Cryptocurrencies finish the week positive with Ripple leading the charge to become #2 coin by market cap
Sep 21, 2018
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Developments in Financial Services
- A group made up of major global banks, trading firms, and a leading energy company announced today that they have launched a joint venture to build out a new blockchain platform for the financing and trading of commodities. Some of the members of this Swiss-based venture include BNP Paribas, Citi, Credit Agricole, Koch Supply and Trading, Macquarie, and Societe Generale. The venture, dubbed komgo SA, is being developed in partnership with Ethereum-focused solutions group ConsenSys.
- According to the, “Virtual Markets Integrity Initiative Report” published by the Office of the New York State Attorney General (OAG) on Tuesday, roughly 20% of crypto trades made on Coinbase are made by the exchange itself. The OAG’s report was the result of a detailed questionnaire sent to 13 major US crypto exchanges. This practice, known as proprietary trading, is used to increase liquidity on a platform but alters trading volumes.
- After the New York Office of the Attorney General (OAG) published a report accusing major US crypto exchanges of lack of market oversight, Coinbase’s Chief Policy Officer, Mike Lempres, wrote in a blog post that the OAG’s report has led to a misrepresentation of crypto exchanges in the media. In his response to the OAG claiming 20% of trading on Coinbase’s crypto exchange comes from Coinbase itself, Lempres clarified that Coinbase does not trade for the benefit of the company on a proprietary basis.
- Altonomy, a cryptocurrency trading advisory and digital assets management firm, has officially launched a sell-side over-the-counter (OTC) cryptocurrency trading desk. On top of that, the firm also launched a blockchain-based digital currency index fund, called Altonomy Taurus Index Fund. Altonomy claims to offer an unprecedented degree of transparency and professionalism while providing institutional investors a way to diversify into cryptocurrencies.
- Australia's financial regulator, the Australian Securities and Investments Commission (ASIC), is cracking down on misleading and deceptive initial coin offerings targeting retail investors. The news comes after the ASIC confirmed it has identified “consistent problems” in its ICO markets, forcing the financial regulator to shut down several ICO related companies.
- Crypto exchange, Coinbase, is expanding from 20 to 150 employees amidst the move to its new New York City office. The digital asset exchange said that despite the crypto bear market, institutional demand for Coinbase’s services did not recede, saying institutions saw this year as an opportunity to enter the market when things are not too frothy.
- Kraken, a major crypto trading exchange, announced via blog post that the exchange would introduce OTC block trading for those willing to make transactions above USD$100,000. Traders were invited to begin using the service right away. Kraken reported an immediate spike in trading volume with volume in the 24-hour period after the announcement doubling from its average.
- John McAfee, developer of the first antivirus software and cryptocurrency advocate, believes centralized exchanges will cease to exist in the next five years, giving way to trustless decentralized exchanges. McAfee believes this will be followed by the largest economic boom in human history.
- Sweden-based company, XBT Provider AB, will begin to list Bitcoin Exchange Traded Notes (ETN), according to Bloomberg. CEO Laurent Kssis said that clients have expressed interest in a number of cryptocurrency products in explaining the reasoning for XBT’s decision. XBT currently offers exchange traded products tracking Bitcoin and Ether in Sweden, however, the company is gearing up plans for expansion to other countries.
- Switzerland’s Minister for Finance, Ueli Maurer, and State Secretary for International Financial matters, Joerg Gasser, recently completed a visit to Israel with a goal of Swiss banks gaining access to Israeli markets. According to a report by Reuters, the two nations agreed to collaborate on future financial technology, cryptocurrency, and blockchain regulation following the visit.
- The Royal Bank of Scotland’s blockchain team has jumped ship in order to start a blockchain “venture studio”, called Chorum. Head of the team, Richard Crook, revealed in an interview with CoinDesk that the team will continue to work closely with the Cordite, a token project on R3’s Corda platform that the team developed while at RBS.
- The world’s largest cryptocurrency exchange, Binance, will soon begin its private beta testing of a crypto-fiat exchange in Singapore, announced via tweet by CEO Changpeng Zhao on Saturday. Allegedly, the fiat-crypto exchange will support the local Singaporean Dollar. Singapore was ranked as the world’s third most favorable country for initial coin offerings in mid-July.
