• Ethereum and Ripple are soaring, echoing the powerful rally in Bitcoin, as mass interest in cryptocurrencies picks up steam.
• Ethereum has jumped almost four-fold this year to just below $600, although this is still short of its record $1,500 in January 2018.
• The price of smaller crypto rival Ripple has hit its highest since mid-2019, having doubled in value in this month alone.
• This growing interest raises red flags, because many people are pouring in money into cryptocurrencies without really understanding how they work, which could lead to several mistakes and lost money, a researcher said.
• 
  

Bitcoin's growing reputation as an inflation hedge is boosting the price of other cryptocurrencies. Ethereum, the second-largest cryptocurrency platform in the world, rose by more than 6% to $597 on Monday, its highest since mid 2018. Ethereum is still well below its all-time high of about $1,500 recorded in January 2018, but its price has increased four-fold since March 2020, when the pandemic brought global money markets to a grinding halt.

Smaller rival Ripple's price has doubled in the month of November alone. The sudden price surge could be explained in large part because of Bitcoin's massive rally this year. The digital token is up 160% on the year and was trading around $18,632 on Monday, near three-year highs.




Markets Insider

While both crypto assets have risen massively in price, their market capitalization is still dwarfed by Bitcoin. Ethereum represents about $40.6 billion in market cap, Ripple stands at about $48.5 billion, while Bitcoin touched an all-time high of $336 billion last week.Michael Sonnenshein, managing director of the world's biggest crypto fund Grayscale Investments, told Business Insider last week that he believes Bitcoin is the next step in the evolution of money.

As the pandemic continues to quarantine huge swathes of the global population, people are spending more time online, and they're probably getting more interested in cryptocurrencies like Ethereum, Bernard Meyer, senior researcher at CyberNews.com, said.

Read More: A Wall Street strategist breaks down why bitcoin's latest surge past $18,000 is sniffing out a major downward spiral in the stock market's hottest trade"But because it's all so technical, they're probably investing in these cryptocurrencies without really being certain of what they're doing – which can lead to a lot of mistakes and money lost," he said.

In the past, a number of high-profile hacking and security breaches resulted in millions of dollars' worth of bitcoin and other cryptocurrencies being stolen on various platforms.

While security across the major trading platforms has tightened up, would-be Ethereum buyers need to make sure they are familiar with their token's smart contract - a form of account on the Ethereum blockchain that can send transactions across the network.

"If they're on Ethereum, they'll be using what's known as a smart contract to sort of automate the process of sending and receiving payments for users. But these smart contracts can have some big security holes in them," Meyer said.

Investors need to check the type of smart contract they're using and whether it has been audited and verified, to limit the chances of something going wrong. 

• Mike Novogratz on Monday said he expected the price of bitcoin to hit $65,000 and told the "Game of Thrones" star Maisie Williams to buy the digital token.
• Williams conducted a Twitter poll on Monday about whether she should buy bitcoin. It caught the attention of several prominent names, including Novogratz, Elon Musk, and the major cryptocurrency investor Barry Silbert.
• Bitcoin climbed on Wednesday by as much as 4.8%, to $18,480 and a three-year high, before tumbling by $1,000 during Asian trading.
• Bitcoin's market capitalization recently hit a high of $337 billion, surpassing a record of $328 billion set in December 2017.
• Visit Business Insider's homepage for more stories.

The billionaire investor Mike Novogratz predicted that the price of bitcoin would hit $65,000 while offering advice to the "Game of Thrones" star Maisie Williams on Twitter on Monday.The actor took a poll on Twitter on whether she should buy bitcoin, the world's most popular cryptocurrency.


Novogratz responded by saying he expected the price to hit $20,000 before getting to $65,000 because of a "network effect" in which there are a ton of new buyers and low supply."So YES, buy it," he said.




Maisie Williams' Twitter [email protected]_Williams/Twitter


Bitcoin surged on Wednesday by as much as 4.8%, to $18,480 and a three-year high, before tumbling by $1,000 in midafternoon Asian trading. Bitcoin began to surge in October at about the time PayPal announced it would allow its users to buy, sell, and hold the cryptocurrency on its network.

The price has gained 70% since the start of last month.

Read more: MORGAN STANLEY: Buy these 21 stocks set to soar at least 50% as their earnings rebound from a COVID-induced rout

Novogratz has long advocated bitcoin and said he expected its price to keep increasing as more people warm up to the idea of adding it to their portfolio.

Even though Novogratz advised Williams to buy, more people who responded to her poll disagreed. Of the almost 900,000 respondents as of 3:30 a.m. ET on Wednesday, about 53% said no to investing in bitcoin.

The poll even caught the eye of Tesla CEO Elon Musk, the podcast host Stephan Livera, and Barry Silbert, the CEO of the investment fund Digital Currency Group.

Bitcoin's market capitalization recently hit a high of $337 billion, eclipsing a record of $328 billion set in December 2017, according to data from Coin Gecko.

As for crypto skeptics, the hedge-fund manager Ray Dalio acknowledged Tuesday that he "might be missing something" about bitcoin and said he still saw reasons it wouldn't become an everyday currency.

JPMorgan Chase CEO Jamie Dimon said blockchain will have a pivotal role in the future of finance even if bitcoin, the market-leading cryptocurrency that made blockchain famous, is not his “cup of tea.”

Speaking at the New York Times’ DealBook Conference Wednesday, Dimon reiterated JPMorgan’s support for blockchain technology as a potentially transformative financial mechanism.

“The blockchain itself will be critical to letting people move money around the world cheaper,” he said. (His bank made waves recently with the launch of its “JPM Coin” for wholesale banking payments). “We will always support blockchain technology.”

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But Dimon refused to give ground on his opposition to bitcoin (BTC, -0.86%).He repeated his longstanding belief that governments will ultimately more heavily regulate it (something echoed recently by fellow billionaire Ray Dalio). Oversight is inevitable for something so large, he said.

Even so, Dimon acknowledged that “very smart people” are buying into the cryptocurrency in the belief that it will outperform gold, the U.S. dollar and U.S. Treasury bonds.

“Let them do that,” he said. “It’s just not my cup of tea.”


Screen Shot 2020-11-18 at 9.32.02 AM

Bitcoin is on a tear this year.

The cryptocurrency just hit $17,000 — a level it hasn’t breached in nearly three years — continuing a wild run that’s reminiscent of its monster rally in 2017.

The price of bitcoin was up over 4% in the last 24 hours, trading at $17,030 and hitting its highest point since Jan. 7, 2018, according to data from industry website CoinDesk.

Industry insiders say that bitcoin’s climb this year — which has seen it rise 137% year-to-date — is down to a number of factors, including a wave of Covid-related government stimulus and interest from big-name investors like Paul Tudor Jones and Stanley Druckenmiller.

“The gap between the crypto world and traditional financial institutions has closed dramatically,” Charles Hayter, CEO of crypto market data provider CryptoCompare, told CNBC.

“The result is that incumbent players are now fine to play in the digital asset markets. The narrative that is compelling them to do so is this alignment of Covid, monetary policy and political disarray globally.

Bitcoin surges higher as brand-name investors buy the cryptocurrencyCrypto fans have described bitcoin as having similar qualities to safe-haven assets such as gold, which investors often flock to in times of economic turbulence.

They claim fiscal and monetary stimulus measures taken in response to the pandemic lessen the appeal of sovereign currencies like the U.S. dollar.

Bitcoin’s meteoric rise also comes as various major companies are making moves in the cryptocurrency space.

Fidelity Investments, for instance, set up a dedicated digital assets unit to make it easier for its clients to trade crypto, while PayPal recently started letting its users buy, hold and sell virtual currencies.

Bitcoin, the world’s best known cryptocurrency, jumped above $17,000 to a three-year high on Tuesday as a growing number of investors backed it as an alternative to other assets.

The currency climbed more than 4% to $17,492, its highest level since December 2017 and more than four times higher than the price in March when heavy selling sent its value below $4,000.

Analysts said the pandemic had encouraged investors to review the long-term outlook for bitcoin and other cryptocurrencies such as Ethereum, Litecoin and XRP, which have all increased in value in recent months.

Concerns about fraudulent trading in cryptocurrencies and a succession of hacks that prompted cryptocurrency exchanges to lose millions of dollars worth of coins, appear to have waned, giving investors a greater sense of security.




“The virus crisis is propagating the reassessment of bitcoin,” said Nikolaos Panigirtzoglou, an analyst at JPMorgan. “There is a reassessment about its value here as an alternative currency; as an alternative to gold.

”Gold set an all-time high in August of $2,072 per ounce, but has since waned to $1,885.

While some investors have sought a safe haven, others have seen bitcoin as a growth asset that can perform strongly in an era of low returns from government bonds.

Central bank stimulus measures to combat the Covid-19 pandemic have cut interest rates to below zero in many parts of the world, leaving only minimal returns on lending to governments.

Bitcoin’s supply is capped at 21m. Proponents say its scarcity provides an innate value and shields it from central bank or government policies that stoke inflation.

Some investors have become concerned that inflation will spiral next year following a rush of new Covid-19 vaccines that allow governments to boost their economies.

Also supporting prices, investors said, were expectations that bitcoin was being embraced by mainstream companies and moving towards widespread use as means of payment.

Q&AWhat is bitcoin?ShowLast month, PayPal said it would open its network to bitcoin and other cryptocurrencies. Bitcoin has risen by nearly half since PayPal’s move.

“The ultimate endorsement of crypto is whether you can buy your groceries with it and pay taxes with it,” said Russ Mould, investment director at AJ Bell. “That would be the ultimate acceptance.

”Simon Peters, an analyst at multi-asset investment platform eToro, said bitcoin’s value was likely to increase over the rest of the year.“It has broken through the critical price milestone of $17,000 and looks set to move higher.

”He added: “It is not out of the question for the crypto to hit its all-time high of $20,000 this side of Christmas.

”Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDeskThe last time bitcoin was valued at nearly $20,000 a coin was in December 2017, at the height of the currency’s last bull run.

“Three years on, the crypto industry has consolidated, matured and is seeing real traction with institutional investors. Investors are using bitcoin as an inflationary hedge to combat the prospect of continued government stimulus,” Peters said.

“Will it be a merry Christmas for bitcoin holders? We’ll have to wait and see, but the signs look promising.”

Fintech giant Paypal is planning to launch a cryptocurrency service enabling members to buy, hold and sell tokens directly from their PayPal account along with mentioning plans to  create a funding source for purchases at its 26 million merchants worldwide by significantly increase the utility of cryptocurrencies.

The company was granted a first-of-its-kind conditional Bitlicense by the New York State Department of Financial Services (NYDFS).The service is now available to PayPal account holders in the U.S. through a partnership with Paxos Trust Company, a regulated provider of cryptocurrency products and services.

The company plans to expand the features to Venmo and select international markets in the first half of 2021.The current COVID-19 pandemic and an increased interest in digital currencies from central banks and consumers have driven Paypal into the arena which is expected to give a significant boost to the cryptocurrency sector.

“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” said Dan Schulman, president and CEO, PayPal.

“Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange.

 We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.

”Mainstream adoption of cryptocurrencies has traditionally been hindered by their limited utility as an instrument of exchange due to volatility, cost and speed to transact. However, the promise of advanced technological platforms offers the possibility of mainstreaming digital currencies.

According to a survey by the Bank for International Settlements, one in 10 central banks – representing approximately one-fifth of the world’s population – expect to issue their own digital currencies within the next three years.

To increase consumer understanding and adoption of cryptocurrency, the company is introducing the ability to buy, hold and sell select cryptocurrencies, initially featuring Bitcoin, Ethereum, Bitcoin Cash and Litecoin, directly within the PayPal digital wallet.

“NYDFS’ approval today follows our June 2020 announcement for a new framework for a conditional Bitlicense to encourage, promote, and assist interested institutions to have a well-regulated way to access the New York virtual currency marketplace in a way that is both timely and protective of New York consumers, through partnerships with New York authorized virtual currency firms,” said Linda A. Lacewell, superintendent, NYDFS.

