Last year in November, 35 year old Louis Meza kidnapped his friend with the help of three gang members to steal the victim’s crypto holdings. In December 2017, Meza was charged with kidnapping and robbing the victim by Manhattan prosecutors. At that time, video footage of the incident was used to capture Meza, however, the rest of the suspects were nowhere to be found.

This week, however, the New York Daily News reported that Bronx biker gang members Cesar Guzman (Fuego), Allan Nunez (Joker) and Darrell Colon (Bishop) were prosecuted for helping Meza in the ether heist.

According to Assistant District Attorney James Vinocur, Meza chose the victim while Guzman recruited the other two members.

Meza asked the victim to enter the minivan posing as an Uber. Once the individual stepped into the vehicle, they were held at gunpoint by Colon who was hiding behind the rear seat of the car. Nunez was responsible for driving the car until the victim revealed their ethereum wallet’s password to the criminals. After about two hours, the individual gave in and surveillance cameras captured Guzman and Mez entering the victim’s house and stealing $2 million worth of ether.

Luckily, law enforcement officers were able to retrieve majority of the cryptocurrency. Rob Georges, Guzman’s attorney, argued that Guzman worked for charity in Bronx and presented a document proving his “good character” from the member of the City Council. He added that Guzman should receive minimum bail because even Harvey Weinstein, a Hollywood producer charged with rape and sexual assault, had to pay a small amount of bail from his net income. The three gang members plead not guilty to the accusations and are being held on $50,000 bail per person.

Crypto-related crimes have increased with time – from demanding cryptocurrency by hacking into banks to sending phishing emails and selling user information — criminals are constantly trying to find different ways to trick people.

Speaking about the relation between these attacks and cryptocurrency’s price change, Cyrus Roberts Vance Jr., New York County District Attorney, said, “Investors aren’t the only ones tracking the fluctuating values of digital currencies — everyone from sophisticated cybercriminals to old-school shakedown-and-stick-up scammers are keeping a close eye, too.”

https://www.ccn.com/bronx-biker-gang-charged-in-2-million-crypto-kidnapping/

Regulated Cryptocurrency Custody Will Bring in Big Money: Hedge Fund Manager.

Anyone who stays in the crypto-space long enough begins to recognize the familiar mantras.

“Don’t invest more than you can afford to lose.”

“We’re in the early days of the internet.”

“Adoption is coming.”

They’re all valid points, and currently the latter is being held back by lack of regulation and typical financial services, keeping cryptocurrency on the sidelines of the global financial markets as a fringe space, a risky investment with no guarantees and no oversight or protective measures.

Hedge fund managerKyle Samani told Bloomberg in a phone interview:

“There are a lot of investors where custodianship was the final barrier. Over the next year, the market will come to recognize that custodianship is a solved problem. This will unlock a big wave of capital.”

Samani has been testing Coinbase Inc’s new custody service, one of many being launched throughout the ecosystem. The Korean authorities recently admitted to delaying crypto-regulation simply to avoid further legitimizing the movement, but regulation is on the way and the financial services and so too are the protections and safety mechanisms enjoyed by those in the traditional banking system.

Global financial services group Nomura recently launched institutional-grade custody services for cryptocurrency assets, and earlier this year BitGo acquired Kingdom Trust, a $12 billion asset manager to act as custodian for their assets with talks of BitGo even becoming an independent custodian in future.

While these services may be seen by some as centralized and/or requiring trust, the kind of phenomena many turn to the crypto-space to avoid, these optional safeguards are necessary for increasing the level of institutional investment.

Bringing in the Whales
Regulated custody services allow institutional traders to open huge positions on the stock market without having to take personal responsibility over the custody of the funds. This allows hedge funds to give their traders millions of dollars without risking them flying to the Bahamas with it, and it helps prevent outside theft and accidental losses as well, essentially acting as an insurance policy for the millions and billions being traded every day.

Similar options are currently limited in the cryptocurrency space and institutions wishing to send their traders into the fray have to accept major risks in doing so. It’s difficult to track crypto assets, even more difficult to return them, and sending funds to the wrong address will usually result in their permanent loss, all of which is new and unfamiliar territory for some. Traders from major firms operating in the crypto markets are currently in personal control of huge amounts of money in a space rife with hacking and phishing scams with little to no regulatory oversight to protect investors.

With high levels of security come high fees – Coinbase charges $100,000 for setting up custody services at the moment along with 10 basis points per month and a minimum balance of $10 million. The funds are held in cold storage and require up to two days to remove due to the various security protocols that need to be bypassed, a far sight from simply storing funds on a paper wallet. However, once major firms begin to trust the new and secure infrastructure being developed, major investments will follow.

The cryptocurrency market cap is currently $275 billion compared to a global stock market cap of approximately $100 trillion. In order to grow the cryptocurrency space, institutional investment is needed. With crypto-startups exploring custodianship along with existing Wall Street custodians like Jp Morgan, Northern Trust, and Bank of New York considering expanding their services to the world of crypto, it seems like a matter of time before the level of investment in the space changes dramatically.

https://www.ccn.com/regulated-cryptocurrency-custody-will-bring-in-big-money-hedge-fund-manager/

Jeff Garzik, one of the earliest Bitcoin developers, has formally launched an altcoin, dubbed Metronome, which backers allege will be the first cryptocurrency to offer “institutional class” endurance.

Metronome had first been announced by Bloq, Garzik’s blockchain development firm, back in Oct. 2017, when the cryptocurrency market was in the early stages of a parabolic fourth-quarter rally.

The announcement was quite controversial at the time, particularly since Garzik was also the chief developer for SegWit2x, a bitcoin scaling upgrade that caused a sharp divide within the cryptocurrency community and ultimately failed to activate when its planned launch date arrived in November.

