Crypto

Facebook‘s ‘cryptocurrency’ Libra may be in even deeper trouble than we thought if a recent report is anything to go by.

According to the Financial Times, it seems that some of Facebook‘s early backers have been spooked by increasing regulatory scrutiny.

It’s being reported that at least three of Facebook‘s supporters have privately discussed ways in which to distance themselves from the project.

When it was first announced, the Libra Association – the independent bodyresponsible for overseeing the ‘cryptocurrency’ – boasted 28 members, which included several heavyweights from the financial sector (Visa, Mastercard), and technology industry (Spotify, Uber), alongside Calibra (a Facebook subsidiary).

At the time, news surfaced that each of the members had made a non-binding pledge to invest at least $10 million into the project, which Facebook hopes could disrupt the global payments arena and boost financial inclusivity.Perhaps unsurprisingly, Facebook‘s proposition unnerved regulators across the globe.

It even reportedly prompted an anti-trust investigation by EUofficials.Now, the FT it’s spoken to two of Libra‘s founding members, who say they are concerned about the intensifying regulatory scrutiny and are considering walking away altogether.

Additionally, another supporter says they are concerned about publicly supporting Facebook‘s digital currency as this may attract unwanted attention from regulators tasked with overseeing their own business.

“I think it’s going to be difficult for partners who want to be seen as in compliance [with their own regulators] to be out there supporting [Libra]” one of the partners told the FT.

As a result, Facebook is said to be growing reportedly tired of the lack of public support from the ‘cryptocurrency’ founding partners.

“Facebook is tired of being the only people putting their neck out,” one of Libra‘s supporters added.Just to be clear, the FT says that founding partners are widely supportive of Libra as a concept and its potential to foster financial inclusion.

But, two of the companies have apparently discussed what the “right next steps” should be.

“Some of those conversations [about regulation] should have taken place before the launch, to understand how regulators would think about this, so there wasn’t so much pushback,” one partner said.Indeed, Facebook seems to be working backward.

The tech giant initially said it was looking to push Libra live in 2020, but the way things are going, this seems highly unlikely.

But, who knows, maybe I’ll stand corrected.

Digital asset exchange Binance is launching a cryptocurrency lending platform later this month.In a blog post published earlier today, the exchange announced what it’s calling “Binance Lending.” A platform which Binance CEO, Chanpeng Zhao, touted would let users “earn crypto in their sleep.

”Binance is positioning the platform as a “value-add” service for exchange users that hold idle digital assets. In other words, if you have some tokens or coins on Binance that you’re just letting sit there, you could make some money by offering them for use in Binance‘s lending platform.

Users that lend out their dormant coins will earn interest over a two-week period. In the case of Binance‘s own coin, BNB, users could earn an annualized interest rate of up to 15 percent.

According to the announcement, the first phase of lending will be a 14-day fixed term of BNB, USDT, and ETC, starting on August 28, 2019 at 0600UTC.Binance is capping the amount of coins that can be allocated to the lending scheme and is restricting it by lot sizes.

Lending slots are being offered on a first-come-first-served basis. You can track the allocation of coins here.

I have a feeling there might be some dissatisfied users if they aren’t able to subscribe and lend their coins though.If it isn’t making sense Binance also gave a break down of the interest a user can be expected to earn if they submit their coins to the scheme.

Let’s pretend you buy 10 lots of BNB Lending, each lot includes 10 BNB so this is a total lend of 100 BNB. Over the two-week period you will earn 0.057534 BNB per lot, so for 10 lots that’s 0.57534 BNB.In other words, loan $2,635 and at maturity earn $15.

I mean, thinking of it that way, is it even worth the hassle?To some people, like margin traders, maybe. To most people, probably not.Published August 26, 2019 — 15:02 UTC

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Facebook’s ‘cryptocurrency’ Libra may be in more trouble than we thought

 

LEARN TO TRADE

The United States Securities and Exchange Commission (SEC) has settled a fine with a Russian firm that was pushing initial coin offerings (ICOs) without disclosing the fact that it had accepted payment to do so.

Late yesterday, the SEC announced it has reached a $268,998 settlement with ICO Rating. According to the SEC, ICO Rating promoted cryptocurrency projects between December 2017 and July 2018 – the infamous boom period – that should have been classified as securities.

As a result, ICO Rating should have disclosed the fact that it accepted payment to promote some coins and tokens.

ICO Rating positions itself as “a rating agency that issues independent analytical research.

” Perhaps ironically now in hindsight, the website also says its mission is “to help the market achieve the necessary standards of quality, transparency and reliability.

