United States cryptocurrency exchange Kraken is offering equity to users in a fundraiser that raised over $6 million in its first day, statistics confirmed on May 21. Kraken, which is one of the world’s oldest exchanges, is using Cayman Islands-based platform BnkToTheFuture to offer equity to vetted investors. These, it said in an accompanying marketing email seen by Cointelegraph, can be any Kraken user, subject to a minimum purchase of $1000. At press time, Kraken had raised just over €6.04 million ($6.76 million) from almost 300 investors, taking it to two-thirds of its total investment goal of €9.13 million ($10.18 million). The appetite for Kraken’s shares reflects the market optimism currently pervasive within cryptocurrency as bitcoin (BTC) continues its 2019 bull run. On the BnkToTheFuture listing, Kraken described itself as having over four million clients, while 2018 volumes topped $85 billion. “We are always looking for ways to democratize access to our equity, allowing more of our valued clients to become valued investors,” officials added in a Twitter post on May 20. The post noted: “To that end, we partnered with @BankToTheFuture to create an opportunity to invest in Kraken.” Kraken has sought to preempt the next wave of interest in crypto exchanges as competitor platforms — notably embattled Bitfinex — also seek to accrue funds. Last week, the exchange argued against proposed crypto regulations in Canada, while CEO Jesse Powell has also been a vocal opponent of U.S. regulatory moves. The company has also sought to expand its presence internationally, acquiring United Kingdom futures provider Crypto Facilities earlier this year in a move which produced significantly heightened interest in its products. Interested parties will be able to consider investing in the equity deal through June 20.
A 33-year-old Australian government employee has been charged after he was caught mining cryptocurrency at work. In a media release Tuesday, the Australian Federal Police (AFP) alleged that the IT contractor from the Sydney suburb of Killara had modified government computer systems to mine cryptocurrency worth over AU$9,000 (US$6,184) for his own gain. The unnamed man will attend a local court today over two charges – unauthorized modification of data to cause impairment and unauthorized modification of restricted data – under the country’s Criminal Code Act, according to the AFP. Last year, AFP police officers seized a laptop, phone, employee ID cards and data files in a raid conducted at the contractor’s home. The charges carry a maximum penalty of 10 years imprisonment and two years imprisonment, respectively. Chris Goldsmid, AFP acting commander and manager of cybercrime operations, described the alleged crime as “very serious,” explaining: “Australian taxpayers put their trust in public officials to perform vital roles for our community with the utmost integrity. Any alleged criminal conduct which betrays this trust for personal gain will be investigated and prosecuted.” The news marks just the latest instance of employees who have got in hot water for mining cryptos at work. To cite just a few, in 2017, a former employee of the Federal Reserve Board of Directors was also fined $5,000 and put on probation after being caught mining bitcoins on a server owned by the U.S. central bank. Nuclear scientists at a Russian weapons research facility were charged for the same crime last February. And, last November, two school principals in China were caught stealing power from their institution to mine the cryptocurrency ether. Australian police image via Shutterstock
NYSE Arca has filed a proposed rule change with the United States Securities and Exchange Commission (SEC) for an application to list shares in a bitcoin (BTC) investment trust that would be backed by the cryptocurrency and T-bills. The development was revealed in an SEC filing published on May 20. The Chicago-headquartered exchange — a subsidiary of the New York Stock Exchange Group — outlined that the proposed trust would invest solely in bitcoin and short-term U.S. Treasury securities with a maturity of less than one year, also known as T-Bills. According to the filing, the Trust’s objective is for the shares “to closely reflect the Bitcoin Treasury Index […] less the Trust’s liabilities and expenses.” The Index, NYSE Arca notes, has two components — one representing bitcoin and the other representing U.S. treasuries, cash, or cash-like instruments — and is calculated daily and used to determine the Index’s monthly allocation between its bitcoin assets and T-Bills assets. The filing adds that the Trust will aim to “dynamically rebalance its assets on a monthly basis to closely replicate the Index without the use of complex derivatives or leverage methods.” NYSE Arca has appointed the custody arm of major U.S. crypto exchange Coinbase — Coinbase Custody Trust Company, LLC — to maintain custody of the proposed Trust’s bitcoin assets in cold storage. The filing notes that with Coinbase Custody as its proposed bitcoin custodian, the Trust has obtained insurance for up to $200 million in coverage against theft from its hot and cold wallets, which is provided “by a syndicate of industry-leading insurers that are highly rated by AM Best.” The SEC now has 45 days to approve, reject or delay NYSE Arca’s proposed rule change, and up to 90 days to make a final decision, the filing states. NYSE Arca’s proposed Trust is a separate application from its proposal to list a bitcoin exchange traded fund (ETF) together with cryptocurrency index fund provider Bitwise Asset Management. The SEC delayed its decision on this ETF application earlier this month, soliciting public comment as it continues to consider the application. Just yesterday, the SEC again delayed its decision on another bitcoin ETF proposal from investment firm VanEck and financial services company SolidX for trading on the Chicago…
