Daily, May 11, ’18

SEC, BTC, Telegram, Nvidia, China

  • Hester Peirce, the US’s SEC Commissioner talked about the importance of understanding crypto before putting forward any regulations.
  • New York Stock Exchange is going to launch a new trading desk for Bitcoin trade allowing large investors to buy and hold Bitcoin.
  • Telegram is testing a new service called Telegram Passport which will be used to keep personal details, copies of IDs, banking statements and other documents to identify users on Telegram Open Network.
  • Nvidia reveals its $289 million revenue from crypto miners in the first quarter of 2018.
  • China wants to release blockchain standard by the end of 2019.

Related news

Gov’t Shutdown Freezes SEC Activity, But Bitcoin ETF Date Unaffected

The US Securities and Exchange Commission (SEC) has frozen all pending administrative proceedings due to the government shutdown. According to a legal expert, however, the Commission is not allowed, by law, to delay the decision on VanEck/SolidX Bitcoin ETF past its current deadline.  No More Delays Despite Government Shutdown The SEC has issued an order on January 16th, putting all pending administrative proceedings on hold because it has “experienced a lapse in appropriations.” According to the documents, all proceedings which have to face a hearing before the Commission or an administrative law judge, are currently frozen. Jake Chervinsky Legal expert Jake Chervinsky said that even though the SEC has been shut down before that order, administrative proceedings were still in motion, hence deadlines were unaffected. Now that the SEC has stayed all administrative proceedings, interested parties may file a motion to dismiss the stay if their proceedings are an exception of the activities stated in the order. Bitcoinist reported that the SEC needs to come up with a decision on the approval of the CBOE-backed VanEck/SolidX Bitcoin ETF by February 27, 2019. Irrespective of the newest order, the SEC isn’t allowed to further delay its decision, the legal expert holds: This does not change anything about the ETF deadline, which is imposed by the statute and cannot be delayed further. This does not change anything about the ETF deadline, which is imposed by statute and cannot be delayed further. I stand by the following:https://t.co/1EpAv1B0Nm — Jake Chervinsky (@jchervinsky) January 17, 2019 The commission has already delayed its decision multiple times, with the last one happening in December. SEC’s shutdown saw mounting rumors that the Bitcoin ETF might get automatically approved if the commission misses the deadline. While this is true in theory, Chervinsky recently dismissed the possibility, saying that “in reality, it would never happen.” It’s true that a proposed rule change is auto-approved if the SEC doesn’t make a decision by the deadline, but in reality it would never happen. The SEC has enough staff to put out a decision, even if it’s a one-pager saying ‘denied for reasons to be explained later. Chervinsky, who’s also a frequent commentator on cryptocurrency-related matters, has previously said that the chances of a Bitcoin ETF approval are down to 10%. What do you think about the chances of a Bitcoin ETF approval? Don’t hesitate to let us know in the comments below! Images courtesy of Shutterstock, Twitter@jchervinsky   The post Gov’t Shutdown Freezes SEC Activity, But Bitcoin ETF Date Unaffected appeared first on Bitcoinist.com.