- The world’s second largest stock exchange, Nasdaq, announced Friday that it is in the process of acquiring Cinnober, a Swedish trading solution company that has a history of dealing with digital assets. Cinnober has historically been bullish on cryptocurrencies, and the potential acquisition could signal a move by Nasdaq into the cryptocurrency space. CCN also reported last week of a closed-door meeting held by Nasdaq with leading cryptocurrency experts that talked about ways to legitimize cryptocurrencies as a traditional securities product.
- Top ten US bank, PNC, will begin using RippleNet to process international payments to its customers. Reported by Reuters, PNC’s Treasury Management unit will utilize Ripple’s xCurrent blockchain platform to speed up overseas transactions by US clients. Senior Vice President of Product Management at Ripple, Asheesh Birla, believes banks using xCurrent is the first step in large scale adoption of Ripple products.
- Trading legend and founder of high-speed trading firm DRW, Don Wilson, said while at Coindesk’s Consensus Singapore 2018 conference that bitcoin derivatives trading in Asia hours is almost equal to the volume seen in the US. Wilson went on to add that this trend is abnormal, especially when compared to other financial instruments. Specifically, Wilson referenced that Japanese yen-dollar trading volume is significantly lower in Asia.
- Two of the largest cryptocurrency exchanges in the world, Coinbase and Binance, have been on hiring sprees of late despite a heavy bear market in cryptos. In an interview with Bloomberg, Binance’s Chief Financial Officer, Wei Ahou, said the company is in the process of hiring 50 new employees for its new headquarters in Malta while it is also recruiting for its fiat-to-crypto exchange in Singapore. Last week, Coinbase announced it would be hiring about 80 employees for its new headquarters in NYC.
- A New York University (NYU) professor discussed how US regulators are all fighting to establish dominance in regulating cryptocurrencies. Professor David Yermack detailed a turf struggle, pointing out the NY Office of the Attorney General’s report released earlier this week accusing crypto exchanges of lack of proper market oversight, the Department of Financial Services’ recent ruling on a Bitcoin ETF, and the US Securities and Exchange Commission also trying to take a lead in crypto regulation. Yermack questioned whether or not this was beneficial to citizens.
- According to an unnamed source familiar with the matter, several large Russian banks have expressed strong interest in working with the cryptocurrency and blockchain industry during a closed-door meeting at the Moscow Exchange. The unnamed source told Russian news outlet, RBC, that cryptocurrency demand in Russia is very high, but banks cannot meet the demand due to a lack of clear regulation. Earlier this week, Russian officials met with Japanese regulators to discuss cryptocurrency regulation.
- After his appointment this summer, Zimbabwe’s finance minister, Mthuli Ncube, is taking a pro-cryptocurrency stance in seeking solutions to Zimbabwe’s cash problem. Zimbabwe’s central bank, the Reserve Bank of Zimbabwe, has historically taken the opposite stance. Ncube has promised to try to judge the Reserve Bank of Zimbabwe towards establishing a cryptocurrency division within the central bank.
- Brazil’s antitrust regulator, the Administrative Council for Economic Defense (CADE), is reportedly inspecting six major national banks for alleged monopolistic practices in the cryptocurrency space, according to Reuters. The investigation was initiated by a formal request from the Brazilian Blockchain and Cryptocurrency Association after several complaints. The probe is specifically looking at whether or not the country’s largest banks closed the accounts of brokerages trading Bitcoin.
- Britain’s Parliamentary Treasury Committee published a report Wednesday where lawmakers called for the regulation of the domestic cryptocurrency market, calling it the “Wild West”. Lawmakers claimed that investors are afforded very little protection from a variety of risks with no formal recourse for consumer compensation. The report highlights several problems in the cryptocurrency market, including volatile prices, hacking concerns, and money laundering issues.
- California’s Fair Political Practices Commission, the state’s political watchdog, has ruled that political candidates will not be allowed to accept donations in cryptocurrencies like Bitcoin. The vote on the issue occurred Thursday and favored the ban 3-1 with one individual abstaining.
- Five United States congress members have released a joint open-letter to the Internal Revenue Service (IRS), calling upon the IRS to issue clarified and comprehensive cryptocurrency taxation guidance. The lawmakers also added that while the IRS has made a point to remind citizens of current crypto tax laws and enforce said laws, the IRS' failure to issue more robust crypto tax framework severely hinders citizens’ ability to meet their obligations.