“NYDFS will continue to encourage and support financial service providers to operate, grow, remain and expand in New York and work with innovators to enable them to germinate and test their ideas, for a dynamic and forward-looking financial services sector, especially as we work to build New York back better in the midst of this pandemic.

”PayPal also plans to provide educational services to account holders in order to help them understand the cryptocurrency ecosystem, the risks and opportunities related to investing in cryptocurrency, and information on blockchain technology.

There are no service fees when buying or selling cryptocurrency through December 31, 2020, and there are no fees for holding cryptocurrency in a PayPal account.

Beginning in early 2021, PayPal customers will be able to use their cryptocurrency holdings as a funding source to pay at PayPal’s 26 million merchants around the globe. Consumers will be able to instantly convert their selected cryptocurrency balance to fiat currency, with the certainty of value and no incremental fees.

PayPal merchants will have no additional integrations or fees, as all transactions will be settled with fiat currency at their current PayPal rates. In effect, cryptocurrency simply becomes another funding source inside the PayPal digital wallet, adding enhanced utility to cryptocurrency holders, while addressing previous concerns surrounding volatility, cost and speed of cryptocurrency-based transactions.

In addition to providing these significant cryptocurrency services, PayPal has been exploring the potential of digital currencies through partnerships with licensed and regulated cryptocurrency platforms and with central banks around the world.

For the past five years, PayPal has increased its focus and resources on exploring the next generation of digital financial services infrastructure and enhancements to digital commerce through an internal blockchain-focused research team. 

In 2019, PayPal Ventures, the company’s venture capital arm, invested in TRM Labs, a company focused on helping financial institutions prevent cryptocurrency fraud and financial crime, and Cambridge Blockchain, a blockchain-based identity management and compliance software company. PayPal will continue exploring the potential of distributed ledger technologies to improve financial services and assure they are faster, more secure and less expensive.

The company intends to work hand-in-hand with regulators, governments and central banks in this quest.

The boss of the world’s biggest hedge fund had a stark warning about how future governments will deal with Bitcoin.

By Mathew Di Salvo

• Billionaire investor Ray Dalio said Bitcoin isn’t a good investment because governments will make it illegal.
• He also said the cryptocurrency was too volatile.
• Dalio instead praised gold and central bank digital currencies.
  
  
  

Bitcoin isn’t a good alternative asset because governments will eventually outlaw it, according to billionaire investor Ray Dalio. 

The biggest cryptocurrency by market cap is also problematic because of its volatility and the inability to spend it on everyday goods, Dalio said in an interview with Yahoo Finance over the weekend. 

Dalio, who runs the world’s biggest hedge fund, Bridgewater Associates, said in the interview that he instead expects the world to increasingly turn to central bank digital currencies—such as a digitalized US dollar, euro or renminbi.


“Theoretically, [Bitcoin] is good, but there are three basic things—a currency has to be an effective medium of exchange, a storehold of wealth, and the governments want to control it,” Dalio said, outlining problems with Bitcoin.

“I today can’t take my bitcoin yet and buy things easily with it.”Dalio also said Bitcoin is “so volatile,” and this prevents it being useful as a storehold of wealth. He then added that governments will eventually “outlaw” Bitcoin. 
“And they’ll [governments] use whatever teeth they have to enforce that, they’ll say you can’t transact a Bitcoin, you can’t have it,” he said. “Then you’d have to be like, is it a felony, am I gonna be a felon? They outlawed gold.”“I wouldn’t prefer Bitcoin to gold.”


This isn’t the first time Dalio has criticized Bitcoin and praised gold. In January, the investor said that the cryptocurrency was too volatile—but said everyone should have some gold in their portfolio. He also showed interest in Facebook’s Libra.   

His comments come at a time when institutional investors are showing more interest in the cryptocurrency—which is partly responsible for the explosion in Bitcoin’s price, according to market analysts. 

Dalio’s key to a successful portfolio, he told Yahoo Finance, is to “diversify, diversify, diversify.” Evidently, though, that diversity doesn’t necessarily extend to Bitcoin, according to the billionaire investor.

DISCLAIMER

THE VIEWS AND OPINIONS EXPRESSED BY THE AUTHOR ARE FOR INFORMATIONAL PURPOSES ONLY AND DO NOT CONSTITUTE FINANCIAL, INVESTMENT, OR OTHER ADVICE.

Bitcoin and cryptocurrency prices have soared over the last few weeks, pushed on by a raft of positive news and boosted by the U.S. election.

The bitcoin price has also climbed after central banks around the world, including the U.S. Federal Reserve last month, have signalled they are increasingly looking into digitalizing their currencies, potentially opening up the bitcoin and crypto market to millions.

Now, bitcoin and crypto watchers are braced ahead of the European Central Bank’s (ECB) two-day annual forum, beginning today—with ECB president Christine Lagarde, who last month said the ECB "should be prepared to issue a digital euro," set to speak about the "implications of fundamental global changes for central banks.

"MORE FROM FORBESBitcoin Price: Why The Bitcoin Bull Run Could Be Just Getting StartedBy Billy Bambrough


European Central Bank (ECB) President Christine Lagarde will open the central bank's annual forum ... [+] AFP VIA GETTY IMAGESLagarde will open this year’s online event and is set to be joined by Fed chairman Jerome Powell and Bank of England governor Andrew Bailey, with globalization, climate change and digitalization on the agenda.
Cryptocurrency traders will be on the look out for remarks from senior central bankers as to how central bank digital currency (CBDC) research and development is progressing and how governors expect CBDCs to impact existing digital currencies, like bitcoin.

"Central bank digital currencies will be a net positive for bitcoin," Richard Paulsen, the chief executive of Oslo-based Arcane Media and Research, said via email, explaining how he expects CBDCs to affect bitcoin and cryptocurrency markets and use.

"The structure of a CBDC, in the retail markets, will definitely be in the form of a token. This also means that for it to work as a payment method, payments solutions have to be changed from today's analogue world, to a truly digital one.

This will make it much easier for e-commerce to switch between CBDCs and bitcoin on each individual transaction.

"Last month, Lagarde said she wanted to make "sure the euro is fit for the digital age," in a statement alongside an ECB announcement that it was "[intensifying] its work on a digital euro.

"CBDCs have become a hot topic among central bankers over the last couple of years, with Facebook's plans for its bitcoin-inspired libra cryptocurrency pushing countries around the world into action amid fears a popular private digital currency could undermine monetary policy.

So far, DeFi hacks made up $98 million, or roughly 21 percent, of total crypto theft volumes in 2020. Funds from KuCoin hack, which totaled nearly $281 million, were laundered through one of the largest decentralized exchanges in the world—Uniswap.

“The USD value locked in DeFi has grown exponentially in 2020 thus creating potential new money laundering risks as hacked DeFi protocols make up the majority of crypto thefts in 2020 and decentralized exchanges were the ramp of choice for 2020’s KuCoin hack,” the report said.

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ParagonEX Dynamic Ready for FM Virtual Summit 2020Go to article >>Cryptocurrency user and investor losses also increased due to the abundance of cross-border transactions, which accounted for 74 percent of the bitcoins moved in exchange-to-exchange trades. Out of this figure, an analysis further revealed that users of Bitcoin ATMs in the US sent 88 percent of their transacted funds to offshore, high-risk exchanges.

According to CipherTrace’s report, the majority of the funds were linked to investment scams and Ponzi schemes. Although both scam categories represented a majority of the funds cryptocurrency scammers obtained, they did not account for the full losses.

Apart from them, they also used blackmailing, fake cryptocurrency mixers, phishing and fake token sales.

Chinese Scams Remain the Main Drivers for the Surge

The latest change in correlation has come amid a health crisis triggered by the coronavirus pandemic. Per the security firm, scammers have been taking advantage of the explosion of scams related to the coronavirus outbreak. By presenting themselves as members of popular health and charity organizations, they trick victims into sending them bitcoins.

The Ciphertrace’s newest report follows the firm’s previous research which revealed that major US banks unknowingly process every year roughly $2 billion in crypto transactions that go undetected. The firm claims that these funds stem from money service businesses that deal with cryptocurrencies like exchanges and brokerage services.

CipherTrace, which is backed by venture firms such as Mike Novogratz’s Galaxy Digital, also works with a bank’s existing monitoring tools to enhance anti-money laundering (AML) processes like tracing the source of on-chain funds and matching user IDs to problematic wallet addresses.

A former software engineer at Microsoft received a nine-year prison sentence Monday for an elaborate multi-million dollar criminal scheme involving bitcoin and digital gift cards.

Ukrainian citizen Volodymyr Kvashuk, 26, was sentenced in the U.S. District Court in Seattle for 18 federal felonies related to his scheme to defraud Microsoft of more than $10 million. This marks the first case of its kind in the U.S., according to a press release by the Department of Justice.

Kvashuk was involved in the testing of an online retail sales platform for Microsoft from August 2016 until he was fired in June 2018. He had used his employee access to steal “currency stored value,” (CSV), namely digital gift cards. He then resold that value online and used the proceeds to fund a lavish lifestyle including a $1.6 million lakefront home and a $160,000 Tesla car.

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What initially began as a small sum of $12,000 in CSV using his own email account access, Kvashuk eventually moved on to email accounts belonging to other employees in order to mask the growing thefts. Kvashuk then employed a bitcoin (BTC, -0.08%) mixing service attempting to conceal the source of funds arriving in his bank account.

“Stealing from your employer is bad enough, but stealing and making it appear that your colleagues are to blame widens the damage beyond dollars and cents,” said Brian Moran a U.S. attorney for the Western District of Washington.

Over a period of seven months, Kvashuk’s illegal activity saw a total of $2.8 million in bitcoin transferred to his bank and investment accounts. He then filed fake tax return forms claiming the bitcoin had been a gift from a relative, according to the department’s statement and court records.

Kvashuk must now pay more than $8.3 million in restitution – the value of CSV redeemed by third parties who had purchased stolen Microsoft gift cards. The software giant was able to block a further $1.8 million in CSV redemptions totaling more than $10.1 million, according to a court memorandum filed on Nov. 2 in the Western District of Washington.

In February, Kvashuk was convicted of five counts of wire fraud, six counts of money laundering and two counts of aggravated identity theft by a Jury. His sentencing concludes a 16-month trial.

The Ukrainian citizen was also convicted on two counts of filing false tax returns, and one count each of mail fraud, access device fraud and access to a protected computer in furtherance of fraud, a court judgment document shows.

“Kvashuk’s criminal acts of stealing from Microsoft, and subsequent filing false tax returns, is the nation’s first bitcoin case that has a tax component to it,” said Ryan Korner, IRS Special Agent.

“Today’s sentencing proves you cannot steal money via the Internet and think that bitcoin is going to hide your criminal behaviors.”

See also: US Charges 6 With Laundering Mexican Drug Cartel Cash Using Crypto and Casinos

In 2017, when everything concerned with cryptocurrency and blockchain still looked fresh and interesting, it seemed that there would be no day without a new “revolutionary” project or idea.

Decentralized financial system, decentralized torrent tracker, decentralized office documentation system. Decentralized, decentralized, decentralized.

The overuse of terms like “transparent,” “distributed” and “blockchain-based” soon made most press papers look generic.

The closer we got to the peak of the Bitcoin price at the end of 2017, the more absurd the names of new projects became: “Ethereum-based payment system for slaughterhouse industry workers,” “decentralized blockchain-based dwarf horse breeding platform,” “peer-to-peer personal banking service for divorced blind people,” and so on.Who would ever need any of that, one might ask.

Well, in many cases, nobody. Of the several thousand cryptocurrencies launched since the spread of blockchain technology, only about 30 are currently of any investment interest.

Following cryptocurrencies, many crypto exchanges launched on the wave of blockchain popularity are dying — they just have nothing to trade anymore. The situation is especially visible on review platforms, which store cards of hundreds of closed projects, often together with angry user reviews.

Let’s take a look at a few projects and analyze the reasons for their failure.