SEC targets Decentralized Exchanges and ICO Projects

The U.S. Securities and Exchange Commission (SEC) continues its drive to “clean up” the cryptocurrency sector and has entered into settlements with EtherDelta founder Zachary Coburn as well as the former ICO projects Airtoken and Paragon. The subsequent rulings have cast doubt on the legitimacy of similar ICO projects and on the future of decentralized exchanges (DEXs). Unregistered Securities Exchange The SEC has charged Zachary Coburn, the founder of the digital token trading platform EtherDelta, with operating an unregistered securities exchange. EtherDelta allowed users to trade ERC-20 tokens in a peer to peer (P2P) fashion, and the Commission has stated that the exchange provided a marketplace for interested parties to trade Ethereum tokens that the SEC deemed to be “digital asset securities.” Crucially, it used an order book, an order display website and a smart contract built on Ethereum, with the agency announcing:   “EtherDelta’s smart contract was coded to validate the order messages, confirm the terms and conditions of orders, execute paired orders, and direct the distributed ledger to be updated to reflect a trade.” The platform did not register as an exchange or file for an exemption and according to the SEC: “Almost all of the orders placed through EtherDelta’s platform were traded after the Commission issued its 2017 DAO Report, which concluded that certain digital assets, such as DAO tokens, were securities and that platforms that offered trading of these digital asset securities would be subject to the SEC’s requirement that exchanges register or operate pursuant to an exemption.” Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement also said that “EtherDelta had both the user interface and underlying functionality of an online national securities exchange and was required to register with the SEC or qualify for an exemption.” EtherDelta users conducted more than 3.6 million trades over an 18-month period and this led to Coburn cooperating with the regulator and settling the charges. Although he did not admit to or deny the charges, he paid $300,000 in disgorgement, $13,000 in pre-judgement interest and a $75,000 penalty. It was also noted that his cooperation with the regulator resulted in a lower penalty than may possibly have been administered. The case highlights that even if a decentralized exchange or DEX can’t be easily shut down, it can still be pursued by the authorities and held liable for its activities. Coburn agreed to pay a total of $388,000 in penalties, despite leaving EtherDelta in late 2017, and the trades of the ERC-20 tokens on the platform cited by SEC took place between July 12, 2016 and December 17, 2017. ICOs Issuing Securities The SEC has also concluded that two Initial Coin Offering (ICO) projects produced tokens that were actually unregistered securities and has ordered the pair to refund their ICO participants. As a result of the decision, AirToken (AIR) and Paragon (PRG) have promised to register their tokens as securities, return investors’ money and to pay $250,000 in penalties.  CarrierEQ, the company behind both Airfox and Airtoken, raised $15m in its ICO. The Boston-based start-up planned to build a peer-to-peer (P2P) system targeted at the unbanked while Paragon raised £12m and tried to build a blockchain ecosystem for the cannabis industry. Interestingly both projects have suffered heavy losses over the year and may struggle to both refund investors and pay SEC fines, although much depends on how the teams chose to manage their ETH hoardings during the ongoing downturn.   The rulings place more scrutiny on so called “utility tokens” with Stephanie Avakian stating:  “We have made it clear that companies that issue securities through ICOs are required to comply with existing statutes and rules governing the registration of securities. These cases tell those who are considering taking similar actions that we continue to be on the lookout for violations of the federal securities laws with respect to digital asset.” Similar to EtherDelta, the US regulator found that both CarrierEQ and Paragon Coin held their ICOs last year after the SEC had released its DAO Report of Investigation, which clarified that ICO-based tokens might be viewed as securities. Neither Paragon nor Airfox registered their ICOs nor sought to obtain an exemption to registration requirements. As a result, the two firms are set to pay $250,000 in penalties and return funds to harmed investors. In addition, they will also register their tokens as securities under the Securities Exchange Act of 1934, and file regular reports with the SEC for no less than a year. Steven Peikin, Co-Director of the SEC’s Enforcement Division stated: “By providing investors who purchased securities in these ICOs with the opportunity to be reimbursed and having the issuers register their tokens with the SEC, these orders provide a model for companies that have issued tokens in ICOs and seek to comply with the federal securities laws.” The Year Ahead The decisions may lead to uncertain futures for some ICO projects and DEXs as the SEC continues to regulate the cryptocurrency sector. EtherDelta was the leading ERC-20 based DEX until its sale by Coburn and the current leading Ethereum DEX, Idex has already moved to block New York state IP addresses in order keep in line with regulations. At the same time, U.S.-based DEX AirSwap has partnered with licensed securities dealers and avoids order books, order matching, and transaction fees altogether. Although the SEC still hasn’t clarified which tokens traded on EtherDelta are considered to be securities, the message is clear that DEX developers and owners are who regulators consider liable for the decentralized technologies. This will lead to a number of US based DEXs choosing to sharpen up their activities over the coming year or fall foul of the US securities regulator. The ongoing SEC enforcement could also result in cryptocurrency companies and DEX operators moving their operations away from the United States. Hubs in Malta, Singapore, and England are governed by laws that are friendlier toward ICOs and tokens while the SEC is just getting started with its sweep of the industry.

Bitmain’s Chip Supplier Saw a ‘Big Drop’ in Crypto Mining Sales Last Year

Taiwan Semiconductor Manufacturing Company Limited, who provides chips to Bitcoin mining giant Bitmain, says that 2018 saw a downturn in demand for crypto mining chips. In a recent conference call with investors, TSMC CEO C. C. Wei said that cryptocurrency had previously accounted for “a lot” of the company’s orders, but that it had gone The post Bitmain’s Chip Supplier Saw a ‘Big Drop’ in Crypto Mining Sales Last Year appeared first on CCN

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