Day: August 24, 2018

The UK’s financial regulator, the Financial Conduct Authority (FCA), has just awarded its third e-money license to date.

This time, the beneficiary was crypto company Wirex, who produces prepaid debit cards for converting crypto to fiat, hot on the heels of Coinbase who received its license in March.

We are more than proud to announce that Wirex Limited is only the third #crypto-friendly company in the world to have been granted an FCA e-money licence
What does this mean for us? And more importantly, for you? https://t.co/NC2VivcG93

— Wirex (@wirexapp) August 23, 2018

The Coinbase thumbs up from the FCA, unlike the Wirex license, doesn’t relate to cryptocurrency dealings. This enables the crypto company’s access to the UK’s faster payment system for supporting pound sterling, although this is still not available for most users who still can only transfer funds to UK Banks from Coinbase using euros, thus incurring an extra transaction fee.

However, many potential clients are dissuaded from signing up to platforms such as Coinbase due to lengthy verification processes, sometimes waiting many weeks before a user’s bank can be verified and linked for payments.

The FCA’s UK fintech sandbox was established along with the licensing program earlier in the year and then updated later to include two British crypto companies, Globacap and BlockEx, who are currently developing their blockchain applications for financial services.

Although the watchdog is proactive in giving new UK crypto companies opportunities to develop and operate within the UK and globally, with 40$ of latest sandbox companies being blockchain-related, warnings are still being issued to the public regarding crypto scams.

Also, the regulator has accepted a small number of crypto-assets related firms as the FCA suggested that it is “keen to explore whether, in a controlled environment, consumer benefits can be delivered while effectively managing the associated risks”.

A warning was issued last week by the FCA regarding fraudsters, many of which have targeted known figures such as Amstrad Boss and Apprentice host Sir Allen Sugar and other UK media personalities.

Efforts made by the British financial watchdog and its collaborations with government branches indicate that the United Kingdom is to become a significant player in the global movement to create industry regulation frameworks and business innovations.

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The SEC announced yesterday nine bitcoin ETF disapproval orders are to be stayed until further review but what does that mean exactly?

Barclays and HSBC have allegedly blocked three accounts of a U.K.-based electric bike retailer for having traded Bitcoin for cash through a popular P2P trading platform hours earlier. The alarming situation comes five months after crypto exchange Coinbase opened a bank account with Barclays.

Bank Account Closures Raise Alarm in the UK

Scott Snaith, a retailer based in Leicestershire, U.K., had two personal and one business account blocked by HSBC and Barclays for having traded Bitcoin in exchange for cash with U.K. account holders with verified IDs. The banks offered no explanation for the unilateral decision despite the “entirely transparent and above board” five-figure transactions, according to the entrepreneur.

The business linked to the closed account is 50cycles, a retailer of the cryptocurrency earning electric bike Toba. Focusing on innovative electronic bikes since its foundation in 2003, from folding e-bikes to the world’s first e-bike to use Lithium-ion batteries in 2004, the business is now riding the cryptocurrency wave by selling bikes that generate tokens that can be exchanged in the LoyalCoin network of retailers or traded for Bitcoin et al.

Snaith claims to be a victim of financial discrimination, which has damaged his business as he wasn’t able to pay staff or suppliers. In a report from inews, he said:

“This situation is a complete nightmare and the knock-on effects have been unbelievable. One of my staff left as they had just had a baby and couldn’t afford to be in a job that was unable to pay them, which isn’t surprising […] I’ll never be able to bank with Barclays again. I’m a professional business owner taking advantage of new financial technologies and it looks like the banks are failing to keep up with their customers’ habits. We are the ones being punished. The banks are deliberately creating obstacles. They are anti digital currency and displaying a new form of financial discrimination. The message is clear: your funds are not yours.”

Following Snaith’s complaint, HSBC reinstated his account, but Barclays still refuses to do so. A spokesman from the bank said, “Barclays is complying with its legal and regulatory obligations and we never take the decision to issue a notice of closure, or end a client relationship, lightly.”

Andrew Hagger, founder of Moneycomms.co.uk, said banks are increasingly concerned with potential money laundering with cryptocurrencies.

“It’s probably sensible to speak to your bank first before trading to see what their position is and whether they have any specific rules or transaction limits […] It may also be worth keeping your crypto trading monies in a totally separate bank so if the account is frozen for any reason it doesn’t impact your day to day finances.”

