Bitcoin Inches above $4,100 as “Crypto Winter” May Finally Be over: BTCManager’s Week in Review April 1, 2019
The price of bitcoin managed to maintain above the critical $4,000 mark and closed the week two percent higher at a touch over $4,100 per coin.
The Bitcoin market remained firm despite the news that the SEC has decided to delay its approval or rejection decision of the Bitwise and VanEck/SolidX Bitcoin ETF applications. While the Bitcoin ETF saga has become one of the industry’s longest standing uphill battles, it seems that investors are currently not too concerned about an ETF approval as this news did not budge the price of bitcoin much.
While most crypto experts agree that a Bitcoin ETF will eventually come, it seems that investors are not expecting it to happen soon. Should a surprise approval follow later this year, the sector could potentially see the price of the pioneer cryptocurrency rally beyond its previous all-time high.
Year-to-date, the price of bitcoin has rallied by almost ten percent. What has been on the rise more, however, has been the development of the broader bitcoin and cryptocurrency ecosystem, with serious players launching digital asset exchanges in anticipation of more tokenized assets hitting the markets in the future.
This week, for example, Germany’s second-largest stock exchange, Börse Stuttgart, partnered with digital publisher Axel Springer to launch a blockchain-based digital assets trading platform. The new exchange will reportedly offer retail and institutional investors a secure platform to trade cryptoassets.
The altcoin market also closed the week in the green, with the biggest performer being Tezos (XTZ), which rallied by almost 60 percent week-on-week after it was announced that Coinbase Custody users can now stake Tezos tokens to earn “interest” on their holdings.
In the first of two quick-fire notices published on March 29, 2019, the SEC announced its decision to delay the approval or rejection of the Bitwise Bitcoin ETF application.
As previously reported by BTCManager, Bitwise Asset Management, a U.S.-based cryptocurrency index fund platform, had applied for a physically held Bitcoin ETF back in January 2019.
In mid-February, Bitwise submitted a proposed rule change to the SEC as part of its application. According to the notice, the SEC received 21 comments on the proposed rule change. With the announcement, the SEC now has a 45-day review period which it can extend to 90 days. The first 45-day deadline comes up on May 16, 2019.
The SEC also issued another public notice on Friday announcing the decision to delay the VanEck/SolidX bitcoin ETF by a further 45 days. Cboe had previously withdrawn the VanEck/SolidX application back in January 2019 before refiling a few days later. The 45-day deadline for the Cboe application comes up on May 21, 2019.
Hong Kong’s Securities and Futures Commission (SFC) wants stakeholders to know that it regards security token offerings (STOs) as securities. The SFC issued a press release on March 28, 2019, intimating investors of the regulatory status and associated risks of STOs.
In the press release, the SFC maintained that STOs are most likely to be deemed as securities, and as such, these tokens would fall under the regulatory ambit of Hong Kong’s Securities and Futures Ordinance (SFO).
Security tokens are usually mainstream assets like shares, or commodities like gold, whose ownership is issued via a blockchain. These tokenized securities are arguably a growing market within the emerging digital asset landscape.
The Hong Kong financial regulator also declared that unlicensed trading of STOs constituted a criminal offense. An excerpt from the press release reads: “Where Security Tokens are “securities,” unless an applicable exemption applies, any person who markets and distributes Security Tokens (whether in Hong Kong or targeting Hong Kong investors) is required to be licensed or registered for Type 1 regulated activity (dealing in securities) under the SFO.”
The SFC also called on STO brokers to adhere to the Commission’s strict compliance guidelines. Furthermore, the Commission reminded STO brokers of their duty to provide investors with the necessary information pertaining to these virtual assets.
On March 25, 2019, international peer-to-peer (P2P) cryptocurrency exchange platform LocalBitcoins announced through a blog post that it would soon come under the purview of the anti-money laundering (AML) law supervised by the Financial Supervisory Authority (FSA) of Finland.
Countries the world over are changing their stance towards crypto institutions from that of total negligence to steady inclusion. While some countries like China and India are still vehemently against anything crypto, things are less dire in Europe.
In a bid to better regulate digital currencies, the Finnish Parliament on March 13, 2019, voted and approved a proposal for a new Act on Virtual Currency Service Providers that will give legal status to cryptocurrencies in Finland.
