Crypto Market Retracts as Chinese Regulatory Uncertainty Troubles Investors: BTCManager’s Week in Review September 11
In the past week, the price of bitcoin retracted as news out of China emerged that claims that Chinese lawmakers may ban cryptocurrency exchanges in the same way they put a seemingly temporary ban on initial coin offerings. According to Chinese news outlet Caixin, it is “the end of the virtual currency exchange era.” While cryptocurrency itself is not being targeted, exchanges are being closed down, and only person to person trades are still permitted according to the article.
While there are conflicting reports coming out of China on this subject matter, no major exchange has yet closed its doors and no official statement has yet been published by the Chinese authorities.
In the past seven days, the price of bitcoin has dropped by around $500 from over $4,500 to just above the $4,000 mark. Altcoins have also corrected with ether (ETH), litecoin (LTC), and DASH (DASH) dropping by 21 percent, 23 percent, and 15 percent, respectively.
Currently, the crypto market is looking a little nervous and will likely remain this way until more clarity comes out of China about the future of initial coin offerings and cryptocurrency exchanges in the people’s republic.
In development news, the upgrade to improve scalability, privacy and potentially bring smart contracts onto Bitcoin by 2018 was proposed to be pushed forward as a soft fork. The upgrade in question, known as MAST, is also being worked on by Litecoin. Three Bitcoin Improvement Protocols were outlined by Mark Friedenbach on September 7.
This week’s review is compiled from contributions by Alex Lielacher, Liam Kelly, Jamie Holmes, and Michael Scott.
The September 4 announcement, however, of an ICO ban in China caused a momentary global panic that sent Bitcoin prices on a temporary tumble. The People’s Bank of China (PBoC) deemed ICO’s illegal, ordering all investments to be returned to contributors. News of this ban rippled through China’s startup world with these businesses fearing that future crowdsales will be outlawed.
Now in an interview on CCTV-13, China’s state run national television, Hu Bing from the Institute of Finance and Banking, an academic research organization that is loosely affiliated with the Chinese State, offered some clarity regarding the ban saying that China will likely resume ICOs in the future after establishing licensing regulations.
This opinion by Bing seems to line up with broader sentiments expressed in the global blockchain community, arguing that China’s total ICO ban was issued to simply stem the tide of scams in the country but that this new capital raising method is very much here to stay.
On September 6, the British Columbia Securities Commission announced that it would be allowing First Block Capital Inc. operational status. The investment fund seeks to be the first in Canada to allow investors to safely and legally invest in cryptocurrencies. Moreover, First Block Capital Inc. will be equipped with tools to help monitor any changes or developments in this new field.
Zach Masum, leader of BSCS’s Tech Team reported that: “Cryptocurrency investments are a new and novel form of investing in Canada. We have seen from the market and from investors that there is a strong appetite for access to these kinds of investments.”
New York-based technology company, Jibrel Network, recently announced that it has signed on with security auditing firm New Alchemy to conduct a full in-depth security audit and code review of its platform.
The announcement comes just weeks after a potentially critical vulnerability left $200 million worth of Augur tokens at risk. This intrusion was on the heels of a $32 million hack on the Parity Wallet in July.
The Jibrel Network, which allows anyone to tokenize traditional real-world assets, recognized its potential vulnerability to a similar attack.
Yazan Barghuthi, Project Lead at Jibrel Network expects more technology companies to follow suit in proactively addressing these issues. Says Barghuthi: “Most organizations don’t spend pre-emptively on preventing attacks; they typically wait until a breach occurs before investigating a fix. But given the technology is in its infancy, security must be a priority, which means engaging independent code reviewers.”
Following the catastrophic conclusion to the “Unite The Right” rally in Charlottesville, Virginia, the neo-Nazi website the Daily Stormer, has been scrounging for new media platforms. Shortly after the violent fallout, GoDaddy, CloudFlare, Scaleway halted all services to the website. After being terminated by Google shortly thereafter, the website made brief resurfacings on both Chinese and Russian domains. The website has continued to find any access to mainstream domains with little to no avail.
The difficulty for website founder, Andrew Anglin, has only worsened since a recent Twitter bot began tracking all Bitcoin donations made to the website. Neonazi BTC Tracker updates followers with donations made, current amount in the Daily Stormer’s wallet, and also reports on the date of the transaction. When asked to comment on the bot’s creation, security researcher John Bambenek, responded with: “I want to make it difficult for them to raise it, store it, and spend it… We’re really focusing on disrupting their money flows.”
Japanese energy company, Eneres, will demonstrate the potential for an energy-grid supported by blockchain technology.
Nikkei Asian Review reported on September 2 that Eneres energy company would be experimenting with blockchain technology as a means of distributing electricity. The demonstration is to be a part of a series of attempts by the Fukushima prefectural government to find new sources of renewable energy. The potential gains are outstanding as
Eneres President Masahiro Kobayashi claimed, “A new electric power service might be generated.” After the catastrophic earthquake in 2011, that lead to the meltdown of three nuclear reactors, officials are keen to find alternative energy solutions.
According to Vedomosti, the Russian-language business daily published in Moscow, major companies operating power plants in the country are leasing excess energy capacity to cryptocurrency miners. This move is being hailed as a boost for crypto miners who are seeing their electricity bills consume a significant proportion of their profits.
In a public statement quoted by the daily, a EuroSibEnergo representative said: “There are over 70 manufacturing facilities with ready-made infrastructure, including quick access to electrical grids and substations, provided with cheap electric power.”
These energy providers are “in talks” with scores of miners seeking to capitalize off of cheap electricity prices. And like the miners, state leaders want to use Russia’s more affordable energy rates to ensure greater competitiveness with China.
A new variant of banking trojan was discovered and reported on by cybersecurity firm Forcepoint on August 29 of this year. Although Trickbot has been primarily developed to target bank accounts, a new variant has now been shown to target cryptocurrency wallets. The cybersecurity firm has also pointed out that they have captured, “8600 related emails…with the UK, Canada, and France as the top three targets.”
Following the analysis of said 8600 emails, Forcepoint noted an addition to their list of targets: Coinbase.com. The currency exchange site that operates exchanges between Bitcoin, Litecoin, and Ethereum to name a few, is now a principal objective for the malware.