”It seems the company itself can’t even meet basic standards of transparency with this latest news.

ICO Rating has neither admitted nor denied the SEC‘s claims. However, it has agreed cease and desist from committing any future violations of the same nature. It also agreed to repay its ill-gotten gains and prejudgment interest totaling $106,998, and a civil penalty of $162,000.

Indeed, this news is hardly surprising. An investigation by Breaker last year, found that half of the crypto-media outlets they contacted would accept money to publish information about ICOs as if it were independent editorial content.

The World Bank has issued a second round of its landmark blockchain bonds.

The international financial institution raised another $50 million AUD ($33.8 million U.S.) by selling the “blockchain-operated debt instrument” (bond-i), according to Commonwealth Bank of Australia (CommBank), which managed the sale jointly with RBC Capital Markets and TD Securities.Both new and existing investors participated, CommBank said.

All told, the World Bank has issued $160 million AUD ($108 million U.S.) of these bonds, which run on a private version of the ethereum blockchain. It is “the first bond created, allocated, transferred and managed through its life-cycle using distributed ledger technology,” according to CommBank.

“We are happy to see the continued, strong support and collaboration from investors and partners,” Andrea Dore, the World Bank’s head of funding, said in a press release.

“The World Bank’s innovation and experience in the capital markets is key to working with our member countries to increase digitization to boost productivity in their economies and accelerate progress towards the Sustainable Development Goals.

”The blockchain platform was built and developed by CommBank’s Blockchain Centre of Excellence.

“CBA now has tangible evidence from our first bond offering using blockchain technology and subsequent bond management, secondary trading and tap issue via the same platform, that blockchain technology can deliver a new level of efficiency, transparency and risk management capability versus the existing market infrastructure,” Sophie Gilder, head of blockhain and AI at CommBank, said in last week’s release, adding:

“Next we intend to deliver additional functionality to deliver greater efficiencies in settlement, custody and regulatory compliance.”

A year ago, the World Bank announced the first $110 million AUD (roughly $81 million U.S. at the time) issuance of bond-i.In May of this year, the World Bank and CommBank began to record secondary market bond trading using blockchain tech.

World Bank image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

• IRS 6173 letter titled “Reporting Virtual Currency Transactions must be responded to by U.S. cryptocurrency holders.
• The tax authority did send out some 10,000 letters, expecting people that may have failed to report the crypto income. 

 Back in July, the United States Internal Revenue Service (IRS) distributed around 10,000 letters to holders of cryptocurrencies regarding their portfolios. 

The IRS wants taxpayers with digital currency transactions that may have potentially failed to report the income and pay the resulting tax from digital currency transactions or did not report their transactions properly.  

In terms of the people that have already received letter 6173, which is titled “Reporting Virtual Currency Transactions”, now have just under a week to reply to the IRS. 

Recipients are required to respond to this letter within 30 days of the date listed on the letter and requires all crypto transactions between the years of 2013 to 2017 be reported. Reports must include transactions between wallets and exchanges.

In the last decade, blockchain and distributed ledger technology has had an immense impact on a multitude of industries, with 84% of organizations experimenting with the technology, with more than half (52%) of blockchain projects in the research and development phase, according to the PwC Global Blockchain Survey. 

The industries making important strides forward with blockchain include financial services, manufacturing, energy and utilities, health care, as well as government sectors, but the potential of the technology is limitless.

Ultimately, any business that is looking to simplify the processing method of large volumes of transactions while ensuring the verifiability of these transactions — stands to benefit from the use of blockchain technology. 

So, what does the next decade hold for blockchain, and what barriers are there to overcome in order to see true mainstream adoption?

Cryptocurrencies: The next-generation portfolio diversifier

Blockchain technology has often been mistakenly associated with Bitcoin’s volatility. While blockchain is indeed the underlying technology powering Bitcoin and other cryptocurrencies, it has little to do with its peaks and troughs. 

Bitcoin and cryptocurrency price volatility is primarily driven by investors’ perceptions of the security of their holdings along with the prospects for Bitcoin and other cryptocurrencies to become a reliable portfolio diversifier as institutional adoption increases.

In the last year alone, gold has risen by 10%, while Bitcoin has soared by over 180% against the United States dollar.

The U.S. Federal Reserve’s recent slashing of interest rates for the first time since the financial crisis signals a return to monetary and fiscal stimulus in the form of quantitative easing, which could negatively impact confidence in fiat currencies.

If this ends up being the case, we could soon witness capital flight that could result in a decline in the performance of the U.S. dollar, should there be a significant loss of trust in central banks.