Metronome’s selling point is that — using a system of smart contracts — tokens can be exported and imported across a variety of different blockchains without altering the total MET supply. Bloq boasts that this ensures that Metronome will last for “generations,” even if individual underlying blockchain networks fade into obscurity.

“Institutional investors should be very excited to see something like this,” co-founder Matthew Roszak said last year. “We’ve built a thousand-year cryptocurrency, something that’s built to last.”

For his part, Garzik — who first contributed to the Bitcoin codebase in 2010 but has not contributed to the Bitcoin Core repository since 2015 —  has said that Metronome is the cryptocurrency he would have built if given a clean slate.

“Today, bitcoin faces existential threats from forks, developer drama and so on. Knowing what we know and having a clean sheet of paper, we asked what would we build and the answer is this.”

Unlike most initial coin offerings (ICOs), metronome is being distributed through a descending price auction, meaning that the crowdsale price decreases over time until no more tokens are remaining. Developers argue that this will reduce FOMO-driven buying and help with price discovery.

Consequently, contributions have been slim during the early hours of the crowdsale, with at least several investors stating on social media that they misunderstood the terms of the sale and thought that the price would go up — not down — as time passed.

As of the time of writing, just 87 of the 8 million MET had been sold, with the price floating at just above 1.85 ETH per token. However, the pace of contributions will likely quicken as the price declines over the next several days.

https://www.ccn.com/early-bitcoin-developer-jeff-garzik-launches-new-altcoin-metronome/

One of 17 institutions chosen for Ripple’s $50 million academic pledge, the University of Texas at Austin will receive $2 million from San Francisco-based industry giant Ripple.

The McCombs School of Business at UT will receive $2 million from Ripple over the next five years to fund research at the institution’s Blockchain Initiative program, a report by university student newspaper The Daily Texan has revealed.

McCombs hosted its first blockchain conference in April 2018 to much interest among faculty and students from different universities including its own, the report suggested, pointing to an increasing demand and appetite to explore the decentralized technology commonly associated with cryptocurrencies like bitcoin. The conference was attended by 300 people, including Ripple executives, students and staff. Notable attendees included Goldman Sachs’ senior FinTech equity researcher Jim Schneider and Walmart vice president of food safety Frank Yiannas who delivered keynotes alongside other panelists from USAA, the SEC, ICE and IBM.

“That [conference] was the catalyst for really seeing that there was a lot of demand from students and industries and companies for having a central focus inside the business school to basically harness the demand for blockchain technology,” program director Cesare Fracassi said.

The initiative lays out three main objectives behind its foundation, namely supporting faculty and graduate students on blockchain research “across colleges” at UT, teach students “the main concepts related to blockchain, cryptocurrency and digital payments”, and be “the hub of knowledge for external relations” with the industry, policymakers and media.

While relatively new, McCombs’ Blockchain Initiative will use the funding from Ripple to finance projects, research and outreach programs that connect students to companies in the city, Fracassi added.

He stated:

Austin is a pretty large hub (for) blockchain technology companies, so I see the initiative as a way to link faculty and students to those companies.

The subject of blockchain technology is also being taught “in several classes” at McCombs with students learning about the “technological, legal and business opportunities and challenges” faced in the rollout of blockchain-powered solutions.

The funding is part of Ripple’s broader $50 million pledge to fund academic blockchain research in seventeen universities around the world. As reported by CCN, the University Blockchain Research Initiative (UBRI) includes universities in Australia, Brazil, Canada, Cyprus, India, Luxembourg, the United Kingdom, Netherlands, Korea and the United States.

https://www.ccn.com/ripple-donates-2-million-to-texas-universitys-blockchain-initiative/

Ever since the arrival of Bitcoin, many people have predicted that “soon” all of the cryptocurrencies will crash. The trends in cryptocurrencies have been compared to global events such as tulipmania, the 1929 stock market crash and the dotcom bubble. However, even after the recent fall in crypto prices, the industry continues to attract new investors.

This time, Yoni Assia, CEO of trading platform eToro, has picked up the dotcom bubble analogy. However, instead of speaking against the technology, Assia has chosen a different path. In an interview with Bloomberg, Assia said that 90% of the crypto startups will “end as nothing” but he believes that these startups have a bigger platform than the ones in the dotcom bubble.

From 1995 to 2000, people invested heavily in “.com” companies which were often formed without proper business models. Nowadays, people can come up with new ideas that can be recorded on a whitepaper for the entire world to read. Since these inventions are creative, millionaires invest in initial coin offerings (ICOs). Even if 1,000 of them contribute $10,000 individually, the entire project can raise $10 million within a short amount of time. For instance, web browser Brave raised $35 million in under 30 seconds last year.

Assia further explained that blockchain appears to be as transformative as the internet was. “Tesla made 2,000%, Facebook made 1,000%, Google made 1,000%. This is the same thing but earlier in the cycle,” said Assia.

After introducing iPods, iBook and improving the Mac OS from 2001 to 2005, Apple’s stock started increasing gradually. Assia stated that currently investing in crypto is a decision people have to make on their own.

“My long-term view is selling crypto now is like selling Apple in 2001,” said Assia, “You do it if you have to do it, you don’t do it if you don’t have to do it”.

Assia concluded by pointing out that once someone learns about blockchain technology, they want the entire world to use it. Rightfully so, blockchain provides transparency and decentralization, which when implemented in medical and engineering industries and electoral systems, can solve many problems. Blockchain advocates are working day and night to improve this technology to turn these ideas into reality somewhere in the near future. Until then, we have to wait and see which crypto companies will be worth the investment.

https://www.ccn.com/selling-crypto-now-is-like-selling-apple-in-2001-etoro-ceo/

SEC Statement on Ether ‘Clears Stumbling Block’ for Ethereum Futures: CBOE President.

A top executive at the first US exchange to list bitcoin futures contracts said that the Securities and Exchange Commission’s statement that ether will not be regulated as a security will help pave the way for exchanges to list ethereum futures.

