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Cryptocurrency Morning Brief

May 24, 2018

  • The US Department of Justice has reportedly launched a criminal investigation into cryptocurrency traders who may have manipulated the market with old-school illicit tactics, such as spoofing. The investigation is also being conducted with the Commodity and Futures Trading Commission (CFTC). Another target of the investigation is crypto traders who sent themselves large volumes of orders to create a mirage of increased demand to lure other investors to make a move in the market

  • American Express is exploring using blockchain technology to increase security for both users and merchants. The firm is exploring an identity wallet and whether blockchain can be used. Also, a hyperledger blockchain technology may be developed to allow merchants to create their own rewards programs that are tailor-made for individual cardholders.

  • Russian State Duma has approved its first reading of a legislation package that regulates crypto-related matters and activities. The legal texts will open the way for legalization of cryptocurrencies in the Russian Federation, including their exchange and circulation under certain conditions. The new legislation defines legal concepts like “digital rights” and “smart contracts” and defines cryptocurrencies and tokens as property, not legal tender.

  • Revolut, a British based company that created the first app to allow customers to invest in Bitcoin, has announced it will be adding Ripple (XRP) and Bitcoin Cash (BCH) to its platform. Revolut began as an app allowing users to transfer fiat currencies, but now has four cryptocurrencies on its platform. Additionally, the firm raised USD$250mm and its valuation is now USD$1.7bn. The fundraising was led by DST Investment, based in Hong Kong, which was an early supporter of Facebook and Spotify

  • Banks are losing international payments business. Banks have lost 40% of market share for consumer-to-consumer (C2C) cross border payments to non-banks over the last year. Banks have also lost 30% of the consumer-to-business (C2B) and 5% of the business-to-business (B2B) payments market over the last year. Blockchain technology as it is adopted by non bank FX players will be even stronger competitors. Cryptocurrencies may chip away at bank market share; however, cryptos do not have liquidity and scalability at this time to be a major force in global FX markets

  • Japanese IT giant, GMO Internet is set to roll out the world’s first bitcoin mining device based on 7nm chips within the year. The firm is launching a new B2 miner on June 6 with mass production to follow and shipment starting by the end of October. The device will provide high-levels of hashing power with lower electricity demand.

  • US options exchanged backed by Canada’s TMX Group said it will team up with online retailer to create the first regulated exchange for security tokens, which are essentially digital versions of stocks. Supporters say the tokens could transform the way startups raise money by allowing them to bypass venture-capital firms and effectively sell shares over the internet