Telegram Open Network, or TON

In late 2017 to early 2018, it was first reported that Telegram was planning to launch its own blockchain platform and native cryptocurrency.

Also known as Grams, the TON coins were intended to be based on Telegram Open Network, with the TON blockchain at the core of the platform. In the project white paper, the developers presented this future coin as a potential standard cryptocurrency that could be used for the regular exchange of value in daily life.

It was stated that while Bitcoin (BTC) was considered “digital gold” and Ethereum was a platform for token crowd sales, this new TON cryptocurrency would be a substitute for traditional money and traditional payment systems such as Visa and Mastercard.

According to the white paper, other cryptocurrencies lacked the qualities required to attract a mass consumer. In its turn, Telegram would be able to implement a system eligible for mass use, given its expertise in encrypted distributed data storage, experience in creating user-friendly interfaces, and an enormous user base.

While the company did have a point in part of its claims, to me all of it looked like a huge PR campaign. Why should Telegram implement this new financial system and not some corporation with experience in the financial services industry?

How would it be able to distinguish this new currency from other, similar products? How would it be any better than traditional financial systems being implemented by a large centralized company?

No answers were given. However, the Telegram initial coin offering, launched in 2018, was a huge success. The company was able to raise $1.7 billion from investor funds in two private token sale rounds, and that was really promising.

Related: Exclusive: New report reveals details of Telegram’s TON blockchainBut it didn’t end well. On May 12, 2020, Pavel Durov announced that Telegram would officially terminate its involvement with the project after a long legal battle with the United States Securities and Exchange Commission.

 Surely, the company didn’t have the legal resources necessary for implementing such an ambitious idea. Most likely, technical difficulties and strong competition on the market also played a role.

Related: SEC vs. Telegram: Part 1 — Key takeaways for nowFor me, this case epitomizes the whole cryptocurrency hysteria of 2018 — a company that gets involved in an enterprise for which it is not ready, either legally or technologically, without a clear positioning of the product.

The end result is failure.

Petchains

Petchains was presented as the future global information management system and trading platform for the pet market. According to its press papers, the system would allow its users to maintain and keep data of the animals living in homes and shelters.

The presented project goal was to create a community of pet owners, experts, professionals, institutions, service providers and volunteers.

The system was intended to be developed using blockchain and big data technologies as usual. The initial funding was going to be gathered through the process of an initial coin offering.It’s a good question if the world really needs a blockchain-based information and trading platform for the pet market.

I wouldn’t say there are many problems with over-centralization there. Pet shops are usually chosen by customers after analyzing brand reputation and online presence.

Some problems that customers on this market may face include unreliable information about the acquired animal’s health or previous owners. However, these difficulties comprise not a technical, but a legal problem that is unlikely to be solved using blockchain technology.

Moreover, since animal welfare laws vary between different countries, creating a unified international platform in this field is a legally challenging task, hardly suitable for a small technological startup.

The Petchain project team consisted mainly of no-names who had no proven experience in any serious projects. It was not even possible to say for sure whether these were real people — some of the project advisors turned out to have been presented with fake photos.

Despite some marketing efforts, no serious funding was attracted to the project. At the moment, the official website of the project is inactive and its social media accounts haven’t been updated for more than a year.

The link that used to lead to the project’s white paper now contains a text describing in general terms the reasons for failures in the cryptocurrency industry.

Wiki token

One more dead project with an incoherent, not thought-through idea at the base of it.Wiki token (WIKI) was an Ethereum-based, ERC-20 compatible token designed to be used as a means of payment at the so-called Crypto University. This future platform, built around the Bitcoin Wiki project, was described as a totally independent, decentralized, censorship-free educational system.

The learning courses for Crypto University were meant to be created by members of the project community. For writing articles and creating courses, these members would get the previously mentioned ERC-20 Wiki tokens. These tokens would be listed on various crypto exchanges and could be spent on other Crypto University courses.

I first noticed this project in 2018, and it didn’t make much sense right from the beginning. First of all, what kind of secret knowledge is there in the cryptocurrency industry that it should be distributed using token-based payment systems? How would it compete with other content, available for free?

Theoretically, it’s possible to create a platform similar to Coursera based on blockchain. Crypto University, like Coursera, could become a platform that brings together creators and consumers of educational materials. But here, some difficulties arise.

The value of an educational product is usually based on the reputation of its creators. Most of the courses at Coursera are university education programs created by well-known, highly reputable institutions.

These courses include interaction with a teacher, who is also a well-known education professional. Upon completion of a course, students usually receive certificates recognized by companies and educational institutions.

All these factors add up to the value of the course, and it’s thanks to them that people are willing to pay for it.In its turn, the Wiki token project could hardly offer any of the above. No collaboration with large institutions or renowned educators.

Moreover, the highly specialized area of ​​expertise (cryptocurrency and blockchain) chosen did not imply the presence of educational professionals who could potentially create valuable educational content. Why would it be any better than free YouTube videos or easily searchable internet articles?

What we see here is just another technical embodiment of a dubious business idea. Having neither a well-thought-out concept nor a product, the team rushed to implement it using fashionable technology.

The result is a technical wrapper with no content and no interest outside of blockchain hysteria.As of October 2020, the project’s website is no longer available and its social media accounts have been dead for a couple of years.

Conclusions

The projects listed above did not in fact offer anything except technical execution that was fashionable at the time. Hastily launched on the wave of blockchain popularity, with no market or audience research, they were unable to offer any meaningful value to a potential customer.

One of the key marketing rules: Sell the problem to be solved, not the product you offer. Product developers should always think about consumer needs first. Otherwise, they risk ending up in the same way as the developers of the projects mentioned above — creating only product packaging that has no intrinsic value.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.Bert Kozma is a writer and an associate editor at Cryptogeek.info.

Previously a sales and marketing expert, he has been an author covering cryptocurrency and financial markets for the last decade. He holds a bachelor’s degree in international business from Saimaa University of Applied Sciences.

• Thousands of bitcoins -- worth $1 billion -- were seized by law enforcement this week in what the Justice Department said was the largest seizure of cryptocurrency in the history of agency.
• The cryptocurrency is linked to sales of illicit drugs and goods on Silk Road, a dark web marketplace that shut down in 2013.
• “Silk Road was the most notorious online criminal marketplace of its day,” says U.S. Attorney David Anderson of the Northern District of California. “The successful prosecution of Silk Road’s founder in 2015 left open a billion-dollar question. Where did the money go?”

Omar Marques | LightRocket | Getty Images


The U.S. government seized an unprecedented $1 billion worth of bitcoin linked to criminal marketplace, the Silk Road.Thousands of bitcoins were taken by law enforcement this week, in what the Justice Department said was the largest seizure of cryptocurrency in the history of the agency.

“Silk Road was the most notorious online criminal marketplace of its day,” U.S. Attorney David Anderson of the Northern District of California said in a civil complaint Thursday. “The successful prosecution of Silk Road’s founder in 2015 left open a billion-dollar question. Where did the money go?”

What’s driving the bitcoin rally?

Silk Road allowed people to buy and sell drugs and other illegal goods, and use bitcoin to anonymously fund those transactions. The dark web marketplace was shut down by U.S. federal authorities in 2013 and its founder, Ross Ulbricht, was sentenced to life in prison two years later.

Bitcoin has since taken off as a mainstream investment vehicle in recent years. It climbed above $15,000 on Thursday, hitting the highest level since January 2018. The cryptocurrency has more than doubled year to date.

This week, London-based blockchain analysis firm Elliptic said that it picked up on the massive movement of bitcoin spurred by the DOJ. The company reported 69,369 bitcoins — worth about $1 billion — had been moved out of a bitcoin wallet, which had the fourth-highest balance of any in the world.

Tom Robinson, co-founder and chief scientist of Elliptic, said the movement of bitcoins “may represent Ulbricht or a Silk Road vendor moving their funds” but that it “seems unlikely that Ulbricht would be able to conduct a bitcoin transaction from prison.

”The U.S. agencies were able to track down those illicit funds through a unit within the IRS that specializes in tracing virtual currency transactions. The IRS agents were able to identify 54 new bitcoin transactions executed by the Silk Road, which appear to be proceeds of some of that illegal activity, the complaint said.

The agency was then able to trace that money to a specific bitcoin address that appeared to have hacked the bitcoin funds from the Silk Road.While the Silk Road was in operation, thousands of drug dealers and other unlawful vendors used it distribute illegal drugs, unlawful goods and services to well over 100,000 buyers.

At the time it was taken down seven years ago, Silk Road had nearly 13,000 listings for illegal drugs and “many more listings” offering illegal services such as computer hacking and murder for hire, according to the complaint. Those generated sales totaling more than 9.5 million bitcoins.

The complaint also alleges that the Silk Road used a process to make it harder to track individual transactions of cryptocurrency.The forfeiture could be temporary though. The U.S. still needs to prove its case before a judge before it can control the bitcoin funds for good.--- CNBC’s Ryan Browne contributed reporting.

Cred, the US-based cryptocurrency lending platform, has filed for bankruptcy, as users become even more anxious about the state of their funds.

• Shortly after suspending withdrawals and deposits to its platform, the crypto lending service Cred has filed for Chapter 11 bankruptcy protection. 
• CryptoPotato reported in late October that the US-based platform had temporarily suspended all funds inflows and outflows while assisting law enforcement agencies in investigating an “incident.” 
• According to an official announcement from this past weekend, Cred INC. has “commenced a voluntary Chapter 11 case in the United States Bankruptcy Court for the District of Delaware to explore strategic alternatives.” 
• Some of the alternatives include the restructuring of its balance sheet or the sale of the business as a going concern in a court-supervised process. 
• The statement indicated that the cryptocurrency lending platform has customers in over 100 countries. The company intends to “use the Chapter 11 process in its attempt to maximize the value of its platform for its creditors.”
• Although Cred previously claimed that none of its systems were compromised, users are hesitant to know what is happening with their funds, especially after this latest development. 

• Additionally, Cred also announced the appointment of a new Independent Director to its Board – Grant Lyon. He will also serve as the Chair of the Restructuring Committee during the ongoing Chapter 11 process. 

THERE'S A LOT OF BUZZ about Bitcoin these days.In late October, the price per bitcoin reached a new 52-week high on the news that digital payments giant PayPal Holdings (ticker: PYPL) would allow customers to trade bitcoins and other cryptocurrencies.


According to Ian Balina, founder of cryptocurrency intelligence company Token Metrics, Bitcoin is the greatest investment opportunity of our generation. Other major businesses such as Microsoft Corp. (MSFT), Overstock.com (OSTK) and AT&T (T) accept bitcoin as payment, demonstrating a sign of broader adoption.If Bitcoin is indeed here to stay, investors should know if it's worth jumping on the bandwagon now. Below you'll find the history, supply and demand, and other factors that influence current and future bitcoin price movements:

• The history of Bitcoin.
• Bitcoin versus other assets.
• Understanding the cryptocurrency market.
• Reasons to consider buying.
• The bottom line: Investing in Bitcoin.
• 
  

The History of Bitcoin

Bitcoin began on a computer in 2008 during the last financial crisis.Satoshi Nakamoto, a pseudonym, is regarded as the founder of Bitcoin. It was developed as a decentralized, digital currency free from governmental oversight. The cryptocurrency is stored on a computer and sent between users across a network without the need for an institution or government intermediary.

[ SEE: 7 Boom or Bust Risky Stocks to Watch. ]

During its first year, miners or computers involved in cryptocurrency creation traded bitcoins for fun. The first bitcoin payment occurred in Florida on May 22, 2010, when a man bought two Papa John's pizzas worth $25 for 10,000 bitcoins. At that point, four bitcoins equaled one penny.

As of November 3, 2020, one bitcoin is worth around $13,688.70 – which means the bitcoins used to buy those two pizzas would now be worth nearly $137 million.

Since then, many types of cryptocurrencies have been created, all with varying degrees of success. This expanded the code behind Bitcoin's blockchain – a digital ledger for recording transactions – and enabled other uses for the technology.