- Japan’s National Police Agency released a report today detailing that 60.503 billion yen (USD$540 million) in cryptocurrencies were stolen in the first half of 2018. The total number of thefts is about 158, triple the amount recorded over the same time period in 2017. The largest single crypto hack ever recorded occurred this year in Japan when crypto exchange Coincheck was hacked and robbed of 58 billion yen (USD$520 million) in January.
- Japanese financial services company, SBI Holdings, will launch a consumer payments application on Android and iOS using Ripple’s blockchain technology, dubbed MoneyTap. MoneyTap will enable domestic bank customers to transact instantly, 24-hours a day and seven days a week using a QR code, a phone number, or a bank account number. The intended launch of MoneyTap is somewhere between September and December 2018.
- Mastercard has filed patents for the use of blockchain technology in keeping track of consumer payments. The payment services giant filed a series of very similar patent filings last week to the US Patent and Trademark Office. In the patents, Mastercard outlines a distributed edger that could be used to record point-to-point transactions as they are processed. Particularly, a blockchain ledge would be ideal for streamlining account management by simplifying the process in which purchase orders are registered and monitored, one of the patent application details.
- Notable crypto exchange, Huobi, announced in a press release Wednesday that it has joined Russia’s VEB Innovation Fund. The main goal of this new partnership is for Huobi to relay its experiences with crypto regulation so Russian regulators can apply it while building regulatory framework for digital assets. Huobi spokesperson, Andrey Grachev, added that Hubi has intended to enter the Russian market since April.
- The Co-Director of Enforcement for the US Securities and Exchange Commission (SEC), Stephanie Avakian, vowed in a speech Thursday that the regulatory agency is going to practice more substantial enforcement of illegal ICOs. Avakian went on to mention that ICO’s are often high-risk investments masked by unrealistic assurances.
- The New York Office of the Attorney General released a report indicating cryptocurrency trading platforms are vulnerable to market manipulation while referring several exchanges to another agency for possible violations of state laws. The New York Attorney General’s (NYAG) initial inquiry began in April, seeking voluntary cooperation from 13 of the world’s largest cypto trading sites, including Coinbase, Karaken, and Binance. Some of these exchanges would go on to say, “it was impossible” to prevent market manipulation while the NYAG’s report pointed out that exchanges like Gemini are seeking to monitor exchanges more effectively.
- The President of the European Central Bank (ECB), Mario Draghi, said that the ECB, “has no plans” of issuing a unified digital currency, while speaking in front of European Parliament. In citing reasons for why the ECB will not issue a digital currency, Draghi said that an EU digital currency would put the ECB and private banks in direct competition and it would cause the ECB to take on substantial operational costs and risks.
- The Texas State Securities Board, a regulating body in the state of Texas, has issued an emergency action to halt investments in three cryptocurrency related schemes. The regulating body issued cease and desist orders to Coins Miner Investment Ltd, DigitalBank Ltd, and Ultimate Assets. Ultimate Assets, specifically, has promoted misleading advertisements that promise Texans an initial investment of USD$1,000 would grow to USD$10,000 in just three weeks.
- The Ukranian parliament is considering taxing residents for cryptocurrency related profits, according to Coindesk. Lawmakers proposed framework that would implement a 5% tax on any crypto-related profits. This tax rate would jump to 18%, beginning January 1st, 2024.
- The US Securities and Exchange Commission (SEC) requested further comments regarding its decision on the listing and trading of a Bitcoin exchange traded fund (ETF) in a release Thursday. The Bitcoin ETF is backed by investment firm VanEck and financial company SolidX, with the initial request filed on June 6th of this year. In the SEC’s release, the regulating authority notes that it has not reached any conclusions on the Bitcoin ETF and asks for interested parties to send comments to the SEC in regards to the sufficiency and viability of a Bitcoin ETF. So far, the SEC has received over 1,400 letters.
- Venezuelan President Nicolas Maduro said in a television appearance that Venezuela will adopt the state-backed Petro Token in international trade. While it is unclear in which sectors of global trade Venezuela will use the Petro Token, economists and analysts have doubts whether the token will be accepted by international markets.