CBOE Global Markets President Chris Concannon made this comment in a statement quoted by  Bloomberg, predicting that this regulatory clarity will make the Commodity Futures Trading Commission (CFTC) more likely to approve the listing of ethereum futures, a product that would provide investors with exposure to ether’s price movements without custodial risk.

“We are pleased with the SEC’s decision to provide clarity with respect to current Ether transactions,” Concannon said. “This announcement clears a key stumbling block for Ether futures, the case for which we’ve been considering since we launched the first Bitcoin futures in December 2017.”

As CCN reported, SEC Director William Hinman revealed on Thursday that the agency did not intend to regulate ether — the native asset of the Ethereum network — as a security.

Hinman, who heads the SEC’s division of corporate finance, said that, despite how ether was originally issued, the asset has become sufficiently decentralized that it no longer bears the hallmarks of a security.

“And putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions.”

In December, CBOE and fellow Chicago exchange CME listed bitcoin futures, and both have hinted a desire to list more cryptocurrency derivatives products. However, regulatory uncertainty surrounding the status of other cryptoassets has slowed this process.

Earlier this year, CME partnered with a group of cryptocurrency exchanges to create a real-time ethereum price index and benchmark. The move was widely viewed as a stepping stone toward the eventual launch of an ethereum futures product, and the exchange operator confirmed that it was gauging client interest in eventually creating a market for this product.

https://www.ccn.com/sec-statement-on-ether-clears-stumbling-block-for-ethereum-futures-cboe-president/

Billionaire Investor Explains Why Bitcoin Price Will Hit $250,000 by 2022.

Billionaire venture capitalist and investor Tim Draper has long been one of cryptocurrency’s biggest bulls, and that has not changed during the first half of 2018, even as the bitcoin price has sunk more than 67 percent from its all-time high.

Draper, as CCN reported, has predicted that the bitcoin price will reach $250,000 by 2022, a far cry from the estimated $650 per coin that he paid in 2014 when he won nearly 30,000 BTC from the US Marshals Service in the famous Silk Road auction.

Speaking with financial publication  TheStreet, Draper said that the recent market downturn has not caused his confidence in that forecast to waver.

“Price-wise, we’ll continue to see Bitcoin move higher. I’ve revised my estimate up to $250,000 four years out, so we’ll see Bitcoin trade around the $250,000 mark in 2022.”

Draper said that he is basing this bet on the expectation that cryptocurrencies — he’s invested in more than just bitcoin — will “increase the velocity of money” such that the global currency market will hit $140 trillion within the next decade.

“I expect that since cryptocurrencies will increase the velocity of money, the current $86 trillion global market for currency will grow to be about $140 trillion in the next 10 years, and that growth will be in crypto. In fact, I estimate that fiat currencies will actually decrease in use, and that crypto will become as much as $100 trillion of that market. I expect Bitcoin to be about 10% of that market, or $10 trillion. There is a lot of room to grow there.”

Draper, who is also behind a high-profile plan to divide California into three states (the initiative will appear on the ballot this November), said that he expects the world is on the cusp of a massive shift toward adopting cryptocurrencies, not just as a store of value, but as an instrument for everyday payments.

The recent bitcoin price decline has not swayed Tim Draper’s confidence in his bullish 2022 prediction.

“I believe that in about four years there will be a big change when people start paying in cryptocurrency. It used to be the case that the Bitcoin block was too slow to make small transactions, so it was better as a store of value. But what is happening is that as time goes on, more technologies make it easier for us to use,” he said, referencing second-layer scaling solutions such as the Lightning Network and altcoins such as bitcoin cash.

“Fiat currency will eventually become as passé as trying to pay for coffee with pennies.”

But regardless of where the bitcoin price ends up, Draper says that he has no intention to sell his coins. That, he remarked, would be returning to the past.

“I have no interest in selling my Bitcoin. What would I sell it into anyway? Moving from crypto to fiat is like trading shells for gold. It is reverting to the past,” he concluded. “I’m thinking long term I’ll use it, spend it, invest it, or just keep it.”

https://www.ccn.com/billionaire-investor-explains-why-bitcoin-price-will-hit-250000-by-2022/

BitLicense Charter Recipient itBit Will Become First New York Exchange to List Stellar.

Institutional cryptocurrency exchange and BitLicense charter recipient itBit has announced that it has received approval from the New York Department of Financial Services (NYDFS) to list four new cryptocurrencies: ethereum (ETH), bitcoin cash (BCH), litecoin (LTC), and stellar (XLM).

ItBit, which says it operates the second-largest US bitcoin trading platform by total volume, announced on Thursday that the NYDFS had approved its request to list these assets, including Stellar’s lumens token, which has not yet been available on any New York-based exchange.

In addition to its professional cryptocurrency exchange — which is only available to institutions and other high volume traders — itBit operates an over-the-counter (OTC) trading desk and provides investors with qualified custodial services. Clients will now have access to ETH, BCH, LTC, and XLM across all of those platforms.

“This is an important milestone for itBit as we create a broader platform for crypto asset investors. We are committed to the growth and evolution of this ecosystem and DFS approval allows us to offer more trading and custody services across a wider range of crypto assets,” said Chad Cascarilla, CEO of itBit. “Regulatory oversight and security have always been at the forefront of building our platform. We are thrilled to be able to offer these new services to our customers.”

As CCN has reported, just five companies have received a BitLicense from the NYDFS, which oversees one of the most restrictive cryptocurrency regulatory frameworks in North America. While itBit has not received one of these licenses, it has received approval to operate in New York as a trust chartered company regulated by the NYDFS.

The state, an important hub for the global financial sector, has been described by cryptocurrency industry executives as a “crypto backwater,” while Maria T. Vallo, superintendent of the NYDFS, has criticized those who favor reduced regulation. “Toddlers play in the sandbox,” she said earlier this month. “Adults play by the rules.”