Bitcoin's price has exploded during the past six years from $333.60 on November 3, 2014 to a peak value of around $19,140.80 on December 17, 2017.

(COINDESK)Of course, the cryptocurrency has fallen far from its peak to where it is today. This price volatility, along with increasing competition and limited adoption, raises the question of whether Bitcoin is worth investing in.

Bitcoin vs. Other Assets

There is an abundance of positive sentiment around Bitcoin right now.Some investors compare Bitcoin to gold as a potential store of value as it increases in relative worth against both the U.S. dollar and gold.

"Unlike fiat currencies, Bitcoin cannot be hyperinflated. Its blockchain is coded so that there will never be more than 21 million bitcoins in existence, and there are approximately 2.8 million left to mine," says Steve Ehrlich, CEO and co-founder at Voyager Digital in Stamford, Connecticut. The price of this crypto asset should rise as demand outstrips supply, and total supply is capped.

The allure of investing in Bitcoin is underscored by well-known firms buying and accepting digital assets. At the beginning of October, Square (SQ) bought 4,709 bitcoins for $50 million, or $10,617.97 per coin, while PayPal announced its intention to integrate the cryptocurrency into its platform in 2021 later that month.

Understanding the Cryptocurrency Market

Just because bigger players are joining the Bitcoin party doesn't mean that ordinary investors should buy in. Knowing the risks of any investment is as important as grasping potential gains.

Ulrik Lykke, executive director at cryptocurrency hedge fund ARK36, echoes a well-known mantra: "Invest in assets that you understand." Before investing, Lykke recommends performing your due diligence and understanding how Bitcoin works. The internet is replete with cryptocurrency educational resources.

[ READ: Sign up for stock news with our Invested newsletter. ]

Lykke says that Bitcoin offers an excellent reward-to-risk profile. One way to see this is by looking at the Sharpe ratio – a common risk metric used to help investors understand the return of an investment in relation to its risk. The ratio is the average return earned in excess of the risk-free rate or government Treasury bill return per unit of volatility or total risk.

Woodbull.com analyzed the Sharpe ratio of Bitcoin in contrast with other assets to calculate its reward-to-risk profile. The data found that when adjusting for risk, the potential Bitcoin returns are higher than those of other assets such as gold, U.S. stocks, bonds, real estate and oil.

Reasons Why Bitcoin Is Worth Investing In

There are many reasons to invest in Bitcoin after understanding the market and risks.

Anthony Denier, CEO of Webull Financial, considers digital assets like bitcoins to be useful for portfolio diversification. Specifically, less correlated assets are known to help overall investment returns.

In the case of Bitcoin, Denier joins the ranks of those who consider this crypto asset to be a hedge against inflation and geopolitical uncertainty. He calls it "this generation's liquid gold." As Bitcoin becomes more widely accepted as a method of payment, it gains acceptance as a legitimate asset class.

High-net-worth investors are dipping their toes into cryptocurrency investing, says Sathvik Vishwanath, CEO at Unocoin, an open-source, decentralized digital currency and payment network. With low interest rates and global macroeconomic uncertainty along weighed against cryptocurrency outperformance, the wealthy are becoming more comfortable with the asset.

Brian Estes, chief investment officer at Off the Chain Capital, adds another reason to buy Bitcoin now. Estes claims that the best time to own this crypto asset is in the 12 to 18 months after a bitcoin halving – when the pace of bitcoin creation is cut in half. Since the most recent halving was in May 2020, he believes that now is a good time to invest.

[ SEE: What's the Best Cryptocurrency to Buy in 2020? 7 Contenders. ]

Bottom Line: Bitcoin Investing

Bitcoin evangelists are on board with the cryptocurrency's benefits, but like any investment, there are also risks.

Bitcoin might have a rosy future, but imagine if you had purchased it on December 17, 2017 for $19,140.80 per bitcoin. Your investment would have lost money during the subsequent three years.

At the recent price of $13,688.70 per coin, your three-year investment declined by 28.48%.

When investing, it's wise to buy low and sell high – but Bitcoin is difficult to value. It's volatile and lacks the dividend payments of many stocks and bonds. Actually, supply and demand may be among the major factors in its valuation.If you think Bitcoin is a good investment for you, consider its risk-to-reward profile and do your homework before investing.

HONG KONG (Reuters) - Hong Kong will regulate all cryptocurrency trading platforms operating in the financial hub, the city’s markets watchdog said on Tuesday, changing its previous “opt in” approach.Financial regulators around the world are still assessing whether and how they should regulate the cryptocurrency industry.

Investor protection and preventing money laundering are particular concerns.Other financial centres in Asia such as Japan and Singapore have licensing regimes which require all cryptocurrency trading platforms to be regulated.

In contrast, while Hong Kong’s Securities and Futures Commission (SFC) launched a regulatory framework specifically for cryptocurrency trading platforms last year, this was restricted to those platforms that traded an asset officially classed as a security or future, not just tokens like bitcoin

.“This is a significant limitation, as under the current legislative framework if a platform operator is really determined to operate completely off the regulatory radar it can do so simply by ensuring that its traded crypto assets are not within the legal definition of a security,” Ashley Alder, chief executive of the SFC, said in a speech on Tuesday.Consequently, the Hong Kong government, today, will propose a new licensing regime today under its anti-money laundering legislation, requiring all cryptocurrency trading platforms that operate there, or target investors in the city, to apply for an SFC licence, Alder said.

Dozens of cryptocurrency exchanges operate in Hong Kong, including some of the world’s largest, though many chose not to apply for a licence under the existing regime.

The SFC has not issued a full licence to any exchange, but has agreed in principle to issue a licence to cryptocurrency firm OSL Digital Securities, a unit of Fidelity-backed BC group 0863.HK, OSL said in August.

Silvergate Bank is reaping rewards for some of the risks it took by being one of the first banks to let bitcoin companies open bank accounts.

In an investor call today the La Jolla, California based bank revealed it accepted $586 million in cryptocurrency deposits in Q3 2020, bringing its total cryptocurrency assets to $2.1 billion as of September 30, 2020, compared to $1.5 billion as of June 30, 2020. Not since the record quarter of Q4 2017, when the bank took in $835 million in crypto business, has it reached such heights.

What’s interesting though, is that the bank is paving the way for how other banks can do something that has previously been the exclusive domain of off-beat cryptocurrency startups: generate actual revenue from dealing with assets issued on a blockchain.

While the bank doesn’t physically custody the assets, 928 digital currency customers generated $3.3 million revenue for the bank this quarter compared to $2.4 million for the second quarter of 2020, and $1.6 million for the third quarter of 2019.

Coming on the heels of a regulatory change that allows banks to custody so-called stablecoins and other crypto assets, and a number of other institutional investors getting into the space, the news shows a seemingly ever-increasing interest in blockchain-based assets.

Bitcoin is now selling for $12,974, down just a bit from its high on the year. The total market cap for the industry is now approaching $400 billion, according to Messari data.

“The Bank’s infrastructure has provided Silvergate with the foundation to succeed in what has become a very digital world,” said Silvergate CEO Alan Lane in a statement. “And we see an ample runway for further growth given the numerous opportunities to expand.”

In addition to being among the first banks to allow cryptocurrency companies to open bank accounts, the 2020 Blockchain 50 list member created the Silvergate Exchange Network (SEN), a centralized service that among other things lets customers make rapid purchases necessary to arbitrage cryptocurrency markets.

During pilot tests of SEN the bank approved lines of credit totaling $35.5 million, up from $22.5 million in the second quarter.

While other applications are currently in the works, the centralized solution is now only available to Silvergate customers.

However, the bank has plans to build an open-source blockchain version of the platform that anyone could use.Do you know someone who might qualify for next year’s Forbes Blockchain 50 list? Click here to see the criteria.

In July, the U.S. Office of the Comptroller of the Currency (OCC), a branch of the Treasury that supervises big banks released a notice letting banks provide a variety of services for assets issued on a blockchain, especially stablecoins that are faster and cheaper to transact than traditional currency, but backed by real-world assets like the U.S. dollar, making them more stable than bitcoin and most other cryptocurrencies.

Over the past several months, the $10 billion Stone Ridge Asset Management firm revealed a $115 million bitcoin position as part of a spin-off largely dedicated to custodying crypto-assets, Square invested about $50 million into bitcoin, and business intelligence firm MicroStrategy converted $425 million of its assets into bitcoin.

At least 20 institutional investors have already filed paperwork with the SEC showing they invested in the Grayscale Bitcoin Trust (GBTC) and Canadian digital asset manager 3iQ has $113 million sitting in its Bitcoin Fund launched in April and trading on the Toronto Stock Exchange.

See behind the scenes by registering for the Forbes CryptoAsset & Blockchain Advisor.Editor’s note: This story has been updated to show that Silvergate Bank’s record quarter was in 2017, not during this most recent quarter as originally reported.

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Michael del Castillo

I report on how blockchain and cryptocurrencies are being adopted by enterprises and the broader business community. My coverage includes the use of cryptocurrencies and… Read More

Binance Holdings Limited, the world’s largest cryptocurrency exchange conceived of an elaborate corporate structure designed to intentionally deceive regulators and surreptitiously profit from crypto investors in the United States, according to a document thought to be created by its senior executives and obtained by Forbes.

Cayman Islands-based Binance is currently responsible for about $10 billion in total crypto trades per day and its founder and CEO Changpeng “CZ” Zhao is one of the few known cryptocurrency billionaires.

The 2018 document details plans for a yet-unnamed U.S. company dubbed the “Tai Chi entity,” in an allusion to the Chinese martial art whose approach is built around the principle of “yield and overcome,” or using an opponent’s own weight against him.

While Binance appears to have gone out of its way to submit to U.S. regulations by establishing a compliant subsidiary, Binance.US, an ulterior motive is now apparent.

Unlike its creator Binance, Binance.US, which is open to American investors, does not allow highly leveraged crypto-derivatives trading, which is regulated in the U.S.The leaked Tai Chi document, a slideshow believed to have been seen by senior Binance executives, is a strategic plan to execute a bait and switch.

 While the then-unnamed entity set up operations in the United States to distract regulators with feigned interest in compliance, measures would be put in place to move revenue in the form of licensing fees and more to the parent company, Binance.

All the while, potential customers would be taught how to evade geographic restrictions while technological work-arounds were put in place.Forbes reached out to Binance founder CZ as well as its chief compliance officer Samuel Lim about the leaked document and didn’t receive a response to our questions.

Binance.US CEO Catherine Coley and Harry Zhou, the person identified as creating the document, also didn’t comment. [After the article was published CZ responded with several tweets claiming that the story was incorrect and that the document was not created by a current or former employee.

He further wrote that “Binance has always operated within the boundaries of the law.” Ed note: Chief compliance officer Lim had previously sent an email to Forbes confirming that Zhou had been a Binance employee.]

The source of the document, whose identity we’ve agreed not to reveal, says it was first presented to CZ in Q4 2018 by Binance mergers and acquisitions manager Jared Gross, an attorney who Forbes believes is actually the exchange’s general counsel.

The source says the document was created by former Binance employee Harry Zhou, a serial entrepreneur, who is the co-founder of Koi Trading, a San Francisco-based cryptocurrency exchange partially owned by Binance. 

The file is named “Presentation 2” so there may have been other strategies being considered. Still, an analysis of the document reveals that many of the specifics outlined within it, are already in place.




One of the slides from the leaked slideshow, purporting to show how the "Tai-Chi Entity" could be connected to Binance. 

FORBES

“U.S. Enforcement Mitigation”


The strategy document has four main components, Goals, Proposed Corporate Structure, Regulator Engagement Plans and Long Term License Plans. The first goal, enforcement mitigation, is designed to minimize the impact of U.S. regulation.

It explicitly mentions the need to undermine the ability of “anti-money laundering and U.S. sanctions enforcement” to detect illicit activity.

More specifically, it describes a detailed strategy for distracting the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC), the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the New York Department of Financial Services (NYDFS). 

