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Cryptocurrency Morning Brief

Jun 22, 2018

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  • Japans financial regulator, the Financial Services Agency (FSA), has issued business improvement orders to six of the country’s cryptocurrency exchanges. The following exchanges received the improvement orders: Bitflyer, Tech Bureau, Bitpoint Japan, Btcbox, Bitbank and Quoine. Bitflyer is Japan’s largest cryptocurrency exchange by volume. The orders mentioned that “an effective management system has not been established to ensure proper and reliable operations of the business, as well as countermeasures against money laundering and terrorist financing”. Upon receiving this news, Bitflyer has stopped accepting new accounts.
  • Reality Shares is launching China’s first blockchain ETF. Investors will have access to Chinese companies that participate or invest in the blockchain space. Businesses will have to qualify for Reality Share’s BCNA Index. Reality Shares will use a proprietary Blockchain Score methodology, based on a quantitative process which evaluates the potential of blockchain businesses. The fund will be made up of 31 constituents and be rebalanced semi-annually.
  • Venture capital (VC) firms are exploring ways to restructure legally and financially to tap into cryptocurrency investments. The contemplated restructuring addresses VC firm’s limitations on holding more than 20% of investments in liquid investments. Andreesen Horowitz, has created a separate pool of capital specifically for investments in the cryptocurrency space. Some other VC firms that have not made structural changes to their firm have been able to hold some cryptocurrencies or invest in ICOs.
  • VeChain has revealed new partnerships with DB Schenker and PwC ahead of its mainnet launch. The protocol has posted its official launch schedule to Twitter. The cryptocurrency community has been said to be confused on how to convert the outstanding VEN tokens to the new VET tokens that the protocol will use. It is expected that most exchanges will handle the token conversion. Additionally, users can transfer their previous VEN tokens to a new wallet released by VeChain for proper conversion. For every VEN token in circulation, one hundred VET tokens will be created.
  • Charles Hoskinson, founder of Ethereum and Cardano, tweeted that “tens of trillions of dollars [will enter] the space” from Wall Street firms once regulatory issues are settled. Recently, Goldman Sachs solidified rumors of Wall Street’s first digital asset trading desk. Additionally, Susquehanna International Group mentioned that “regulatory clarity will allow institutions to come in more than anything else because institutions don’t like to invest into uncertainty. So, we’re just taking the most conservative approach we can”.
  • The South Korean government will invest USD$9mm to support blockchain development in the country with the goal of implementing six pilots using blockchain technology. The country’s Ministry of Science and ICT published its blockchain strategy Thursday. The USD$9mm will be invested by the end of 2019. The government mentioned that it will focus on: livestock supply chain management, customs clearance, online voting, real estate transactions, cross-border e-document distributions and shipping logistics. Additionally, the country will invest USD$720,000 for up to six years on expanding a blockchain research center.