Andrew Chang, COO of itBit, said that gaining regulatory approval to list these four assets is a “critical moment” for enabling institutional investors to obtain deeper exposure to the cryptocurrency markets.

“By gaining this regulatory approval, we are now able to open the doors for individuals and institutions to access crypto assets beyond just Bitcoin,” he said. “This is a critical moment that will enable greater participation in these assets in a regulated and safe manner.”

Many cryptocurrency analysts have predicted that increased interest from institutional investors will fuel the market’s next bull run. However, institutions have yet to make meaningful investments in the space, and the bitcoin price has trended down throughout the year.

ItBit’s Cascarilla told CCN in an email interview that the cryptocurrency industry needs to provide institutions with “more reliability” to attract institutional capital into the ecosystem.

“The crypto space needs to offer more reliability (safety, connectivity and regulated status), products (new assets, collateral services) and features (more order types, etc),” he said.

Update 6/14: A previous version of this article incorrectly stated that itBit has a full BitLicense. It has been updated to reflect that the firm is a “trust chartered company regulate by the NYDFS” under the BitLicense.

https://www.ccn.com/bitlicense-recipient-itbit-will-become-first-new-york-exchange-to-list-stellar-xlm/

At a panel hosted this week at fintech conference Moneyconf, executives from Ledger, Blockchain.info, and VC firms Mosaic Ventures and FuturePerfect Ventures discussed if and why decentralized systems are truly necessary.

Crypto Wallet CEOs Speak at Moneyconf 2018

Moderator Joon Ian Wong referred the panelists to a survey indicating that given the hypothetical choice to have a paid version of Facebook that doesn’t harvest data or display ads, the majority of people would opt to use the free version and trade their data instead.

Wong put it to the panel that perhaps people don’t really want decentralized platforms after all. The panelists all had a lot to say, with founding partner Jalak Jobanputra of VC capital firm FuturePerfect Ventures citing lack of public understanding as the reason for the lack of mainstream interest, referring to election fraud and identity theft as major problems stemming from centralized data systems.

“I have a fund invested in several companies that are building decentralized identity platforms and once that becomes the norm we’ll wonder why we gave all our data away for free and allowed ourselves to be exposed in such ways.”

Toby Coppel of Mosaic Ventures pointed out that the inability of centralized leadership to arbitrarily change rules and alter agreements made decentralized platforms hugely attractive to investors.

Éric Larchevêque, Ledger CEO, pointed out that censorship was a major use case for decentralized platforms while Blockchain CEO Nick Cary said that opaque business practices, trade manipulation, and corruption were all factors in supporting decentralization.

Why Decentralization Matters

While the panel each had a different answer ready to go for that question, the next one left them all a bit stumped: how will decentralized systems make money?

There was a big pause from the panel over this question, with no one seeming to want to take it on first. The investors seemed to agree that at this time the jury’s still out on how exactly these platforms will generate revenue, although they did refer to the fat protocol theory as well as layering solutions that could work for revenue generation as well as advertising, etc.

Larchevêque boldly stated that speculation was currently the method used by decentralized projects to generate revenue.

“The biggest investment model of decentralization right now is speculation. I’m not saying it’s a bad thing, but it’s very early. A lot of the money is done by mining and an ICO is the objective… for that to work, you need infrastructure and then you have a few business models which are really working.”

“I think it may be a while before we see the real business model of the use cases for the platforms that are being built now,” he added.

Nick Cary of Blockchain agreed, saying that the ability to invest in project tokens, as well as the businesses themselves, was a valuable aspect of the crowdfunding market, although he did have some choice words to say about ICOs.

“Just because you do an ICO tomorrow and raise a tonne of money does not mean you will inevitably have some sort of incredible business. In fact, it may misalign your incentives to grind through the challenges in the early days.”

Cary went on to clarify that building infrastructure and hiring talented people costs money and that the model allowing people to invest in tokens and businesses was an interesting and useful one, agreeing with Larchevêque that the final business model allowing for decentralized revenue generation may be as of yet undecided, saying that the decentralized platforms pose a huge threat to their centralized platform.

“If I were to try to kill Facebook, what I would do is launch a social network with tokens that would allow all people that participate to earn income from the ad sales,” he concluded. “There’s some clever entrepreneur out there that’s going to figure this out.”

https://www.ccn.com/crypto-wallet-ceos-explain-why-decentralization-matters/

In an apparent step to increase liquidity and attract users, Japanese cryptocurrency exchange Bitbank has announced a bitcoin burrowing program.

One of Japan’s 16 full-licensed cryptocurrency exchanges, Bitbank offers eight cryptocurrency trading pairs and is ranked 31st in the world in terms of total daily traded volume.

Interestingly, Bitbank is seemingly stringent with its 12-month lock-in period.

Interestingly, the exchange’s rival GMO offers a much better deal for users with regards to a lock-in period – offering a three-month minimum timeframe for users who lend their bitcoin, and a 150-day timeframe for other virtual currencies, such as ether, ripple, and litecoin.

https://www.ccn.com/this-japanese-exchange-will-burrow-your-bitcoin-for-a-yearly-fee/

In spite of all the hype surrounding blockchain, proving the tangible benefits of the technology may be longer than some might expect, experts say, adding that the earliest viable applications will likely be in supply chain management, rather than financial services.

Anoop Nannra, head of the Cisco’s blockchain initiative, told CNBC that the American tech conglomerate stopped researching potential blockchain applications in the financial sector after 18 months, “because it will take a while for the many players in the complex markets to get up to speed.” They opted for research about applying the technology in supply chain management instead.

Their research up to now indicates another 10 years need to pass for blockchain to be prevalent in supply chain management, whereas financial services have to wait 25 years. “It’s anyone’s guess,” Nannra said. “When you’re trying to drive a mindset shift it’s almost a generational thing.”