To do this, the document advocates for participating in the U.S. Department of Homeland Security (DHS) Cornerstone Program for detecting weaknesses in the financial systems.

 A representative of the Department tells Forbes that Binance.US did participate in the Cornerstone program, as a standard part of the process of becoming a Money Service Business, but declined to comment further. 

Interestingly, Binance itself is now a client of the DHS-funded CipherTrace, based in Menlo Park, California, one of the first security firms with technology explicitly designed to investigate on-chain transactions of the exchange’s own cryptocurrency.

Another CipherTrace client is the U.S. Securities and Exchange Commission, which signed a one-year deal with CipherTrace this July. While the SEC declined to comment as to whether or not its engagement of CipherTrace was part of a larger investigation into Binance or Binance.US, the contract explicitly states that one of the main reasons for selecting Cipher

Trace is it is “the only known blockchain forensics and risk intelligence tool that can support the Binance coin (BNB) and all tokens on the Binance network.”“Insulate Binance from US enforcement”

The proposed corporate structure section starts off with a bold bullet point, “Key Binance Personnel continue to operate from non-U.S. location to avoid enforcement risks.”  In the same section the document details how the Tai Chi entity would act as a magnet for regulatory inquiries, and should be willing “to accept nominal fines in exchange for enforcement forbearance.

” Though not readily apparent, the document reveals that the Cayman Islands-based holding company will be connected to an unnamed Delaware C-corporation and the separate Tai Chi entity (see image above), showing how revenue from the U.S. business could be funneled back to Binance, the parent company.

“License and service fees paid by the US Service company to Binance are functionally US-sourced trading fees,” the document states.
 But unlike an actual subsidiary whose parent company could be held accountable for regulatory violations, the Tai Chi entity would have little more than a contractual relationship, further “insulat [ing] Binance from U.S. enforcement,” according to the document.

Essentially, it would be a decoy. The structure diagrammed in the 2018 document was initiated in August 2019 when Delaware-domiciled BAM (Binance America) Trading Services, was registered as a C-corp with an alternative name of Binance.US.

The document describes how BAM Trading would license trading and wallet technology from Binance, but according to BAM Trading CEO Catherine Coley, there are no ownership ties to Changpeng Zhao’s Binance. While Coley confirms that CZ sits on her company’s board of directors, she declined to comment on who actually owned the company.

“We don’t comment on ownership interests in BAM trading,” she says.The 2018 document lays out a plan for its new subsidiary to be FinCEN compliant initially in at least 30 U.S. jurisdictions. 

Binance.US, registered as BAM Trading, has exceeded that goal and currently has a Money Service Business or MSB registered with FinCEN in 59 U.S. states and jurisdictions.“...with no expectation of success.

”In a part of the leaked powerpoint labeled “Regulator Engagement Plans” it shows that Binance.US is expected to engage the Securities and Exchange Commission, the Commodities Futures Trading Commission and the New York Department of Financial Services, but importantly it explicitly notes that it doesn’t expect to gain approvals from any of them, repeatedly using the phrase “with no expectation of success.

”In the case of the NYDFS, Binance (parent) did get permission to offer its U.S. dollar stablecoin to U.S. investors in 2019. However, the permission stopped short of a full BitLicense, which may just be part of the plan. “Consider joining a self-regulatory organization…

”Other regulator engagement plans include joining crypto’s various self regulatory groups in an effort to “demonstrate compliance willingness.” Mentioned specifically is Tyler and Cameron Winklevoss’s Virtual Commodity Association, a self-regulatory group, but Binance.US, the Tai Chi entity, has not yet become a member. 

It has however joined several other non-profit trade associations, including DC-based Chamber of Digital Commerce and the Chicago Defi Alliance.In August Binance.US joined the non-profit Blockchain Association, which describes itself as the “unified voice of the blockchain and cryptocurrency industry.

” Almost immediately, Blockchain Association founding member Coinbase, a fierce competitor to Binance, resigned citing concerns over the organization’s credibility. While Coinbase never publicly mentioned Binance.US as the reason for its departure, a Coinbase representative confirmed that lax vetting prompted its exit from the association.

Specifically, Coinbase has concerns that Binance.US did business with American investors prior to receiving its MSB license from FinCEN. The Blockchain Association responded to Coinbase’s departure with a tweet expressing regret at the loss, and emphasizing what it describes as “neutral membership criteria” “Strategic treatment of VPN use at Binance to minimize economic impact” Notably, the document explicitly calls for the “strategic” use of virtual private networks (VPNs) that obscure traders’ locations as a way to evade regulatory scrutiny by the SEC and the NYDFS.

 In addition to a guide to using VPN’s on Binance’s website, CZ has in multiple instances advocated for VPN use as a way to obscure a user’s location. In a June 2019 tweet he wrote that VPNs are “a necessity, not optional.

” “Bitcoin doesn’t have an office.”

Among crypto exchanges Binance is renowned for its execution speed, unique incentives and for its willingness to flout convention. Binance was founded in China in the summer of 2017 by Changpeng Zhao, 44, a cryptocurrency veteran with prior experience at bitcoin wallet provider Blockchain LLC and cryptocurrency exchange, OKCoin.

Born in Jiangsu, China, CZ immigrated to Canada in the late 1980s after his professor father was accused of being a "pro-bourgeois intellect,” he told Forbes in 2018. After building a system for matching orders for high-speed traders on the Tokyo Stock Exchange and Bloomberg’s Tradebook, he founded Binance, using a similar interface.

Like other crypto-exchanges, the company makes money by charging trading fees, margin interest fees, futures fees and deposit and withdrawal fees. Unlike other cryptocurrency exchanges though, Binance makes its own digital currency, the BNB coin. 

Days before Binance officially launched in July 2017, the exchange raised about $15 million by selling BNB, which could in turn be used to pay fees, and was given away as an incentive for recommending new Binance traders. Binance’s novel approach, which is somewhat reminiscent of Amway-style multi-level marketing organizations, has created loyalty among its customers, and solved the nagging problems of retention experienced by many exchanges.

 The digital currency, whose float the company actively controls, is now worth $4.4 billion.While the global market for spot trading cryptocurrency is rather easy to access, derivatives, where investors can leverage their investment by as much as 125X, are highly regulated in the U.S. and elsewhere, with few reputable competitors.

Traders flock to Binance, in part because of the leverage they can employ. Binance’s unique crypto-exchange model has been a huge success, especially in Asia. Its growth has been so rapid that only a year after launch, CZ was listed among the Forbes richest in crypto with an estimated wealth of between $1.1 and $2 billion.

Parent company, Binance is currently known to be Cayman Islands based but the exchange first launched in Shanghai. Later as the Chinese government cracked down on cryptocurrency trading, the company moved its headquarters to Japan and then Malta. In May 2020 CZ told former Forbes staffer Laura Shin that Binance’s headquarters were wherever he was.

His answer wasn’t necessarily evasive but presented as a rally cry for blockchain’s ideals of decentralized power. “I think what this is is the beauty of the blockchain,” he said. “Like where’s the Bitcoin office?

Because Bitcoin doesn’t have an office.”Last April Binance launched a distributed exchange, or DEX, that purports to directly connect counterparties in a trade without the direct involvement of Binance or any other middleman.

The exchange is built directly on Binance’s own blockchain called ‘Binance Smart Chain’, similar to bitcoin, and therefore more difficult—or impossible—to shut down. Think of it as plumbing owned by no one and everyone.

Because the exchange is built on the public blockchain, American investors, or anyone else, can use it without disclosing their location or personally identifiable information. DEX, currently in its infancy, is now transacting $340,000 a day.

Though Binance prohibits U.S. residents from trading on its main exchange, many already are customers, side-stepping the “geo-fencing” restrictions currently in place. Instructions for how to do so are widely available, including a post on industry news site CoinDesk.

The exchange’s popularity among Americans prompted the creation of more compliant Binance.US, aka the Tai Chi entity, in September 2019. More than a year after its launch it is now trading a pitiful $18.7 million in daily crypto volume—perhaps just enough to be a distraction to regulators.

By contrast, parent Binance trades $2.7 billion a day in cryptocurrency spot trades per day and $7.7 billion a day in derivatives, according to CoinGecko.

The largest U.S. competitor, Coinbase Pro, trades $449 million in daily spot volume. Fueling the idea that Binance has been side-stepping American regulators, in September, Japanese exchange Fisco filed a lawsuit in the Northern District of California alleging that Binance was the go-to location for “the laundering of stolen cryptocurrency.

” To establish jurisdiction in the region, the suit asserts that the off-line computers Binance uses to store much of its cryptocurrency are in California, and that the Amazon servers the exchange uses for its cloud storage are also based in the state.

Binance has not responded to our request for comment on the case. On the same day the case was filed, the self-regulatory Financial Action Task Force (FATF), published a report highlighting that the practice of frequently changing headquarters was a key “red flag” characteristic of money laundering.

The alleged author of the Tai Chi document, Harry Zhou, is known for his experience launching American versions of Chinese companies. In 2018, Zhou worked as the general counsel at HBUS, the American arm of Huobi, another Chinese cryptocurrency exchange that set up a compliant shop in the U.S. HBUS has since closed.

Zhou is the co-founder of Koi Trading Systems, founded in August 2018 and backed by $3 million from Binance’s venture capital arm. Binance says Zhou is no longer an employee however initial documents for Binance.US list Koi Trading as sharing its address.

Forbes has learned that the Tai Chi document is currently circulating among law firms, accounting firms and others associated with Binance, and there is speculation that the FBI and the IRS may be investigating. When reached by telephone, an FBI agent in the Washington, D.C . field office initially denied knowledge of Binance and hung up. Later, the agent formally issued a “no comment.

”The questions swirling around Binance could hardly come at a worse time. With bitcoin in the midst of a bull run that has surpassed year-to-date gains of Apple, Amazon, Google and Facebook, news questioning the credibility of the world’s largest crypto-currency exchange will be unwelcome by traders.

Earlier this month four senior executives of exchange giant BitMEX were indicted by the U.S. Department of Justice for allegedly violating the Bank Secrecy Act.

 In another case crypto-exchange OKEx briefly shut down operations after it lost touch with an executive said to be cooperating with a Chinese government investigation.

All those charged at BitMEX have stepped away from daily duties. Co-founder Ben Delo says he will “defend himself against these allegations vigorously.” BitMEX released a statement saying “we strongly disagree with the U.S. government’s heavy-handed decision to bring these charges, and intend to defend the allegations vigorously.”

So far, Binance.US has been a paragon of corporate American citizenship, both playing nice with regulators, and winning a shining reputation with a series of philanthropic ventures, not the least of which was Crypto Against Covid that raised almost $5 million to fight the Covid-19 pandemic.

Binance and Binance.US are two of only five exchanges to win the highest rating on CoinGecko’s new Trust Score that measures the reliability of an exchange’s reported trading volume.

As for the Tai Chi document, perhaps the most important objective set out in the strategic plan is a directive inserted at the bottom of one of the pages. It says that eventually the entity should be consumed by its creator:

“Binance to acquire the US operation at a nominal price and rearrange its leadership when it has served its purposes.” Thus “overcoming,” fulfilling the second principle of the ancient martial art.


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Michael del Castillo

I report on how blockchain and cryptocurrencies are being adopted by enterprises and the broader business community. My coverage includes the use of cryptocurrencies and… Read More

International love scammers are luring their targets into bogus investments, allowing them to take more money from each victim, force insiders sayAbout a third of recent cases involving phoney online romances also saw targets pulled into schemes involving non-existent cryptocurrency accounts

Police insiders have told the Post that online romance scammers s are now earning big scores by luring victims into phoney investments.

Photo: Warton LiRomance scams and bogus investment schemes, two of the most common online swindles , are being combined by international fraudsters in a new tactic that has duped Hongkongers out of tens of millions of dollars in just the past three months, the Post has learned.
Force insiders said the new ruse had allowed swindlers to milk each target for higher sums, prompting police to launch a publicity campaign over the weekend to remind the public to stay vigilant.