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Even though Dash has become a relatively successful cryptocurrency in its own right, it is evident there is room for improvement. A new proposal has been submitted to demote CEO Ryan Taylor and reduce overall expenses before the project’s treasury runs out of money. So far, it has not gotten too much support from the community.

Dash Faces Potential Funding Issues

It is evident cryptocurrency projects must continue to grow and evolve whenever possible. That is much easier said than done when it comes to collecting the funds necessary to do so. In the case of Dash, the altcoin has put together a system that has worked well for many years. It allowed the currency to enter the mainstream, which is more than one could have hoped for in the beginning.

At the same time, the expenses are piling up and funding appears to be running out slowly but surely. According to a new proposal on the Dash Central website, it seems to be a matter of time before the Dash Core Group runs out of money to fund its current activities. It is possible that community members will chip in some funds to delay the inevitable, although a proactive solution seems more than warranted.

The post claims there is currently a budget of 6,176 DASH. Based on current prices, that translates to roughly $1.2 million. For an altcoin, that should be more than sufficient to keep things going for the foreseeable future. In reality, however, it may prove to be a big problem unless something changes. With the current fluctuating cryptocurrency prices, a lot of potential issues loom ahead.

Considering that Dash has expenses of $500,000 per month, funding will seemingly dry up in three months unless the price recovers or new funding is secured. Another option is to reduce costs significantly, which may involve demoting CEO Ryan Taylor to a different function. This move would be a direct result of Taylor allegedly failing to build safety nets for Dash Core Group when the cryptocurrency’s price was near its all-time high.

While it remains to be seen how dire things will get in the coming months, the proposal is falling on deaf ears. To fund and advance this proposal, an additional 1,200 “yes” votes would need to be collected. So far, there are only 95 votes in favor of demoting Ryan Taylor, with 831 “no” votes. While there are still some big developments coming for Dash, it is evident crunch time is not too far off.

Cryptocurrencies which run out of funding generally disappear into obscurity very quickly. It seems most of the Dash community still has a lot of confidence in the ability of Ryan Taylor and the Dash Core Group to deliver on Evolution. Even so, some of the project’s biggest backers are already pulling support or establishing a deadline of December 31, 2018. The coming months will be very interesting for this project.

Crypto markets are seeing a solid upswing today, with Bitcoin surpassing the $6,600 price point, amidst SEC’s decision to review rejected Bitcoin ETFs

Amid a wave of negative news, the crypto markets remain relatively stable, indicating that the bears are losing their grip

This article originally appeared on Bitcoin Magazine.

Much good cheer came out of this year’s Consensus 2018 Blockchain Summit in New York, without the Lambos. However, there are many industry professionals who still feel that the space needs to develop a sounder structure.

The well-used traditional banking model requires expensive multiple participant involvement for every transaction and underlies a system which is sagging to the degree that many global banking systems are now being wooed by blockchain for their own ends. Tradition banking’s potential to simplify and create speed and efficacy at low cost remain bank-central with little apparent regard for the user or client, although this would be denied by many institutions. Bank profits remain the ultimate concern rather than client usability, transparency and low fees.

All the reason why the word cryptocurrency has rocketed into the lexicon of all but the most closeted of individuals. The decentralized market offers the user control and removes it from the service provider; one of its main attractions.

However, the cryptocurrency space is not without flaws and these can be seen with reports of hackings, fraud, crypto exchange misconduct and rule bending. Mike Belshe of Pensions and Investments sees this liberal climate as one that needs more “checks and balances”, citing the Coinrail and Coincheck hacking losses of this year as an illustration of this lack of security.

Belshe suggests that it’s a case of a solid infrastructure which he argues the industry is still lacking, as ironically decentralization hasn’t prevented the onset of centralized exchanges taking on the role of custodians of user assets. The solution to this, according to Belshe, is custodianship which is not built around exchanges and is independent of them, differentiating the exchanger role from the holder role in terms of responsibilities. He argues this qualified custodianship may even be mandated by the SEC.

He said, “If you didn’t have a bank to store your savings, what would you do? Put bars on the windows? Install a safe in a secret wall? Bury it in the backyard? No. You entrust it to people who know how to keep it safe, who know how to make sure you have access to it and who have all the safeguards in place to protect the assets you are managing for others.”

The fundamentals of custodianship require complete and transparent security, storage and regulatory compliance as an absolute guarantee for investors and until this can be guaranteed, the industry is not ready to gain the confidence of every user, be it institution or individual.