However, Cowen, a financial services company, said a survey of 23 executives and experts in the field expect on average the technology will take 5.9 years to gain widespread adoption.

Meanwhile, Cisco's research also indicates that in a number of applications, blockchain may not be the best solution, instead adding another layer of complexity. Although it cuts costs and increases transaction efficiency because the technology eliminates the need for a third-party intermediary, such as a bank, the technology is not a magical solution to all problems.

Mark Smith, CEO of blockchain development company Symbiont, said the technology works best when there’s need for automating a process: “I think supply chain is going to be the first, if not near the first, to really show the value of blockchain. There aren't any regulatory questions in supply chain management that you have to deal with,” he told CNBC.

USD 945 million was spent on blockchain solutions in 2017 and the spending is expected to grow on a robust rate, reaching USD 9.2 billion in total by 2021, according to the International Data Corporation (IDC), a market intelligence firm.

https://cryptonews.com/news/supply-chain-might-be-first-to-show-value-of-blockchain-in-1-1942.htm

Within only a few days of each other, three crypto industry giants Binance, Huobi and Block.one all announced their launch of separate investment funds for blockchain-based systems. The move could mean a lifeline for struggling startups with groundbreaking ideas - if they can get the investors’ approval.

Binance, the biggest cryptocurrency exchange (with fees) by 24 hour trading volume as of the time of writing, has announced their intention to set up a "one-billion-dollar" Community Influence Fund and another Binance Ecosystem Fund with 20 future partners. Binance will provide financial support as an limited partner, as well as share incubation projects from Binance Labs, their blockchain incubator.

Members of the ecosystem will be given priority when recommending projects, and all investments will be made in Binance Coin (BNB). Applicants will, among other things, need to prove that they have USD 100 million assets under management (AUM) when applying.

Only a day after this announcement, Huobi - currently the third largest exchange (with fees) by 24 hour trading volume and Binance’s rival - came forward with news of a partnership with Chinese investment firm NewMargin Capital and South Korean securities firm Kiwoom Securities in launching an investment fund of USD 93 million. The fund will invest in blockchain companies in those two countries, bolstering collaboration between them.

Block.one, developer of the blockchain-based platform EOS, announced their partnership with SVK Crypto in launching a USD 50 million investment fund as well, that will invest in projects that are building on the EOS blockchain platform, focusing on decentralized applications (Dapps). This includes established or early-stage companies that have started exploring EOS or are building software on the platform.

To secure funds from such investors, applicants should look out for rules that are going to be published soon.

https://cryptonews.com/news/at-least-three-new-investment-funds-aim-to-bolster-the-crypt-1928.htm

Valuations in the initial coin offering (ICO) market are high and unreasonable and if the bubble bursts, it’s a good thing for the industry,
Ella Zhang, the head of Binance Labs, a blockchain incubator, founded by the Binance cryptocurrency exchange, told Bloomberg.

“We’d like the bubble to break,” Zhang added. While she’s not predicting any bubble bursts, she’s sure that the really good projects will emerge after that.

Zhang says she is helping Binance do something about the scams that have popped up as a result of the hype, with the so-called Cryptocurrency Governance Initiatives, or CGI. “The main purpose of this is to fight scams and sh*tcoins, and to boost crypto and blockchain technology,” she explained.

Binance will encourage funds and token teams it’s working with to join the initiative. Fund managers have to make sure not to participate in pump and dump schemes, whereas projects have to build exactly what their whitepapers say - if not, Binance will stop investing in them and will delist their tokens.

Binance Labce aims to incubate, invest and empower blockchain and cryptocurrency entrepreneurs, projects, and communities. Currently, Zhang is in charge of investing USD 1 billion in blockchain-related startups.

The average investment will range between USD 1 million and USD 10 million, and the fund has made four investments so far in both tokens and equity, which they plan to hold long-term, Zhang said. Members of the ecosystem will be given priority when recommending projects, and all investments will be made in Binance Coin (BNB).

https://cryptonews.com/news/binance-s-fund-head-we-d-like-the-ico-bubble-to-break-1937.htm

With a presence in 32 countries already, US cryptocurrency exchange Coinbase is expanding into Japan, one of the world’s biggest cryptocurrency markets.

In an announcement on Monday, San Francisco-based Coinbase confirmed the launch of an office in Japan and its plan to work “hand-in-hand” with the Financial Services Agency (FSA), the country’s financial regulator, to ensure it is compliant with local laws.

The long-awaited launch follows the company’s intended plan to enter Japan nearly two years ago in July 2016 when it raised $10.5 million from Japanese investors including the Mitsubishi UFJ Financial Group (MUFG) and the Bank of Tokyo-Mitsubishi UFJ (BMTU), Japan’s largest financial services group and bank respectively.

Coinbase said in its announcement:

“As in other markets, we plan to take a deliberate approach to our rollout in Japan, which means working hand-in-hand with the Japanese FSA to ensure compliance with local laws at every stage.”

Nao Kitazawa, a former investment banker at Morgan Stanley Japan, will lead Coinbase Japan as its chief executive. Nao is also on the board of the Fintech Association of Japan, an industry working group.

The marked foray into Japan is an obvious move for Coinbase, one of the world’s largest cryptocurrency exchanges, who’s only presence in Asia is in Singapore prior to its latest expansion effort.

Japan, notably, passed legislation in April 2017 to acknowledge and recognize cryptocurrencies like bitcoin as a payment method. The inclusive environment has seen a number of corporate giants including Yahoo Japan, messaging giant Line, mainstream online brokerage Monex and financial services giant SBI all investing in or operating their own cryptocurrency exchange in Japan.