The emerging trend, which first came to the force’s attention in June, comes as new figures show the number of internet love scams jumped by nearly 54 per cent, to 601 cases, in the first eight months of this year, up from 391 in the same period last year.

The amount involved dipped slightly to HK$143.6 million (US$18.5 million) between January and August, from HK$149.6 million over the same period last year.

Love scammers have introduced a new wrinkle into their technique – bogus investments. 

A police source said the force had dealt with 70 to 80 romance scams a month recently, with about one-third of those cases also blending in investment fraud.“Each victim lost an average of hundreds of thousands of dollars in the new ruse,” the source said, estimating the fraudsters had bagged tens of millions of dollars in the past three months.

He pointed out that the amount of money cheated via traditional love scams varied greatly, but could often involve as little as HK$20,000.

Con artists behind internet love scams typically claim to be bankers, entrepreneurs, doctors, engineers, pilots, military veterans or retirees as they befriend potential victims online. After establishing a romantic relationship with their targets, they then invent different excuses to separate their “lovers” from their cash.

The victims are instructed to download a mobile phone app that shows prices for the investment products – mainly cryptocurrency – and the trading results of their investment accounts.

“However, the app only shows the rising prices of cyber currency and the profits of their investment accounts, because it was set up and controlled by the fraudsters,” another source said. “The positive results are designed to lure the victims into investing more money.”

The victim’s money is at no point involved in an actual investment, according to the source, but simply pocketed by the scammers.

He said the victims typically realise they have been scammed only after they attempt to withdraw money and find they cannot log onto the mobile app. Their “lovers” at this point simply disappear.

In all of the cases handled by police, the victims, mostly middle-aged women, never met the object of their affection in person.In the first eight months of this year, the force dealt with 10,534 reports of deception, up 101 per cent from 5,234 in the same period last year.Police attributed the increase to the sharp rise in online shopping fraud.

 The number of cases, including people being cheated while trying to buy masks early in the Covid-19 pandemic, more than tripled to 4,950 for the period, compared to 1,415 a year ago.

According to police, the Anti-Deception Coordination Centre blocked the transfer of about HK$2.3 billion connected to 580 deception cases and prevented victims in more than 180 such cases from sending money to fraudsters.

Cyber criminals running a cryptocurrency scam successfully breached the campaign website of under fire US president Donald Trump to briefly replace it with a JavaScript mock-up of an FBI warning, in the latest exploitation of the contentious US election process by cyber criminals.

The fake warning said that the attackers had compromised multiple devices with access to Trump and his relatives, and had evidence that the US government was behind the Covid-19 pandemic – this latter point a fairly widespread conspiracy theory.

The group claimed to have evidence that discredited Trump as a president and proved criminal involvement with foreign actors manipulating the election.

Getting to their point, the attackers then solicited donations in the Monero cryptocurrency via two different links, the implication being whichever link attracts the most donations would either cause them to leak whatever data they claim to hold, or keep it under wraps.Trump’s campaign director, Tim Murtaugh, said via Twitter:

“Earlier this evening, the Trump campaign website was defaced and we are working with law enforcement authorities to investigate the source of the attack.

“There was no exposure to sensitive data because none of it is actually stored on the site. The website has been restored.

”Niamh Muldoon, OneLogin senior director of trust and security, said: “The US elections are fast approaching and with the commotion that this entails follows bad actors looking to leverage this for their own personal gain.

“Whether or not the cyber criminals of this attack are against Trump’s presidency or not, they are playing on the political divides to reap financial reward. If individuals want to hurt Trump’s running with the exposure of his ‘most internal and secret conversations’, they need to donate cryptocurrency.

If they want to protect the president, they need to donate cryptocurrency. Either way, the bad actors win,” she said.

Historical importanceMike Beck, global CISO at Darktrace, said the hack was no surprise whatsoever given the historical importance of the 2020 election cycle.“Political parties and individuals will be battling attempts against their systems on a daily basis. Some attacks are more successful than others, some are advanced and others less so.

This is an example of an unsophisticated scam but this does not preclude involvement from nation-state affiliates, and we shouldn’t ignore that the hackers were still able to gain access to the website and cause mischief,” he said.A more pressing concern for Trump, and his rival Joe Biden, would be how to detect more sophisticated forms of cyber attack, said Beck.

“In this new era of deepfakes, disinformation and increasingly sophisticated hackers, governments, political parties, the media and campaign groups must all be on the leading edge of innovation to protect targeted data and minimise the impact of any attempts to disrupt their activities,” he said.

OneLogin’s Muldoon added: “It also highlights a need for Trump's security advisors to complete a comprehensive review of all account access associated with him and his campaign to prevent further damage to his brand reputation.

”The temporarily successful hack bears some similarity to the July 2020 breach of Twitter, in which a gang of teenagers exploited insiders at the social media platform to gain access to celebrity accounts in order to scam their followers into handing over more than $100,000 of cryptocurrency.Read more about cryptocurrency fraudErratic tech baron John McAfee allegedly promoted initial coin offerings without disclosing he was being paid to do so.Apparent insider breach at Twitter saw so-called “blue tick” accounts of business people, politicians and celebrities hijacked to promote a Bitcoin scam.Lazarus, the APT group behind the infamous WannaCry incident is targeting cryptocurrency operators, according to new research.While it is unknown if the attackers compromised any insiders at Trump’s campaign, Tom Lysemose Hansen, chief technology officer of app security specialist Promon, said the short-lived attack would have undoubtedly borne some fruit for its perpetrators, even if they only clicked on a link and did not intend to hand over any donations.

“This in itself is very dangerous and goes to show just how, at the end of the day, nobody’s accounts or websites, whether they be government-backed or personal, are ‘unhackable’. In fact, even the most secure, high profile accounts are vulnerable should the user fall victim to a phishing attack which seeks usernames and passwords,” said Hansen.

“This news also follows our recent discovery that both Trump’s and Joe Biden’s official election apps are vulnerable to a well-known and critical Android vulnerability that allows hackers to easily hijack apps and overlay fake screens which can depict anything the attacker wants, including screens that ask the user to hand over sensitive information, such as usernames and passwords,” he added.

Edgescan operations lead Michael Barragry assessed that the Trump website was possibly breached through the exploitation of an unpatched content management system (CMS), an application that allows the creation and management of digital content.

Such attacks can be launched with minimal technical expertise – often malicious actors will simply use disclosed vulnerabilities and publicly available exploits, and then scan the internet for at risk instances.

It is unknown at the time of writing whether or not the person or persons responsible had an IQ of over 197, or 15% of Trump’s password, although last week Dutch researchers also claimed to have successfully hacked Trump’s Twitter account using the password maga2020, which would appear if true to be 100% of a password.

• Bitcoin will rise in value no matter who wins the US election, according to Jeff Dorman, chief investment officer at cryptocurrency hedge fund Arca.
• A string of positive headlines for Bitcoin last week have lowered the fear-factor for investors to enter the digital market, Dorman told Business Insider in an interview.
• "Most conservative people on Wall Street don't want to be the first and don't want to be the last," he said.  "Once there's that precedence set, I think it opens the floodgates for everyone else."
• While there's no specific presidential candidate who will make a difference to Bitcoin, Joe Biden might be more favorable for the cryptocurrency in the long term, he said.
• Visit Business Insider's homepage for more stories.

Bitcoin and other risk assets are not reliant on who wins the US elections, as they will shrug off market uncertainty regardless of the outcome, according to Jeff Dorman, chief investment officer, at cryptocurrency hedge fund Arca. 

"They just want to know that there's a winner," Dorman told Business Insider in an interview on Thursday.

He said while a majority of investors expect a hung election, or one in which neither party has an overall majority, it doesn't matter who wins because all risk assets will see a huge rise. 

Longer term, however, a Joe Biden victory would be better for Bitcoin and gold because that would imply an unprecedented level of government spending, he said.

"I would say Democrats are better for inflation hedges, but as long as there's a clear winner at some point, everything's going higher," Dorman said.Bitcoin has surged more than 4% this week to $13,282 as of Friday, and is up 80% year-to-date, putting the digital currency within proximity to its June 2019 high of $13,880.Read more: 

'We are in a depression': A 35-year market vet says more stimulus will be powerless to prevent a coronavirus-induced economic meltdown- and warns stocks 'have a lot further to fall'

It benefited from a stream of supportive headlines last week. PayPal said it would enable users to buy, sell, and transfer Bitcoin, investor Paul Tudor Jones called it the "best inflation trade," and fintech firms including Square, Microstrategy, and UK fintech Mode disclosed that they had bought Bitcoin as part of their cash reserves.  

Dorman, who has been in the asset management business for 17 years, said a billionaire investor like Tudor Jones investing in Bitcoin won't necessarily ignite a bull market, but it has lowered the fear factor of entering the digital asset market.

"Most conservative people on Wall Street don't want to be the first and don't want to be the last," he said.  "Once there's that precedent set, I think it opens the floodgates for everyone else. I don't think that alone is enough to start a bull cycle, but I think it is enough to increase the total addressable market of demand for Bitcoin.

Read more: 'I'm basically going to be long growth': Billionaire investor Chamath Palihapitiya has hauled in a 997% return since 2011. He details the 5 sectors shaping his long-term investment playbook.

Dorman, who calls himself a Bitcoin bull, said fintech firms are disrupting the traditional finance industry, as they have the ability to move quicker on offering services for digital assets. 

"Look at the stock prices of traditional banks versus fintech this year and see how high the PayPals and Squares and the likes are doing relative to JPMorgan and Bank of America," he said.

"It is a huge deal. It's a bigger negative to banks than it is a positive to bitcoin, in the sense that you're now offering an additional service that banks can't provide," he said about the potential of fintechs.

Dorman does not think Bitcoin is a safe-haven alternative to the US dollar, but said it could provide a hedge against inflation.

The price of Bitcoin (BTC) abruptly dropped 4% from the day’s peak on Oct. 30 as the uncertainty in the stock market intensified. With five days left to the U.S. presidential election, Bank of America, or BofA, suggested a 20% drop is possible.

The Dow Jones Industrial Average declined 7.55% since Oct. 12. Tech-heavy stock indices performed slightly better in the same three weeks as the Nasdaq dropped 5.8%.While the correlation between Bitcoin and stocks has declined in recent weeks, the slump of risk-on assets could negatively affect cryptocurrencies.




The daily chart of Bitcoin with moving averages. Source: TradingView.com

Would a “risk-off” drive hurt Bitcoin in the short term?

According to BofA economists led by Michelle Meyer, the election result is not the biggest threat to equities.Rather, it is whether a contested election occurs that could cause the markets to rattle due to uncertainty. The markets could still rally regardless of who wins the election, but a contested election may lead to a market slump. The economists wrote:

“Landslide victory for either Trump or Biden and rapid election conclusion would likely be welcomed by markets while a severely contested election could see risk-off and drive 10-year rates materially lower.”

For Bitcoin, it is still difficult to gauge whether a potential prolonged equities dump would cause a pullback.

Since Oct. 12, while U.S. stock market indices declined by 5% to 6%, Bitcoin rallied by nearly 16%. In the last 18 days, BTC rose from $11,167 to $13,290, massively outperforming gold, stocks and the U.S. dollar.

But the confluence of Bitcoin facing a multiyear resistance level at $14,000 and the lack of certainty around risk-on assets could slow BTC’s momentum.

In the near term, as Cointelegraph reported, $13,000 serves as a large whale cluster. This means high-net-worth buyers would likely protect $13,000 as a key support area.

Since $14,000 was the previous top for Bitcoin in mid-2019, the new range would likely be found $13,000 to $13,900.If the market uncertainty persists after the election, there is a higher probability that it would place BTC in the low $13,000 region for a prolonged period, which wouldn’t necessarily be unhealthy. 

“A correction wouldn’t necessarily be unhealthy for the Bitcoin market at this point, as that may lead to further accumulation,” explained Cointelegraph Markets analyst Michael van de Poppe in his latest Bitcoin price technical analysis. He added: 

“The majority of the investors definitely want to see a straight line toward $200,000, but that’s simply not happening.”