Per LocalBitcoins’ blog post, the latest amendment to the Virtual Currency Service Providers Act will officially come into effect from November 2019. It is expected that the Act will bring more transparency to the local crypto ecosystem and help boost public confidence in Bitcoin as a legitimate financial network.
The Parliament also passed an amendment to the Act on Detecting and Preventing Money Laundering and Terrorist Financing which will bring all the institutions offering virtual currencies services under the country’s AML law.
Germany’s second-largest stock exchange, Börse Stuttgart has partnered with digital publisher Axel Springer and its sister concern finanzen.net to launch a blockchain-based digital assets trading platform jointly. This according to an official press release published March 27, 2019.
In December 2018, the crypto community got a tease of an upcoming cryptocurrency trading platform by German stock exchange Börse Stuttgart. Now, it seems that the plans for a digital exchange are finally coming to fruition.
Per sources close to the matter, the three-way joint venture of Börse Stuttgart, Axel Springer and finanzen.net will offer retail and institutional investors a secure platform to trade digital assets. Notably, the joint venture will be based in Stuttgart and will have an office in Berlin.
As for the business and equity structure of the proposed trading platform, the press release notes that Börse Stuttgart will own 70 percent stake in the exchange, while Axel Springer and financial news website finanzen.net will collectively own the remaining 30 percent share.
Coinbase Custody, an independent crypto custodial service from the stables of Coinbase exchange, has announced that institutional investors on its platform can now stake their Tezos (XTZ) and earn passive income. The firm is also looking to launch MakerDAO governance support in Q2 of this year, according to a Medium blog post on March 29, 2019.
Coinbase Custody, the crypto custodian that claims to have more than 60 institutional clients and over $600 million in assets under management, says that it is now offering users a “regulated, fully insured and 100 percent offline Tezos staking service.”
While proof-of-stake (PoS) blockchains make it possible for holders of its digital assets to earn passive income on their coins by “staking” or “delegating” their cryptos to a trusted party running a full node, the entire process also comes with specific challenges.
Coinbase Custody plans to help its institutional clients eliminate these bottlenecks, thereby enabling them to make the most of their cryptoassets. Coinbase Custody wrote:
“No other staking service provider has our track record of security and regulatory compliance, nor our robust, best-in-class insurance coverage.”
The FBI announced on March 26, 2019, that several law enforcement agencies teamed up to conduct a series of separate raids and interviews targeting opioid traffickers on the Darknet. The officers seized a cache of drugs, firearms, gold, cash, and an assortment of cryptocurrencies.
According to a March 26, 2019 press release, the FBI led a joint operation dubbed “Operation Sabo Tor” that comprised of a series of separate but complementary raids between January and March 12, 2019.
The law enforcement agencies involved in the sting operations included the Drug Enforcement Administration (DEA), U.S. Immigration and Customs Enforcement Homeland Security Investigations (HSI), U.S. Customs and Border Protection (CBP).
Operation Sabo Tor was led by members of the Joint Criminal Opioid and Darknet Enforcement (J-CODE) team and resulted in 61 arrests and the shutdown of 50 dark web accounts associated with online criminal activity.
The operation impounded almost 300 kilos of different illicit drugs, 51 firearms, and more than $4.5 million worth of cryptocurrency, $2.48 million in cash, and $40,000 worth of gold. The series of operations specifically targeted the opioid epidemic, and the officers went after the most prolific opioid vendors on the dark web to takedown their activities and brought their trading to a halt.
According to new research from Messari, Stellar, the world’s eighth largest cryptocurrency project by market cap, suffered an “inflation bug” in April 2017 which enabled attackers to create an additional 2.25 billion XLM tokens. This, per a report by crypto research firm Messari, published March 27, 2019.
Blockchain’s security has quickly placed it as a go-to technology for startups and large conglomerates alike. The technology, in addition to providing rapid and transparent IT solutions, also offers an immutable ledger of records that is reasonably hard to tamper with once a transaction has been recorded on it.
However, according to a recent report by Messari, in April 2017, hackers were able to exploit the “MergeOPFrame::doApply” function in the Stellar blockchain which enabled them to create 2.25 billion XLM tokens. These tokens, at the time, were worth approximately $10 million and represented as much as 25 percent of the circulating supply of the digital asset.
It’s worth pointing out that the team at Stellar has since fixed this critical bug.