Coinbase, for its part, is not only expanding into new markets — it is also building out its product line to meet the needs of a new type of customer: institutional investors. As CCN has reported, the firm has recently released a suite of products for institutions,  developed bank-grade custodial services, and launched a new asset management division.

https://www.ccn.com/cryptocurrency-exchange-giant-coinbase-is-officially-launching-in-japan/

Bitcoin Price Drops to $7,400; Retreat to $6,900 Likely as Market Bleeds

On yesterday’s report, CCN noted that the $7,700 mark is an important support level for bitcoin and if BTC fails to secure momentum above $7,700, a short-term decline to the $6,000 region is likely. Today, on June 5, bitcoin fell to $7,400, increasing the probability of a further drop to $6,900.

End of Another Corrective Rally
The failure to recover back to $7,700 speedily in the next 12 to 24 hours would signify the end of BTC’s most recent corrective rally. On April 12, BTC’s corrective rally extended from $6,900 to $9,900, but it ultimately came to an end after BTC failed to test the $10,000 support level.

Throughout April, the BTC price fell sharply from $11,700 to $6,900, leading investors to panic. The swift corrective rally of BTC from $6,900 to $9,900 convinced investors that the next bull rally of bitcoin is imminent. However, the low volume of BTC and the strong hand of bears disallowed bulls to take over the market, initiating yet another correction.

If BTC falls below the $7,200 mark in the next 24 hours, a drop to the $6,000 region is inevitable. If BTC falls to the higher end of the $6,000 region, a sudden surge in volume triggered by a corrective rally is a possible situation, similar to the rally of BTC on April 12. If BTC falls to the lower end of $6,000 by slowly bleeding out from the higher end of $6,900, it may result in BTC initiating a mid-term recovery throughout June, without a short-term bounce.

It is also possible for BTC to bounce strongly at $6,530, a region where the last corrective rally on April 12 was triggered. In early April, there were some notable spikes in volume that led investors to be optimistic about the short-term trend of BTC. As of recent, the volume of BTC has been substantially low, decreasing the probability of a short-term bounce back to the $8,000 region.

What is Causing the Bleed Out?
BTC is suffering from an intense downward trend and a sell-off from medium-sized investors and holders. The sell-off of investors is not being met with an increase in demand from both small and large-scale investors, as seen in the daily trading volume.

But, the cryptocurrency market is extremely volatile and the entrance of a few large-scale investors could sway the market, especially in a period like this wherein the volume of BTC remains quite low.

Ari Paul, the co-founder of Blocktower, a prominent cryptocurrency hedge fund founded by Paul along with Goldman Sachs executives, stated that institutional investors can only enter the market once proper custodian solutions are available.

“[Emergence of reliable custodian solutions] that will allow institutional inflows to start accelerating. Once a couple big traditional money managers announce that they’re including BTC as ‘digital gold’ in their portfolios, others will follow. Again, not instantly, but I think fairly quickly,” said Paul.

Until then, which could be three to six months from now, it is unlikely that the cryptocurrency market returns to the $500 billion region and BTC recovers to its previous all-time high.

It is also important to prevent recency bias from affecting trading calls. A drop to $6,900 for BTC could lead investors to panic, but a quick bounce as seen in on April 12, could lead BTC back to $8,000 in an instant.

https://www.ccn.com/bitcoin-price-drops-to-7400-retreat-to-6900-likely-as-market-bleeds/

How Bittrex Does Crypto-to-Fiat Trades When Other Cryptocurrency Exchanges Can’t.

According to Bill Shihara, the CEO at Bittrex, which remains as one of the very few cryptocurrency exchanges apart from South Korea’s Bithumb and UPbit that users can utilize to purchase tokens with fiat currency, stated that every single digital asset listed on Bittrex goes through a rigorous review process.

“For us, it is primarily about innovation. That’s what we are excited about. We have a very rigorous review process to go ahead and find the most innovative blockchain projects out there in the world. And a part of that process is not just making sure that the technology and the business models are innovative, we also look at the founders and principles behind the project,” Shihara said.

Shihara added that Bittrex works closely with every project listed on the platform and their lawyers alongside third party or independent law firms to prevent any potential regulatory conflict in the future between investors and local financial authorities. He added:

“We also put them through a compliance review. We work with their US-based lawyers as well as independent lawyers who double check to ensure that it is something we feel comfortable trading in the United States.”

Coinbase is Taking a Different Approach
Coinbase, another juggernaut exchange and cryptocurrency brokerage in the US, has taken a different approach in supporting tokens. Since its debut, Coinbase has been recognized as the largest cryptocurrency platform in the world, serving more than 20 million users and storing more than $20 billion in customer funds.

Despite its close connections to regulators, Coinbase has taken a different approach from Bittrex. Instead of collaborating with blockchain projects and their US-based lawyers to research the legality of their tokens, Coinbase acquired decentralized cryptocurrency exchange Paradex to support token to token trading.

The key difference between Coinbase and Bittrex is that on Bittrex, users can trade tokens directly with fiat. On Coinbase, users have to purchase major cryptocurrencies like bitcoin and Ethereum with fiat, and eventually trade BTC or ETH with tokens on Paradex, which will be integrated into GDAX that is expected to rebrand to Coinbase Pro.

The method used by Bittrex to remain compliant with local policies in processing token to fiat trades is more complicated and resource-demanding in comparison to Coinbase’s decentralized digital asset exchange integration. Bittrex has to cooperate with banks, regulators, lawyers, and independent teams on each token and if local authorities find an issue with just one of the hundreds of tokens listed on Bittrex, the exchange could be under heavy scrutiny.

How Bittrex Will Process Fiat to Token Trades
Currently, Shihara explained that BIttrex is directly working with US banks to process deposits and withdrawals and once the system is successfully tested, Bittrex will expand to many markets.