Maximum pain for altcoins

Throughout October, alternative cryptocurrencies have found themselves in an awkward position alongside rising BTC dominance. When Bitcoin increases so fast in a short period, it could hinder the altcoin market’s recovery because it creates a volume vacuum.

According to researchers at Santiment, the sentiment around Bitcoin has strengthened in recent weeks and months. Consequently, the Bitcoin dominance index has consistently increased, dwarfing both major and small-cap cryptocurrencies. They said:

“As would be expected with $BTC’s increased #crypto market dominance, sentiment has grown more positive and dwarfed other large cap assets. Weighted social sentiment measures the positive/negative ratio of comments about assets, while also including volume.”

Bitcoin is approaching levels not seen since just after the burst of the cryptocurrency market bubble almost three years ago.

The biggest digital token by market value rose as much as 4.8% to $13,638 on Tuesday, just below the high of $13,851 set on June 26, 2019. If it surpasses that level, it would be highest since Bitcoin traded at $16,932 in January 2018, or just weeks after the token reached an all-time level of around $20,000. It dipped to $3,136 in December 2018.

Bitcoin extended gains on reports that JPMorgan Chase & Co.’s JPM Coin was going to be used this week for the first time by a customer of the bank to make a payment. Development of the coin was first disclosed in 2019.



Crypto fans have cheered a number of recent developments, from PayPal Holdings Inc. allowing customers to use digital coins to Fidelity Investments launching a Bitcoin fund and Square Inc. joining MicroStrategy Inc. in saying they invested in the coin.

“It seems that there is more excitement and that crypto will be used more often,” said Edward Moya, a senior market analyst at Oanda Corp.

“The world seems poised for a digital currency.”In addition, central banks around the world have shown greater interest in creating digital money.

Earlier this month, for instance, the European Central Bank said it will start experimenting with a digital version of the euro while holding a public consultation.

The step was seen by many as major progress toward introducing the technology.

Bitcoin has surged almost 30% this month and more than 85% this year. The Bloomberg Galaxy Crypto Index, which tracks a handful of the largest cryptocurrencies, has gained about 20% in October.

In another major blow on the decentralized finance (DeFi) sector, a hacker on Monday reportedly stole $24 million worth of cryptocurrency assets from DeFi service Harvest Finance, a web portal that lets users automatically “farm” assets for the highest returns in other DeFi projects.

The attacker reportedly targeted the protocol’s liquidity pools, performing an arbitrage attack using a flash loan, a method that enables a trader to take on massive leverage without any downside.

The hacker, however, later returned some $2.5 million.In a tweet, Harvest Finance said the hacker “manipulated prices on one money lego (curve y pool) to drain another money lego [farm USDT (fUSDT), farm USDC (fUSDC)], many times.

The attacker then converted the funds to renBTC and exited to bitcoin.

”RenBTC is a bitcoin-backed token issued on Ethereum by Ren Protocol. Coindesk reported that Harvest’s native token, Farm, dropped by 65% in less than an hour after fretful investors pulled their deposits.

It was followed by the project’s total value locked (TVL) plunging from over $1 billion to $430 million.After the hack, the funds were eventually swapped for bitcoin (BTC), but not before being swept through Tornado Cash, Etherium’s mixing service.

The hacker is reportedly well-known in the crypto community

Based on the project’s Discord, the person behind the hack was reportedly well-known in the crypto community after leaving a significant amount of personally identifiable information.

All seven bitcoin wallets holding the attacker’s funds are also known.In a series of tweets, Harvest Finance said the hack took place because of a mistake on its part and left the door open for the hacker to return the funds without any consequences.

“We made an engineering mistake, we own up to it.

Thousands of people are acting as collateral damage,” Harvest Finance said.

“We do not have any interest in doxing the attacker, (or arbitrageur). People should have their privacy,” it said.

“You’ve proven your point. If you can return the funds to the users, it would be greatly appreciated by the community, and let’s move on.

”DeFi is a fusion of traditional bank services with decentralized technologies such as blockchain. Due to its inclusive format, it also goes under the name Open Finance.

The community pushes to build alternatives to financial services that are currently present, which include items such as checking and savings accounts, asset trading, insurance, and loans, among others.

JPMorgan Chase's (JPM) digital currency is in commercial use for the first time, and the bank on Tuesday launched a new business around the technology underpinning the coin.

That follows a Bitcoin price surge over this month.So let's take a look at an example of a stock that did justVolume 0% JPM Coin — a cryptocurrency JPMorgan launched last year — "is being used commercially for the first time this week" by a big technology client, which the bank did not identify, CNBC reported on Tuesday.

The client is using the cryptocurrency for cross-border payments. The bank also introduced a new segment devoted to cryptocurrencies and blockchain, the record-keeping technology that enables cryptocurrency transactions.

That segment is called Onyx. JPMorgan hopes blockchain could reduce errors and rejections in cross-border payments by helping banks verify account information and regulatory compliance, CNBC said.

Takis Georgakopoulos, JPMorgan's global head of wholesale payments, told CNBC he believes the world is "shifting to a period of commercialization" of blockchain and cryptocurrency.

The advance for the bank's cryptocurrency follows years of theorizing over the potential for bitcoin and blockchain. Blockchain records transactions and other data on a shared ledger that allows participants to agree on the information's accuracy.

Analysts have said blockchain, as a result, has the potential to eliminate middlemen and remake everything from payments to ride-hailing to identifying theft and counterfeits.

Bitcoin prices have sailed through peaks and valleys over the years, however, as hype built but failed to materialize.IBD Live: A New Tool For Daily Stock Market Analysis

JPMorgan Stock, Bitcoin Price

JPMorgan stock fell 1.9% to close at 99.33 in the stock market today. The stock was just above its 50-day line. Shares have a Composite Rating of 47 and an EPS Rating of 72.Bitcoin rose 5% to $13,670 on Tuesday. The advance for the digital coin put it at levels not seen since early 2018.

Cryptocurrency prices jumped last week after PayPal (PYPL) announced the launch of a service that would allow users to buy and sell cryptocurrency from their PayPal accounts.

That followed similar move from fintech rival Square (SQ) earlier.

"The migration toward digital payments and digital representations of value continues to accelerate, driven by the Covid-19 pandemic and the increased interest in digital currencies from central banks and consumers," PayPal said in a statement last week.

"Mainstream adoption of cryptocurrencies has traditionally been hindered by their limited utility as an instrument of exchange due to volatility, cost and speed to transact," the statement continued.

Tackling Paper Checks, Central Banks

As part of the Onyx launch, JPMorgan has also changed the name of its blockchain-based Interbank Information Network to Liink. The Interbank Information Network, intended to speed up global payments, launched as a pilot in 2017. The network consists of more than 400 banks and corporations worldwide.

The bank also hopes blockchain could facilitate paper-check processing. JPMorgan is also looking into creating payment rails for central banks looking into creating their own digital currencies, CNBC said.

The bank, while more receptive to blockchain, was not always so receptive to cryptocurrency. CEO Jamie Dimon in 2017 called Bitcoin a "fraud."

• Bitcoin surged more than 3% on Tuesday as it approached a key resistance level at $14,000.
• Recent positive developments for the digital cryptocurrency include PayPal allowing its account holders to buy, sell, and transfer bitcoin, as well as Square's bitcoin purchase worth $50 million.
• If bitcoin is able to decisively trade above the $14,000 level, the next level of resistance traders will watch is its all-time high near $20,000.
• Visit Business Insider's homepage for more stories.

Bitcoin surged more than 3% on Tuesday to $13,480, putting the digital currency within striking distance of its June 2019 high of $13,880.

If bitcoin does surpass $13,880, it would reach its highest level in almost three years.

The cryptocurrency has benefited from a stream of positive headlines over the past week. Square said it furthered its investment in bitcoin by purchasing $50 million worth of the digital coin in a single day without disrupting the market.

Shortly after Square's announcement, PayPal said it would enable its account holders the ability to buy, sell, and transfer bitcoin, lending credibility to the crypto asset.

Institutional investors are starting to take notice. JPMorgan said last week that bitcoin looks attractive as it competes with gold as an "alternative" currency. The firm noted that millennial investors favor bitcoin over physical gold.

JPMorgan said it believes bitcoin could double or triple from current levels and would have to surge 10x to match the value of all the physical gold in the world.


"Even a modest crowding out of gold as an 'alternative' currency over the longer term would imply doubling or tripling of the bitcoin price," JPMorgan said.With bitcoin on the rise, the technicals are coming into focus as it pushes up against the last major resistance level before its all-time high around $20,000. 

That level is $14,000, just 4% above bitcoin's current price as of Tuesday afternoon. 

"Bitcoin has seen short term momentum improve within its long term uptrend and has a good amount of room to resistance, which is close to about $14,000," Fairlead Strategies founder Katie Stockton said in a note last week.

If bitcoin is able to decisively trade above its $14,000 resistance level, all eyes will be on its next, and last, remaining resistance level: $20,000.

A break above that level would set the cryptocurrency up for new all-time highs. Year-to-date, bitcoin is up 87%, yet is still 32% below its 2017 high of $19,783, according to data from Coindesk.

Indian bank United Multistate Credit Co. Operative Society is planning to expand its banking services to cryptocurrencies and cryptocurrency products.In collaboration with the crypto banking service provider Cashaa, United has established a joint venture dubbed UNICAS that aims to provide both online crypto banking services and walk-in services across its 34 physical branches in northern India.

This move by United and Cashaa comes amid India’s uncertain crypto regulations. While the Supreme Court of India took down the crypto banking ban put in place by the Reserve Bank of India in March, most banks are still skeptical of providing services to crypto companies and individuals dealing in digital currencies.

UNICAS will allow United account holders to integrate cryptocurrency wallets directly with their accounts. Customers will also be able to directly buy Bitcoin (BTC), Ether (ETH), Ripple (XRP) and Cashaa (CAS) by paying either in cash or directly from their account.

When UNICAS launches, United will also allow its customers to take out loans against cryptocurrencies.Cryptocurrencies have seen significant adoption in India since the lockdown started in March. Many Indian cryptocurrency exchanges reported a spike in their crypto trading volume to the tune of 200% to 400%.
Kumar Gaurav, the chief executive of Cashaa, said that the increased interest in cryptocurrencies was a major reason for them to integrate cryptos into the legacy banking system.

He said that UNICAS will help disseminate reliable information about cryptocurrencies to the mainstream Indian population and help further the adoption of cryptos in India.

He also said that the addition of cryptocurrency services to a traditional bank will help India adopt a more digitized payment system.

PayPal (NASDAQ:PYPL) will soon allow you to buy and sell cryptocurrency on its app. The payments company will expand the service to Venmo, and eventually, allow users to use their crypto to make purchases at the over 26 million merchants that accept PayPal.

The announcement was viewed as a positive for both PayPal and bitcoin investors.Here's why there's a lot to like about PayPal's embrace of cryptocurrency.




IMAGE SOURCE: PAYPAL.

Increased engagement

The ability to buy and sell bitcoin and other cryptocurrencies on PayPal's platform should lead to increased engagement with its services. CEO Dan Schulman wants PayPal to have daily utility, and that starts with getting users to think about it more often.Rival Square (NYSE:SQ) has successfully increased engagement by adding additional features like bitcoin trading to its Cash App.

 Management notes that users who take advantage of features like bitcoin trading are also sending more money via its platform, spending more on their Cash Card, and using other monetizable features in Cash App.

PayPal eventually aims to go a step beyond where Square is now by giving users the ability to pay for any purchases using their cryptocurrency holdings.

Behind the scenes, the company will actually liquidate the cryptocurrency and send fiat currency to the merchants, but users will be able to store their funds as cryptocurrency up until they want to spend it. The option for such seamless transactions could lead to cryptocurrency fans making more frequent use of PayPal.