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All cryptocurrencies must keep growing and evolving. Without evolution, projects will eventually disappear into obscurity. Bitcoin Cash is set to undergo another hard fork, although some of the proposed changes are not to everyone’s liking. Until proper adoption of BCH occurs, none of the proposed changes are necessary or warranted, according to some experts.

Bitcoin Cash Changes Seem Unnecessary

One of the many reasons why Bitcoin Cash has become so successful is because it seemingly solved Bitcoin’s scaling problems. With a bigger block size and faster blocks, the network is firing on all cylinders. Assuming, that is, that people will use Bitcoin Cash to the same degree as they do Bitcoin, which is anything but the case at this stage.

Statistics provided by Blockchair show that there has not been a Bitcoin Cash network block larger than 8MB since the currency’s inception a year ago. Even during the initial hype surrounding this network, not enough transactions piled up to fill up network blocks. Despite the lack of full blocks, Bitcoin Cash has received a limit upgrade allowing for blocks up to 32MB in size.

Preparing for the future is one thing, but there is seemingly no reason to up this limit once again. A new proposal to hard fork Bitcoin Cash once again focuses on increasing the block size to 128MB. While that makes sense from a long-term perspective, it seems like implementing these changes is premature. A median block size of mere kilobytes – not megabytes – does not warrant such a major increase.

Additionally, there is a proposal to rework and reactivate some of Bitcoin Cash’s opcodes. While that is a positive development, it appears there is no demand for this change either. Moreover, such changes must be properly tested and audited prior to implementing them in the code base. Bitcoin Cash has a bit of a checkered history when it comes to properly testing potential major changes to its code base, unfortunately.

Although Bitcoin Cash is exploding, there appears to be one critical issue which has never been addressed. Similar to other cryptocurrencies, BCH miners can vote on how the network evolves as a whole. This voting process is not necessarily as transparent as it could or should be, which remains a topic of debate among cryptocurrency enthusiasts. Whether or not this is something that needs to change remains a subject of debate.

It is evident these proposed changes are in need of proper discussion. It seems highly unlikely any of these changes will be reverted prior to the next fork, although collecting valuable community feedback should never be overlooked. Increasing the block size to very high levels may not be warranted at this stage, but it remains to be seen how Bitcoin Cash will fare in terms of real-world adoption moving forward.

Bitcoin (BTC)

The father of cryptocurrency is up at press time by nearly $200. It is now trading for over $6,600 – a solid spike from yesterday’s $6,400, which is where it’s been hanging around for the past few days. Clearly, bitcoin has managed to break current resistance and boost its support.

It has been a wacky week for bitcoin, indeed. Despite hanging in the $6,400 section for most of it, the currency did experience a $400 spike roughly 48 hours ago within a 20-minute span. However, for one reason or another, this didn’t last particularly long. It ultimately fell back down its previous level but is now witnessing steadier jumps in its price. It was trading for $6,500 early this morning, and now has an additional $100 to brag about.

Ethereum (ETH)

Ethereum – the second-largest cryptocurrency by market cap and the number one competitor to bitcoin – has experienced similar movement. While the head honcho BTC has undoubtedly shown the most fluctuation and price behavior (after all, it’s the largest one out there), Ethereum has encountered several slumps throughout the week that saw it trading between $270 and $279, where it presently stands. This is about three dollars higher than yesterday’s afternoon price of $276.

It’s a small spike, but comparable to that of bitcoin. Being the larger coin, BTC’s rise is more noticeable, but it’s still small beans when compared to its overall size and market cap. Ethereum’s three-dollar spike is more respective to its smaller market cap.

Ripple (XRP)

Presently, the third-largest cryptocurrency – Ripple – is trading for about 32 cents. This is about two cents less than where it stood earlier in the week.

Recently, the company’s chief technology officer David Schwartz was asked about the limitations of the XRP ledger. He responded with:

“We expect that this will not be a winner take all outcome, but instead several digital assets can survive for specific use cases. Today, for example, Ethereum provides a “programmable money” function that the XRP Ledger cannot. Adding this capability to the XRP Ledger would have huge costs that reduce XRP’s suitability for payments. You can’t have everything.”

Bitcoin Cash (BCH)

Bitcoin cash is trading for about $532, which means it remains relatively unchanged since last week.

Overall, bitcoin cash has performed far worse than most other cryptocurrencies. At the time of writing, it has lost nearly 90 percent of its total value since last January. However, it was originally slated to be more powerful than bitcoin, offering lesser fees and faster transaction times. Sadly, the coin has yet to convince followers of its complete prowess.