“Right now, we started with a small select number of launch partners and the idea right now in this phase, we are stress testing our system. We are working with the banks very closely to ensure that they can process fiat deposits and withdrawals, and also the engine itself that we use to trade is going to be able to properly handle the load. The idea then is to expand to as many markets as possible.

https://www.ccn.com/how-bittrex-does-crypto-to-fiat-trades-when-other-cryptocurrency-exchanges-cant/

Bitcoin Price Struggles to Secure Momentum at $7,700, Downside Break Expected.

The bitcoin price has failed to secure momentum above the $7,700 mark, struggling to break above the one-month descending trendline since May 3. If the upward movement of bitcoin fades and the dominant cryptocurrency is unable to bounce back quickly to the higher end of $7,700, a bleed out to the $6,000 region can be expected.

Conditional Rally
The corrective rally from $7,040 to $7,700 sparked significant optimism, especially amongst short-term bulls that have predicted the price of bitcoin would rebound back to the $10,000 region within June. While the $10,000 June target is still in play, another correction in the upcoming days will likely occur, given that the corrective rally from $7,040 has stopped at $7,700 and BTC has declined to $7,600.

A short-term break out to the $8,000 region supported by the corrective rally from $7,040 was conditional, as it required the volume of BTC to spike and the cryptocurrency to sustain momentum at its weekly peak, in the $7,700 region.

However, due to its low trading volume, BTC has failed to test a major short-term support level at $8,000 and fell to $7,600. A drop to $7,500 could result in BTC experiencing yet another minor correction, potentially to the higher end of $6,000.

While the Relative Strength Index (RSI) of BTC is 43.3, it is not demonstrating an oversold condition for BTC. A further drop in BTC would not lead the RSI to drop by large margins and thus, a short-term turn around back to the $7,700 mark if BTC falls to $7,500 is unlikely.

The daily candle on June 4 was supposed to be the big short-term break for BTC, rising above the one-month descending trendline from May 6 and effectively establishing a bottom at $7,040. But, the recent decline in the price of BTC will likely send BTC back to the lower end of $7,000 or in worst case scenario, to the $6,000 region.

Short-Term Not Important
Despite the negative price trend of BTC, most multi-billion dollar hedge funds are still extremely optimistic in BTC and the entire cryptocurrency market.

The expected decline in the price of BTC is a 5 to 10 percent drop maximum, which could extend to 15 percent at its worst. But, as Pantera Capital CEO Dan Morehead stated, which oversees more than a billion dollars in cryptocurrencies and digital assets, hedge funds look at the 5 to 10-year trend of the market.

In the mid to long-term, Morehead stated that bitcoin is still a screaming buy, adding:

“As digital tokens continue to multiply and gain wider use, the $400 billion crypto market could balloon to $4 trillion, and even $40 trillion is definitely possible. It’s the 10-year forecast.”

If BTC recovers gradually from the $6,000 to $7,000 region and establish major support levels with strong and volume in the upcoming months, the $20,000 to $50,000 BTC targets of large-scale investors can still be in play.

Often, tokens enjoy a surge in volume and price when the price of BTC is increasing gradually and volume of the cryptocurrency market picks up. If BTC enters the $7,500 region, it is likely that tokens will experience a substantial drop in value, once again.

https://www.ccn.com/bitcoin-price-struggles-to-secure-momentum-at-7700-downside-break-expected/

The year-long EOS initial coin offering (ICO) wrapped up last week, and after raising approximately $4 billion Block.one fulfilled its promise to release EOSIO 1.0, the first (and Block.one’s only) version of the EOS mainnet software.

Since Block.one will not be participating in the mainnet launch, a variety of other launch groups have taken blockchain snapshots in preparation for distributing EOS tokens purchased during the crowdsale phase to their owners in the network’s Genesis block.

Using these snapshots, a Reddit user compiled data about wealth distribution within the nascent EOS ecosystem. We’ll dive into the data, but first, an important caveat.

Due to the complexity of registering tokens through the crowdsale interface, many EOS investors chose to move their tokens to cryptocurrency exchanges prior to the snapshot to ensure that they received coins on the new chain. Consequently, many of the largest addresses belong to exchanges, most likely to an even greater extent than most other cryptocurrencies. Additionally, individuals may have registered tokens to multiple addresses.

With that important qualification, here’s how wealth will be distributed among addresses (but not necessarily users) when a mainnet launches:

The network will launch with 163,930 registered EOS addresses, all of which will hold a positive balance. For comparison, there are currently more than 22 million bitcoin addresses with a positive balance, according to BitcoinPrivacy.

The 10 wealthiest EOS addresses hold 496,735,539 tokens or 49.67 percent of the total supply. To make it into this group one would need to have 20,675,047 tokens, worth more than $280 million at the current exchange rate.

At least 100 million tokens ($1.4 billion) are held by Block.one, constituting 10 percent of the cryptocurrency’s total supply. The company said that it would not contribute to the ICO (as this would essentially allow it to acquire free tokens, minus the gas fee) and committed to undergoing an independent audit to back up this claim. It is not clear when this audit will be released.

The top 100 addresses hold 748,176,831 tokens or 74.82 percent of the total supply. Addresses need at least 646,595 tokens ($8.7 million) to make it into this tier.

The top 1,000 addresses hold 858,120,383 tokens or 85.81 percent of the circulating supply. These addresses all hold at least 42,941 tokens ($582,000). On the Bitcoin network, this group controls approximately 36 percent of the monetary supply, and addresses need at least $11 million worth of BTC to qualify for this list.

The remaining 162,930 EOS addresses (99.4 percent of all addresses) hold just 138,570,296 tokens or 13.86 percent of the total supply, while 3.3 million tokens (0.33 percent) remain unregistered.

Fair Distribution?
Why is this data significant? Well, for one thing, Block.one justified the length of its yearlong ICO by stating that it would be the “fairest token distribution project launched on Ethereum to date.”

“To ensure inclusivity, EOS are not sold for a fixed price, but sold at a price determined by market demand; this mimics mining, but does not offer unfair advantages to large purchasers,” Block.one CEO Brendan Blumer said at the time.