The fintech company isn't taking a commission nor looking to earn anything off the spread from those who trade bitcoin on its platform. It can facilitate cryptocurrency trading for free and make its money on the uplift in transactions on its payments network.

Diving deeper into cryptocurrency

Giving people the ability to buy, sell, and use cryptocurrency for payments through PayPal looks like just the first step here. "The shift to digital forms of currencies is inevitable," Schulman said in the press release announcing the new features.

The CEO said he wants PayPal to "meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.

"PayPal has been picking up the pace with its introduction of new products and features recently, and it's willing to spend to further its growth. During the company's second-quarter earnings call, CFO John Rainey said it'll spend an additional $300 million in the second half of 2020 "to advance our key priorities and accelerate our growth initiatives.

"To that end, PayPal is also exploring the acquisition of cryptocurrency companies. It's reportedly interested in bitcoin custodian BitGo, according to Bloomberg. It's currently partnering with BitGo's competitor Paxos Trust, to enable the purchase and sale of cryptocurrencies.

PayPal may also explore developing its own
cryptocurrency. Facebook (NASDAQ:FB) tried to launch a digital currency last year, Libra, in order to facilitate commerce on its social networks.

PayPal initially backed the project along with a couple dozen other companies, but it backed away after Facebook started facing regulatory issues with Libra, halting its progress.

A cryptocurrency may make more sense for PayPal. Cryptocurrencies can speed up transactions, particularly cross-border transactions, while reducing their cost.

A PayPal cryptocurrency would also reduce its dependence on traditional banking and payments partners.

That could enable PayPal to lower its fees and increase its profit margins.

Considering the company facilitates hundreds of billions of dollars in payments every year, even a small margin improvement on them would have a massive impact on its bottom line.

There's a lot of potential for combining the utility of cryptocurrency with PayPal's expansive network of consumers and merchants.

With its strong free cash flow, PayPal has the funds to acquire companies in the space and spend money on developing new technology, so it could move fast if it sees good results with the features it just announced.

This year’s protests in Portland and Bend, Ore., have many wondering how the Beaver State’s increasingly radicalized left will cope if President Trump is re-elected.

After the 2016 election, a group of Oregonians submitted a petition for a ballot measure asking voters to consider secession.

It went nowhere, but this year could be different. A 2017 Zogby poll concluded that a plurality of Americans (39%) believe states have a right to secede, so perhaps the idea isn’t far-fetched.

Rioters in Portland laid siege to the city’s federal courthouse for more than two months this summer. Mayor Ted Wheeler, who failed to control the chaos, is facing a serious re-election challenge from Sarah Iannarone, an avowed antifa supporter, who has outraised him and could win the nonpartisan contest.


But Portland isn’t the only place in Oregon that seems to be drifting further from what passes for normal in the U.S. Consider the hysterical reaction of locals and election officials in Bend when Immigration and Customs Enforcement agents attempted to take two illegal aliens into custody in August.

Hundreds of protesters blocked ICE buses, and a 12-hour standoff ensued before agents could remove the men.

Bend’s political establishment defended the protesters. “I’ve never been so disgusted by my government and so proud of my community,” tweeted John Hummel, Deschutes County’s district attorney. Bend’s Mayor Sally Russell added:

“In no way do I support ICE. Nor can our Bend Police Force, because Oregon is a sanctuary state and it is illegal. . . . ICE is a Federal agency and frustratingly we have no power over the Executive Branch of our country.”

ICE hasn’t detailed the charges against Marco Zeferino and Josue Cruz-Sanchez, whose detentions triggered the standoff, other than to say they have “violent criminal records” and re-entered the U.S. unlawfully after prior apprehensions.

But both men have arrest records reported by local media. Mr. Cruz-Sanchez pleaded guilty in 2018 to fourth-degree assault (domestic violence) and felony coercion for injuring and threatening his partner.

In February 2019 he was arrested for burglary and a parole violation and pleaded guilty to first-degree criminal trespassing. Three months later, he pleaded not guilty to fourth-degree assault charges related to a separate incident.

Mr. Rios was arrested for attempting to assault a woman in 2019. The charge was reduced to harassment and he pleaded guilty.That both men have a history of attacking women doesn’t seem to trouble their left-wing supporters.

The men have received free legal assistance from a Portland-based nonprofit called the Innovation Law Lab, which says on its website that it works “on-the-ground to defeat the Vast Deportation Machine.”During the siege in Portland and the standoff in Bend, voices in the media began referring to the federal agents sent to enforce the law as “storm troopers.

” In many precincts of the left, the police are now viewed as criminals while actual criminals are revered, getting bonus intersectionality points if they’re in the country illegally.

Other U.S. states are subject to this dynamic, but Oregon’s open flirtation with secession makes it notable.

Several right-wing groups are gathering signatures from residents of 15 Eastern Oregon counties that have had enough of this coastal insanity.

They want either to become part of Idaho or form a new state with rural counties of Northern California. Well before Portland became the fashionable place for woke young retirees, Oregon was a reliably red state.

Richard Nixon carried it in 1960, 1968 and 1972. Gerald Ford held it in 1976, and Ronald Reagan won by large margins in 1980 and 1984. In 1992 third-party candidate Ross Perot won 24% of the vote, almost certainly stealing Oregon for Democrat Bill Clinton.

Now the heavily pierced and tattooed masses in Portland, Eugene and Bend have teamed up with recently arrived hippies from California and metro Seattle to turn the state deep blue west of the Cascades.

 Oregon hasn’t elected a Republican governor since 1982 or sent a GOP senator to Washington since 2002. Urban progressives dominate state government.

I lived in Oregon between 2014 and 2019 and love it dearly despite its dysfunction.

It broke my heart to see this summer’s devastating wildfires tear through the state. I hope and expect that Oregon will remain in the Union, but I worry that Mr. Trump’s re-election could lead to a mass mental-health emergency. If Oregon’s blue cities try to secede, the gun-loving inland counties aren’t likely to go with them.

Things could get ugly.Imagine—if Mr. Trump wins, the bluest part of Oregon could forgo becoming a new state and go straight to establishing an independent country, where far-out progressive policies can be road-tested.

 It could fulfill the wishes of the protesters who occupied a Portland ICE building and establish open borders, though Trump supporters would be able to visit only on special visas.

Capital punishment could be outlawed and prisons emptied, except for those established to be anti-woke terrorists.

An independent Oregon could use state funds for cannabis production. Schools would remain virtual for as long as the teachers unions desire, but in-person re-education camps would be established for Republican dissidents, who would be indoctrinated in critical race theory and forced to pledge allegiance to the Green New Deal and Medicare for All.

Guns and police could be banned. Crime victims could receive free draft kombucha and autographed copies of Alexandria Ocasio-Cortez’s memoir.An Oregon untethered from the bourgeois U.S. could become a laboratory for the left’s wildest dreams.

Perhaps it would become the Pacific Northwest’s version of Copenhagen, but I doubt it. More likely it would come to resemble Venezuela without the sunshine, oil and arepas.

Mr. Seminara is a former diplomat and author of “Footsteps of Federer: A Fan’s Pilgrimage Across 7 Swiss Cantons in 10 Acts,” forthcoming in March.

The previous week has been tremendous for Bitcoin (BTC) investors as price broke the crucial barrier of $12,000, culminating in a surge from $11,300 to $13,300, a rally of $2,000 within a week.

A new yearly high was printed, while the dollar has been showing weakness as well. Next to that, multiple listed companies came along with statements regarding allocations of Bitcoin rather than the U.S. Dollar.All these arguments line up for a continuation of the bull market, but which levels should be watched? Let's take a closer look at the charts. 

The $12,000 barrier was crucial for Bitcoin

BTC/USD 1-week chart. Source: TradingViewAs Bitcoin’s weekly chart shows, the $11,600-12,000 area was a crucial area to break for any bullish continuation. This resistance area has been persistent since the start of the bear market at the beginning of 2018.

For over thirty months, the price of Bitcoin couldn’t break through this resistance zone, until the previous week.The beginning of a bull market is often flagged by beautiful support/resistance tests for continuation, which is also seen at the $10,000 level. After this support/resistance test, the upward run continued.




BTC/USD 3-day chart. Source: TradingViewThe $10,000 level got a retest and held, which marked a new support zone. Since then, Bitcoin’s price has continued to run upward, which led to the breakout above the $12,000 barrier.

The $11,600 resistance must flip to support

BTC/USD 3-day chart. Source: TradingViewAs the $11,600-12,000 broke upward, some interesting levels can now be determined for traders to watch in the upcoming weeks.

Often, buying after such a big rally isn’t the best strategy since a retest of lower levels is likely. As mentioned, the confirmation of a support/resistance flip at the $10,000 level warranted upward momentum. A similar case is likely here.

The crucial barrier of $11,600-12,000 is likely to see a support level test before the market can continue rallying.






The resistances are found at $13,600-14,000 and $16,500-17,000. However, the latter is unlikely to be hit in the coming months as range-bound movements appear to be more likely.Therefore, traders should pay attention to the $13,600-14,000 area and the $11,600-12,000 as both could become crucial pivots in the upcoming weeks.

Total crypto market cap enters key resistance zone

Total market capitalization cryptocurrency 3-day chart. Source: TradingViewThe total market capitalization for all cryptocurrencies chart is showing a clear resistance zone between $395-415 billion. It’s unlikely to have a breakout in one go, but that’s heavily dependent on the movement of Bitcoin.

Therefore, a retest of the $330-340 billion for support would be very likely and would set up a healthy construction for the start of a new bull market.If the total market capitalization breaks through $395-415 billion, the next resistance zone is found between $510-525 billion.

One possible scenario for Bitcoin price

BTC/USDT 3-day chart. Source: TradingViewAs discussed previously in this article, there’s a very likely case that Bitcoin’s price will have a correction toward the $11,600-12,000 area for some technical level tests.

Therefore, a range-bound technical structure can be determined. The resistance zone is located between $13,500-14,000, and the support zone is between $11,600-12,000.Such a range-bound construction is very healthy for starting a new cycle as it’s constantly accumulating on a higher level. 

Breaking out of this sideways range after a few months may see the next big move, which will likely bring the price of Bitcoin towards $17,000 and possibly even a new all-time high.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

• Billionaire Alibaba founder yesterday said that digital currencies could help create a new global financial system.
• He also attacked global banking regulations.
• But it isn’t clear what exactly the entrepreneur meant by “digital currencies.”

Chinese billionaire Jack Ma yesterday said that digital currencies could play a role in a new global financial system—and attacked worldwide regulation. The founder of China’s biggest e-commerce company, Alibaba, made the comments during a speech at the Bund Summit in Shanghai, Bloomberg reported today. 

“Digital currency could create value and we should think about how to establish a new type of financial system through digital currency,” Ma is reported to have said. But it isn’t clear what the entrepreneur—who is worth $61 billion, according to Bloomberg estimates—meant by “digital currencies.”

As one would expect, the crypto community were quick to speculate on what Ma was talking about regarding digital currencies. Binance CEO Changpeng “CZ” Zhao wrote on Twitter that it was an “amazing speech” where Ma “talked a lot about cryptocurrency and the future.

”But Ethereum co-founder Vitalik Buterin was quick to ask Zhao what exactly Ma meant by “digital currencies.

” Zhao responded that “the meaning is up for interpretation.” Cryptocurrencies are banned in China—but Bitcoin and other digital assets are still traded in the region. Chinese Bitcoin miners also mine the bulk of the world’s new Bitcoin.

It is possible Ma was talking about a Central Bank Digital Currency (CBDC), such as China’s digital yuan, in his speech; countries around the world are racing to develop a centralized, digital currency. 

But China is winning the race with its digital yuan—which is already in a testing stage. Ma also said during the speech that global regulations, particularly the Basel Accords (an international banking supervision framework introduced in 2010), were out-dated and “like an old people’s club.

” He added that worldwide regulations were stifling China’s development and are “not thinking about young people’s or developing countries’ opportunities.

” Ant Financial, an affiliate company of Alibaba, is about to launch an IPO valued at $30 billion. It is thought to be the world’s largest.