One-year crypto performance. Source: coin360.comCryptocurrencies, on the other hand, have proven to be one of the top-performing assets since the start of the year, outperforming other, more traditional asset classes, such as stocks, commodities and real estate.

While it might not be prudent to put all of one’s eggs in a single basket, the case for including digital assets as a long-term portfolio diversifier is stronger than ever, but it remains to be seen how cryptocurrencies will perform during times of extreme macroeconomic or market stress.

Facebook see, Google do? The business case for blockchain

When Facebook says “Jump!” users ask “How high?” However, it is not enough for companies to hop onto the blockchain bandwagon without further investigation into the viability of blockchain and whether it is the right solution for a business. 

The applicability of blockchain very much depends on whether a business fulfills a number of criteria, including whether multiple parties share and update data; if the business has a customer database, whereby there is a verification requirement; third-party intermediaries adding complexity that blockchain could potentially remove; whether interactions are time-sensitive; and if transactions interact.



Blockchain stands to see far greater adoption when organizations' and institutions' approaches and application methods of decentralized ledger technology become more targeted, as opposed to adopting a one-size-fits-all framework. This allows companies to mitigate the risks associated with integrating blockchain into their businesses unnecessarily.

New kid on the block(chain): The Internet of Things (IoT)

The increasing spread of internet connectivity to things in our everyday lives — such as smart thermostat Nest, Philips Hue smart bulbs, wearables like Garmin smart watches — means that there is a vast amount of data being collected that could benefit from being stored in a secure and verifiable manner.

This is where blockchain comes into play. With the overall number of connected devices projected to grow to 29 billion by 2022 (18 billion of which will be IoT-related), there is an increasingly urgent need to safeguard the sheer volume of data that will be collected by them.

Blockchain eliminates single-point failure with its distributed network of computers, as well as potential inefficiencies as a result of overburdened centralized systems. Blockchain’s additional layer of security also means that personal data — including the data collected by implantable cardiac devices (!) — is far less vulnerable to being hacked.

The future of fundraising: From ICOs to STOs to IEOs

July 31 marks the sixth anniversary of the introduction of the first ever initial coin offering (ICO) in the blockchain space, with J.R. Willett launching Mastercoin (now Omni). As the industry matures, the nature of fundraising in the space has changed.

We’ve witnessed a shift away from ICOs, with security token offerings (STOs) launching in public markets and a further progression toward initial exchange offerings (IEOs) in 2019.

While ICOs require reduced upfront capital and have lower barriers of entry for investors, they were plagued by fraudulent token sales and scams, which ultimately scared investors off.

This was followed by a significant shift toward regulatory compliance, which is essential if these fundraising practices — and blockchain in general — is to see widespread adoption.

Unlike ICOs, security tokens issued during an STO are supported by an underlying asset that reflects a monetary value, which offers investors greater transparency.

Oversight by various regulatory bodies — such as the U.S. Securities and Exchange Commission and Swiss Financial Market Supervisory Authority — can provide some measure of protection.

On the flip side, these same regulatory guidelines mean that participation in STOs is limited to institutional investors.

So, what might the future of fundraising look like in the blockchain space moving forward?IEOs — i.e., token sales conducted directly via an exchange, with issuers paying a listing fee — are the newest form of fundraising.

While they are slightly less regulated than STOs, Know You Customer and other checks are mandatory, with exchanges ensuring due diligence before a token is listed.

Also, as all transactions take place via an exchange, this method of fundraising is seen as being more secure compared with ICOs, whose project websites may lack the necessary security measures.

As blockchain technology transitions from being reserved for the high-tech elite to a technology that can be applied to the masses, we will undoubtedly witness a shift in perception on a global scale.

As the market matures and the technology follows suit, we will see real-world applications across industries, redefining the way we do business. 

Alexandra Tinsman is president of the NEM.io Foundation, which aims to introduce, educate and promote the use of the NEM blockchain technology platform on an international scale to all industries and institutions.

The focus of the NEM.io Foundation in 2019 is to support the commercialization and launch of Catapult, the next iteration of the core NEM engine.

With more than 20 years’ consumer and B2B product marketing experience, Alexandra has worked with some of the world’s biggest brands in software, hi-tech gaming, entertainment and online services, including Microsoft Xbox, Xbox LIVE, Bing, Windows Phone, Skype and MSN, in which she developed, executed and managed global marketing campaigns and go-to-market strategies. 

She also worked on some of the world’s first tradable digital assets used in Pokémon Online, Magic: The Gathering Online, League of Legends and the Xbox Digital Marketplace. 

The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.