- A candidate for a local government position in Taiwan has made history, becoming the first politician ever to receive a campaign donation in Bitcoin. Hsiao Hsin-chen, who is running for a seat on Taipei’s City Council with the New Power Party ticket, received a donation in Bitcoin worth about USD$325 a month after the party announced it would accept cryptocurrency donations.
- A new botnet was discovered by security researchers that, as opposed to posing a threat, is seeking to destroy crypto-mining malware. The botnet was discovered by a team at Qihoo 360Netlab where they deduced that the botnet is seeking out a malware known as com.ufo.miner.
- According to a crypto jacking report by Cyber Threat Alliance, cryptocurrency mining malware detection is up 459% in 2018. An article by Bloomberg attributes the rise in malware detection to infamous global cyberattacks like WannaCry and NotPetya, which utilized stolen code from the US National Security Agency.
- According to a research study conducted by blockchain researcher Alex Lebed and crypto consultant Alexey Akhunov, the implementation of recently launched Gemini Dollar (GUSD) can be changed by a Gemini custodian every 48 hours. In reviewing GUSD’s white paper, the code of GUSD’s smart contracts are able to be changed every 48 hours to become non-transferrable or frozen at any moment. The white paper cites a need for the ability to manage token transfers in case of unforeseen circumstances.
- According to an industry analysis newsletter, Diar, a majority of Bitcoin (BTC) in circulation are stored in investment wallets. The newsletter reports that 55% of BTC are currently kept in wallets with an individual average wallet value more than USD$1.3 million. About one-third of these wallets have not been used since BTC’s price peaked in 2017, due to either lost private keys, lowering real supply, or simply strong resolve by cryptocurrency believers.
- After US crypto exchange, Coinbase, rebuked claims in a report by the New York Office of the Attorney General, crypto exchange Kraken has done the same. Kraken tweeted today that, “We must... object to the highly unprofessional/malicious implication that because we did not respond to the voluntary information request, we *might* be operating illegally. We told you we don’t operate in NY.” Meanwhile, Coinbase challenged claims that 20% of its exchange’s trade volume came from its own staff, saying the figure was “misreported.”
- Bancor, which is one of the most popular and valuable decentralized applications on the ethereum blockchain, is reportedly expanding to the EOS blockchain. As per a company announcement, Bancor’s ability to allow users to trade a variety of ethereum-based tokens without depositing funds will be brought to the EOS blockchain. According to the company announcement, Bancor is evolving into a cross-chain liquidity protocol that will help with the expansion.
- Bitcoin Core released an update Tuesday to patch a recently discovered vulnerability in its software. The vulnerability could have potentially crashed older versions of Bitcoin Core if a miner decided to exploit it by processing a block transaction that tries to spend the same amount twice, which would cost the miner about USD$80,000 (12.5 BTC). The new update includes a feature that enables the software to “quietly reject” invalid blocks created by miners, eliminating the possibility of a potential crash.
- Bitcoin’s hashpower has doubled since just before the start of the summer, despite cryptocurrencies observing a largely bear market. Fundstrat analyst, Sam Doctor, believes that the reason for mining hashpower growing despite price declines is because miners are trying to position themselves for the future, despite losing out on currency profits. Furthermore, this implies that the Bitcoin mining community believe in the success of Bitcoin for the long-term.
- Bitfury Group announced Wednesday that it has developed a new, more efficient Bitcoin mining chip. According to CEO Valery Vavilov, Bitfury’s application-specific integrated circuit (ASIC) chip, “offers the strongest performance among Bitcoin mining chips and is unparalleled in efficiency.”
- Creator of Ecash and one of the founders of the cypherpunk movement, David Chaum, revealed to CoinDesk plans of a “reinvented” cryptocurrency that fixes problems of speed, privacy, and scalability. Chaum believes that he has made two blockchain breakthroughs: the first, to change digital signatures to carry out verification “in advanced”; and second, to utilize something called “multi-party computations” to increase anonymity.
- Despite banning cryptocurrencies, China has seen a spike in offerings of cryptocurrency custody services. For example, InVault a Chinese startup that offers crypto custody services, specifically marketing to crypto exchanges. A crypto custodian would hold a client’s assets for safekeeping, but Chine could potentially disallow any mainland organization that is either holding virtual currencies or holding assets that belong to other companies that have no legal standing in China’s mainland.
