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Cryptocurrency Morning Brief

Jul 02, 2018

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  • Thailand has written the Digital Asset Business Decree, which defines cryptocurrencies as a medium of exchanging goods and digital tokens as the right to participate in an investment or to receive specific goods. The country has also laid out regulations for businesses that operate as exchanges, brokers or dealers. Interestingly, Thailand has required that all ICOs or crypto-to-crypto trades must be paired with seven cryptocurrencies. The cryptos are: Bitcoin, Ethereum, Bitcoin Cash, Ethereum Classic, Litecoin, Ripple or Stellar. The cryptos were selected due to liquidity and convertibility to the fiat Thai Baht.
  • The US Securities and Exchange Commission (SEC) approved plans for public comment which would allow investment companies to bring new ETFs to the market which invest in blockchain companies. The proposed changes indicate that ETFs launches do not need to seek special permission from the SEC if the ETF is considered a plain vanilla ETF.  An exotic ETF would come under greater scrutiny if the ETF operates with leverage. Speculation has arisen that blockchain based ETFs, those which the constituents are public equities involved in the blockchain space, would be considered a plain vanilla ETF and would not face deep scrutiny when proposed. In contrast, proposed ETFs that invest in cryptocurrencies would most likely be challenged by the SEC
  • The Huobi Group, has announced that it is opening an office in London. Additionally, the firm will be opening Huobi OTC and Huobi Quant Trading. The two trading programs will be geared towards “master crypto-traders” who trade large amounts of cryptocurrencies. Huobi stated that trading large amounts of cryptocurrencies over-the-counter is much safe rather than on an exchange due to the difference in price stability. The OTC service will have a zero percent commission fee. The exchange’s Quant Trading service will feature a trading platform for quantitative traders to perform arbitrage, market making and trend predictions.
  • Cryptocurrency exchange Kraken has responded to a recent Bloomberg article that argues Tether (USDT) is being manipulated on their exchange. Kraken’s response claimed that Bloomberg’s article was written to influence the price of futures trading. The Bloomberg article claimed that data from Tether trading on Kraken raised red flags for regulators on June 29. Kraken indicated that the Bloomberg article aimed to manipulate markets because it was written on the last business day of trading for Q2’2018 – before expiration date of many futures contracts
  • Huobi’s HADAX cryptocurrency exchange platform published an update last week called “HADAX Super Nodes and Voting Rules Updates and Subsequent Arrangements” which detailed that HADAX will rely on two separate groups of funds to assist with the decision of new listings. The cryptocurrency exchange launched HADAX this year which allows users to vote, using the HT token, on whether new assets can be listed on the platform for trading. Additionally, the exchange introduced a mechanism that allows venture capital firms to serve as super nodes which helps HADAX screen tokens before a primary vote. The new update will now require that all projects be supported by the venture capital nodes, or the Standing Nodes.
  • The Virginia Pilot reported that Bitcoin ATMs are becoming more popular in the US, especially in US inner cites. According to the Virginia Pilot, there are 80 Bitcoin ATMs in Detroit and now 2,032 across the country. There is speculation that individuals using Bitcoin ATMs are likely to not have bank accounts. John Sedunov, professor of finance at Villanova University has said that bitcoin ATMs may lead to the view that bitcoin machines are like lottery tickets for users. The professor speculates that users are hoping for big returns on their hundred-dollar investments