Litecoin (LTC)

Litecoin is currently trading for about $57, which means it’s up by about two dollars from the beginning of the week.

Despite the crazy ups-and-downs endured by the sixth-largest cryptocurrency, some sources still claim Litecoin is one of the top-growing altcoins in the crypto arena.

Charts by TradingView

As part of a nationwide clampdown against cryptocurrencies, the People’s Bank of China (PBOC) has published a statement urging the public to be sceptical of claims from companies using the term blockchain to promote themselves. The notice states that some firms are duping people out of money under the guise of financial innovation.

Chinese Offensive Against Digital Currencies Continues

Today’s statement was penned jointly by the PBOC, the Banking Regulatory Commission, the Central Network Information Office, the Ministry of Public Security, and the General Administration of Market Supervision.

During the document, concerns are raised about “lawless elements” using the “banner of ‘financial innovation’ and ‘blockchain’” to defraud the public by selling digital tokens and coins. The statement goes on to claim that this is contrary to the interests of the public and infringes on their rights.

The document alleges that the activities of the guilty companies are not based on true blockchain technology at all. Rather, they are simply using the buzzword to promote “illegal fundraising, pyramid schemes, and fraud.”

It further goes on to outline some of the features of such schemes. These include them being based overseas yet targeting Chinese residents, relying on pseudo-tech and celebrity promotion, and incentivising participation through alluring “air drops” and other promotional tools. Such means are claimed to enrich the criminals behind them, allowing profits to be made from the price movements of the digital tokens in question.

Finally, a clear warning is issued to the people of China:

“The general public should be rational about the blockchain, do not blindly believe in the promise of smallpox, establish a correct monetary concept and investment philosophy, and effectively raise the awareness of risk; and actively report the illegal criminal clues found to the relevant departments.”

Over the last twelve months, the Chinese government has brought in several measures to clampdown on cryptocurrencies. In September last year, initial coin offerings (ICOs) were outlawed. Shortly following this, domestic exchanges were instructed to shut down. This prompted many to settle in neighbouring crypto-friendly countries such as Singapore.

Recently, these efforts have intensified. The notice published today follows a month of developments seemingly aimed at ridding China entirely of cryptocurrencies.

These have included various crypto news publications having their WeChat accounts terminated, the IP addresses of over 120 different exchange and ICO websites being blocked by Chinese web servers, and the Chaoyang District forbidding hotels, and other typical venues for public meetings from holding cryptocurrency-focused promotional events.

(Document translated courtesy of Google Translate)

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WeChat Pay and Alipay are scrambling to keep up with regulators after recent announcements regarding initial coin offerings and cryptocurrencies.

A luxury goods entrepreneur is now taking her company, which specializes in selling luxury vehicles, into the crypto space with good honest Bitcoin.

Bonham Auctions owned by Elizabeth White has to date sold over 30 Lamborghinis, a Ferrari which went under the hammer for a staggering USD 4 million and even sold a car to a 16-year-old waiting for his driving license after making his fortune Bitcoin mining.

In the past, such luxury items auctions have received some bad press, with suggestions that most of the proceeds feeding into such auctions are simply money laundering opportunities.

White disagrees, refuting that Bitcoin is the choice of disreputable clients and arguing that the nature of blockchain allows her to keep a close tab on clients:

“Every transaction is recorded on the Blockchain, which is publicly accessible, so it is actually much more transparent… We know who our clients are.”

A recent report by cybersecurity firm Recorded Future has indicated that Bitcoin is no longer the choice of criminals while coins such as Dash and Litecoin are increasingly being used for more nefarious purposes with 30% of dark web vendors accepting Litecoin and 20% accepting Dash.

White gains from the fact that buyers would need a prolonged period of withdrawals from exchanges in order to buy some of her auction items due to limits of USD 10,000 a week whereas they can transfer much larger sums to her in an instant. There is a strategy involved in terms of whether she holds or sells her Bitcoin due to current market volatility.

White has recently launched her own stable coin (WSD) tied to the USD to try and get around these issues, enabling customers to use her wallet facility to trade Bitcoin for WSD.

There is also an increasing number of platforms being launched to help wealthy consumers part with their cryptocurrency, usually on luxury items. Such entrepreneurs have created a business seemingly out of very little but nonetheless, they are serving a specific crypto elite and creating a thriving retailer-consumer database.

One such London gallery in Mayfair simply advises their clients on how to spend their cryptocurrency on luxury items and guides them through the process, working as a middleman between wealthy consumers and an established list of retailers.

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