A clearer picture of wealth distribution in the EOS network will emerge in the weeks following a stable mainnet launch, as users begin to withdraw their tokens from custodial wallets and hold them in wallets to which they control the private keys.

Consequently, it’s perhaps too early to draw any meaningful conclusions from this data. If nothing else, however, it does perhaps indicate that, regardless of how equitable a particular token generation model may be, wealth distribution will inevitably prove to be quite uneven. Whether this trend is a problem, though, remains a matter for future debate.

https://www.ccn.com/less-than-1-of-eos-addresses-hold-86-of-the-tokens/

GMO Internet, a leading Japanese Internet services provider that offers online services including cryptocurrency trading, has developed “CryptoChips by GMO” to enable distribution of cryptocurrency as remuneration within games, according to an announcement on its website.

CryptoChips, which will initially support bitcoin, will allow players to receive cryptocurrency as “secret pocket money” based on players’ rankings within the game or when they acquire items or achieve missions. The players must have their own cryptocurrency wallets to receive the cryptocurrency.

First Offering Available In August
CryptoChips’ first initiative will be in August in “Whimsical War,” a real-time territorial battle game. CryptoChips will distribute bitcoin in accordance with player rankings. In Whimsical War, the placement of characters on the battlefield is key to winning the game. Players can form tag teams and engage in tag team battles.

CryptoChips, which will be offered through a GMO group company, will be mounted on the group’s other game applications and will eventually include competitors’ game titles.

Meanwhile, on June 6, the group will launch GMO miner B2, a mining machine equipped with mining chips using a 7 nm process technology.

A Cryptocurrency Pioneer
GMO Internet Group began offering cryptocurrency trading and cryptocurrency FX in May 2017.

The company reported launching its cryptocurrency mining venture in Northern Europe in December, noting that it was utilizing renewable energy that is plentiful in that region. The facility has a production target of 500 petahashes per second.

In February, GMO Group announced a two-year rental contract for its cloud mining venture for $5 million to cover power costs, maintenance, land, and security. The operation will support bitcoin and Bitcoin Cash. The company said it will accept up to eight contracts per month, and that it is considering a less costly alternative mining service.

Earlier last year, GMO Click, the world’s largest forex broker, announced plans to integrate its trading services with its bitcoin wallet – GMO Wallet Co. Ltd.

In 2014, GMO Internet announced it would allow its 48,532 Japanese merchants to accept bitcoin. The group’s partners began receiving part of their salaries in bitcoin this past February.

https://www.ccn.com/japans-gmo-launches-app-to-reward-gamers-in-bitcoin/

Vitalik Buterin: Ethereum Will Eventually Achieve 1 Million Transactions Per Second.

Vitalik Buterin, the creator of Ethereum, has explained in a recent OmiseGO AMA session that with second-layer solutions such as Sharding and Plasma, the Ethereum network will eventually be able to process 1 million transactions per second and potentially more than 100 million transactions per second.

Scalability Struggles of Leading Blockchain Networks
Previously, at various conferences and presentations, Buterin emphasized that the Ethereum blockchain protocol and decentralized blockchain networks, in general, are struggling to deal with scalability issues.

In September 2017, during an interview with venture capital investor Naval Ravikant at the Disrupt SF 2017 conference hosted by TechCrunch, Buterin noted that bitcoin and Ethereum have been processing three to six transactions per second at peak capacity. He added that for the blockchain to support large-scale payment networks such as Visa, stock markets like Nasdaq, and Internet of Things (IoT) networks, it will have to process hundreds of thousands of transactions per second.

“Bitcoin is currently processing a bit less than three transactions per second and if it goes close to four, it is already at peak capacity. Ethereum has been doing five per second and if it goes above six, then it is also at peak capacity. On the other hand, Uber on average does 12 rides per second, PayPal several hundred, Visa several thousand, major stock exchanges tens of thousands, and in IoT, you’re talking hundreds of thousands per second,” said Buterin.

During the OmiseGO AMA session, Buterin stated that second-layer scaling solutions that are currently being tested on the Ethereum testnet could enable the Ethereum blockchain network to support large-scale decentralized applications with millions of users by taking an innovative approach in optimizing the blockchain.

Sharding in specific splits a blockchain network to shards which are then equipped with a group of nodes that are tasked to process information of certain shards. With Sharding enabled, all nodes on the blockchain are not required to process every single piece of data settled on the blockchain, optimizing the process of settling information.

Plasma, a solution developed by Buterin and Lightning Network co-author Joseph Poon, operates similarly to Bitcoin’s Lightning Network, as it enables Ethereum to process micropayments by creating child blockchain networks within the main blockchains to process information more swiftly, leveraging the security of the main Ethereum protocol and thus not leaving the network vulnerable to potential attacks.

“The reason I think layer 1 and layer 2 [networks] are complementary is because ultimately, if you look at the math, the scalability gains from the layer 1 improvements and layer 2 improvements do ultimately multiply with each other. If you have a Sharding solution, the Sharding solution itself might increase the scalability of Ethereum by a factor of 100, or eventually even more. But then, if you do Plasma on top of the scalability solution, then what that means is, you’re not just doing 100 times of the amount of activity but you are doing 100 times the amount of entrances, the amount of exits, and despite resolutions,” explained Buterin.

1 Million Tx / Second
Buterin further noted that the synergy between layer 1 and layer 2 solutions would increase the scalability of Ethereum by 10,000x, allowing the network to process millions of transactions per second and supporting most applications.

“So if you get a 100x from Sharding and a 100x from Plasma, those two basically give you a 10,000x scalability gain, which basically means blockchains will be powerful enough to handle most applications most people are trying to do with them,” Buterin added.

https://www.ccn.com/vitalik-buterin-ethereum-will-eventually-achieve-1-million-transactions-per-second/