- Kenetic, a Hong-Kong based crypto firm, and Tora, a trading systems firm, are launching a joint-venture that would give institutional cryptocurrency traders better analytic tools. Dubbed Caspian, the project has already raised USD$16 million in funding from a token pre-sale. Some institutional investors include Kenetic, Galaxy Investment Partners, and Techemy Capital.
- LINE, a messaging app giant from Japan, unveiled plans to launch an ambitious token-powered ecosystem by 2018’s end. LINE hopes to capitalize on its massive pre-existing user base of 160 million monthly active users with a plan centered around its previously announced LINK token. LINK is meant to serve as a fuel for the wide range of consumer facing applications LINE plans to offer, such as restaurant payment or the serving of online content.
- Notable cryptocurrency hedge fund, Multicoin Capital, said in a report that Litecoin (LTC) is a, “significantly overvalued relic.” In the report, Multicoin detailed that LTC faces a variety of negative catalysts with no bull case. The report goes on to mention that LTC’s bull run in 2017 stemmed largely from retail investors and immaturity in the cryptocurrency market. Multicoin Capital is short on Litecoin.
- New York University (NYU) has reportedly become the first college in the US to offer a major in blockchain technology. According to a report by CBS, NYU’s Stern School of Business will offer the major after becoming one of the first business schools to offer undergraduate courses in cryptocurrencies and blockchain last year.
- Palestinians have flocked to cryptocurrencies like Bitcoin in order to invest abroad or shop online, according to a report by Coindesk. Ahmed Ismail, a financial analyst in Gaza, said there are at least 20 unofficial exchange offices dealing with cryptos in Palestine, while he himself helps about 30 clients invest abroad and shop online by purchasing Bitcoin.
- Play2Live, a streaming platform for gamers and eSports fans, announced the launch of an open-beta of their blockchain streaming platform. Play2Live discussed participants’ ability to partake in monetization schemes, saying, “Everybody can be a part of the peer-to-peer interaction, and everybody, even the viewer, is able to earn money.”
- Ripple’s head of regulatory relations for Asia-Pacific and the Middle East, Sagar Sarbhai, told CNBC that Ripple is making strides towards the commercial launch of its product, xRapid. xRapid is a real-time settlement platform designed specifically for speedy international payments, and CNBC believes Ripple could launch xRapid within the next month. Backed by XRP tokens, xRapid would minimize liquidity costs while speeding up transaction times for cross-border payments.
- Tether, the world’s eighth largest cryptocurency and second most traded coin, faced serious technical problems as transactions froze for about eight hours Tuesday. The USD-pegged stablecoin faced issues after the engine that feeds the coin’s data from its underlying Omni protocol stopped working. The stablecoin dipped about 2% immediately following trading coming back online, a significant amount for a stablecoin.
- The founder of the world’s second largest cryptocurrency exchange, OKEx, was allegedly detained in China in relation to suspected digital currency fraud last Tuesday, according to local news outlet Sina News. Founder Star Xu was arrested after investors in WFEE Coin, a company where Xu is a shareholder, complained to police about the company’s alleged fraudulent practices. OKEx saw an almost 3% drop in trading volume over the 24-hour period following Xu’s arrest.
- The Korean Customs Service (KCS) and Samsung SDS have agreed to implement Samsung’s blockchain technology in an exports customs clearance system. A memorandum of understanding has been signed by the two entities, and sees 48 other organizations join the agreement, including government organizations, shipping operations, and logistics firms.
- The second major crypto theft in Japan this year occurred Friday, September 14th when hackers stole 6.7 billion yen ($60 million) in crypto assets from the wallets of crypto exchange, Zaif. Hackers managed to break into hot wallets (online, connected wallets) containing Bitcoin, Bitcoin Cash, and Monacoin, stealing 4.5 billion yen ($40 million) of crypto assets that belonged to customers. The hack was not detected until the following Monday, September 17th. Zaif has agreed to pay full restitutions to customers.
- Tezos’ native token, XTZ, saw gains of over 30% this weekend in anticipation of the networks official launch today, Monday. XTZ began to see price gains after developers tweeted that Tezos’ leaves beta and officially launches Monday. Trading volumes of XTZ also jumped 169% on Friday, touching a nine-week high of USD$5.13 million. The Tezoz project raised USD$232 million via ICO in July 2017.
*Data in Price Return and Updated Real-Time (with a delay), Source: StockDio