court in Manhattan has issued a formal indictment of the three founders of Floyd Mayweather-backed Centra Tech ICO for securities fraud, among other charges.

The three co-founders of cryptocurrency startup Centra Tech have been formally indicted for running fraudulent ICO, according to a statement May 14 from the U.S. Department of Justice.

According to the four-count indictment issued by the U.S. District Court in Manhattan, all three Centra Tech co-founders Sohrab Sharma, Robert Farkas, and Raymond Trapani are being charged with securities fraud, wire fraud and two conspiracy counts.

Centra Tech’s Initial Coin Offering (ICO) raised $32 mln from investors in 2017. The Florida-based defendants had misled investors by falsely claiming that their company had partnered with Visa  MasterCard to issue virtual currency debit cards.

Centra Tech was previously promoted by celebrities Floyd Mayweather and DJ Khaled.

Late last month, US Securities and Exchange Commission (SEC) Commissioner Robert Jackson expressed criticism of ICOs in general, claiming that investors “are having a hard time telling the difference between investments and fraud.”

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Coinbase Targets ‘$10 Bln’ Institutional Investor Market With New Suite Of Products

Major US crypto wallet and exchange service Coinbase has announced it is launching a series of new products aimed at drawing in major institutional capital.

Major US crypto wallet provider and exchange service Coinbase has announced it is launching a suite of new products aimed at institutional investors, according to an official blog post today, May 15.

The four products – Coinbase Custody, Coinbase Markets, The Coinbase Institutional Coverage Group and Coinbase Prime – all focus on alleviating major concerns that have allegedly caused institutional investors to hold back from entering the cryptocurrency space so far, such as security and regulatory compliance.

Adam White, Coinbase vice president and general manager, was confident in telling CNBC that:

“We think this can unlock $10 billion of institutional investor money sitting on the sideline. We’re seeing a rapid increase in attention awareness and adoption in the cryptocurrency market.”

Coinbase Custody, first announced last year in an official Coinbase blog post, addresses the “number one” concern of institutional investors, namely, security. The company explains that the  custody solution for digital assets will secure clients’ funds through rigorous financial controls such as multi signatory protection, audit trails, and withdrawal limits.

Although the company reportedly already stores over $20 bln worth of clients’ crypto, according to CNBC, Coinbase Custody will be established in partnership with a third party auditor, reported to be an SEC-compliant independent broker-dealer.

Coinbase Markets, meanwhile, will be a Chicago-run electronic marketplace that provides a centralized pool of liquidity for all investors, and aims to offer settlement and clearing services in future, according to Coinbase’s announcement today. In addition, Coinbase Prime will be an separate trading platform for institutional clients.

Coinbase currently has over 20 mln customers and has already traded $150 bln in digital assets on its crypto exchange platform, according to CNBC. In 2017, it reported $1 bln in revenue, according to figures from Recode, with $225 million in VC funding from investors such as Andreessen Horowitz, Union Square Ventures and the New York Stock Exchange. It reportedly valued itself at around $8 bln in an acquisition deal this spring.

This month, New York Stock Exchange owner ICE announced its own plans to settle crypto swap contracts in BTC, suggesting it too has come up with an SEC-compliant custody solution for institutional holders. ICE’s announcement came just days after investment banking giant Goldman Sachs said it would be opening a crypto trading desk “within weeks.” With custody and regulatory obstacles seemingly out of the way, many have predicted that a “mature” crypto market will indeed inevitably draw major institutional investment into the space.

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FedEx CEO: Blockchain Is The ‘Next Frontier’ For Global Supply Chains

FedEx remains bullish on blockchain as its CEO says a failure to engage with the technology means “probable extinction” for logistics businesses.

Delivery services multinational FedEx said it is “quite confident” blockchain has “big, big implications” for supply chains in a speech May 14, as it continues engagement with the technology.

Speaking at the Consensus 2018 conference in New York Monday, FedEx CEO Fred Smith said that the time had come for businesses to ingratiate themselves with blockchain or face “probable extinction.”

“We’re quite confident that it has big, big implications in supply chain, transportation and logistics,” he said during a panel quoted by Bloomberg and other sources, continuing:

“It’s the next frontier that’s going to completely change worldwide supply chains.”

FedEx has had positive experiences looking into the potential blockchain holds to improve its businesses model. In February, the company joined the Blockchain in Transport Alliance (BiTA), a focus group whose members include rail operator BNSF, JD Logistics, and GE Transportation.

FedEx’s goal, industry media reported at the time, was to strive to “create common logistics standards” based on the technology.

Prior to that, in October of last year, it became a member of the Canada-based Blockchain Research Institute, Don Tapscott’s initiative dedicated to “conducting the definitive study of the impact of blockchain technology on business, government and society.”

Earlier this month meanwhile, Cointelegraph reported on how the issue of modernizing supply chain structures of all descriptions has become a central focus of  governments globally, in addition the private sector. On May 10, Cointelegraph reported that Australia’s home affairs ministry is currently looking at how it could implement blockchain in its trade supply chains. That same week, two United States House Subcommittees held a hearing focused on how blockchain can be used in supply chain management.

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Bitcoin Could Emerge As A ‘Threat’ To US Dollar In Future, Suggests St. Louis Fed Chief

The president of the St. Louis Fed says the US dollar could end up “threatened” by Bitcoin, notes crypto’s ability to cut costs in trade.

A top US policy maker made mostly positive remarks about Bitcoin, also not ruling it out as a potential “threat” to the US dollar, in an interview with CNBC Monday, May 14.

Speaking to CNBC on the sidelines of the Consensus 2018 conference in New York Monday, St. Louis Fed president James Bullard also identified positive aspects of cryptocurrency, namely revolving around cutting costs in trade. He stated that crypto is “facilitating trade that would not otherwise occur. Some of that’s illegal, but some of that is avoiding costs that would otherwise be there.”

Asked whether Bitcoin was a threat to the US dollar, Bullard voiced uncertainty about the  potential competition the leading cryptocurrency could pose, saying, “I don’t think so at this point […]. We don’t know how the future’s going to unfold.”

“My idea is that there’s a lot of currency competition going on right now,” Bullard meanwhile continued on the topic of dollar supremacy, adding:

“The dollar has been the winner historically because it’s backed by the largest economy and a relatively stable policy in terms of low inflation and that’s going to be tough to beat. But a lot of people here want to beat it.”

On the topic of blockchain, Bullard was much more openly bullish, saying:

“we think blockchain technology is very interesting [..] we want to be very engaged and thoughtful as this proceeds.”

He also responded to a question of whether or not the Fed was considering issuing its own cryptocurrency, saying noncommittally, “we can certainly look at that as a possibility. And there are different parts of the Fed that look at all kinds of applications of blockchain technology. But I wouldn’t say there’s any plan at this point.

The comments continue the trend of general crypto support from the St. Louis Fed. In January this year, the reserve bank published a dedicated paper titled “A Short Introduction to the World of Cryptocurrencies” in which researches forecast it was “likely” that Bitcoin and altcoins would “emerge as their own asset class.”

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