A fintech research institute set up by the People’s Bank of China looks to be widening its blockchain development efforts. The Shenzhen Fintech Research Institute has just announced a total of 29 job openings via the recruitment website Lagou.com, three of which focus on blockchain-related expertise. Specifically, the institute is looking for a blockchain development engineer, a blockchain architect and a senior technical expert, who will be responsible for developing and optimizing a distributed network that will be capable of delivering “large scale transactions.” Based on the recruitment information, the requirements for the roles include expertise on fundamental blockchain protocol development, knowledge of public blockchains, as well as experience in distributed network, smart contract and peer-to-peer protocols. The institute is also looking for a cryptography engineer that will be responsible for developing cryptography-related software and hardware products. Launched by the Chinese central bank and the Shenzhen Municipal Financial Regulatory Bureau, the institute’s primary job is to undertake fintech and digital currency-related projects initiated by the central bank and the Shenzhen municipal government. While the job openings do not specify what exactly the desired distributed network system will be used for, the institute trialed the so-called Bay Area Blockchain Trade Finance platform together with major banks in the country last year. Among the 29 new job openings, the institute is also looking for a trade finance product director who will be “exploring innovative trade finance business models.” The recruitment efforts follow the PBoC’s recent move to hire blockchain and legal talents for continuing the development of the country’s central bank digital currency project. PBoC image via Shutterstock
Reports of cryptocurrency and foreign exchange scams in the U.K. grew threefold in the last financial year – spiking to 1,834 from 530 in the previous year, according to the country’s financial watchdog. Citing data from Action Fraud, the Financial Conduct Authority (FCA) announced Tuesday, although the number of reported cases has increased, total reported losses actually fell from about £38 million ($48 million) to £27 million ($34 million). The average individual loss has also dropped to £14,600 ($18,575) from £59,600 ($75,827). The majority (81 percent) of the reported cases were related to cryptocurrency scams, the regulator added. Action Fraud director, Pauline Smith, said: “These figures are startling and provide a stark warning that people need to be wary of fake investments on online trading platforms. It’s vital that people carry out the necessary checks to ensure that an investment they’re considering is legitimate.” Scammers have increasingly been using social media platforms to promote their “get rich quick” schemes, often using fake celebrity endorsements, the watchdog said. Investors were often led to believe that their first investment would turn a profit. Earlier this year, the FCA published a survey, saying that 73 percent of U.K. consumers don’t know what a cryptocurrency is, yet many fall prey to such schemes after being drawn to the lure of quick profits. The regulator at the time said that it will consult on banning the sale of certain cryptocurrency derivatives to retail investors later this year – a ban the authority has been considering since last November. The FCA has warned several times on cryptocurrency derivatives products and unregistered crypto brokerage firms. It is also working with the U.K. government and the Bank of England, as part of the country’s Cryptoassets Taskforce effort to form regulatory guidelines for the cryptocurrency space. U.K. coins image via Shutterstock
There’s a party happening right now and everyone’s invited. The music’s playing, the fridge is loaded and the bathtub’s full of ice. All the ingredients for the sickest soiree are in place. There’s just one problem: the guests have yet to arrive. Welcome to the world of security tokens, where you can tokenize anything you like, but making it tradable is another matter entirely. Also read: Developer Creates Interwallet Transfer Plugin to Strengthen Bitcoin Cash Privacy STOs Are on the Rise But Liquidity Is Non-Existent HYGH is a peer-to-peer advertising network and content management system seeking to make outdoor displays affordable to businesses of all kinds. It’s currently raising funds via a token sale, and has elected for an STO over an ICO. Explaining the rationale, CEO Vincent Mueller said: “We see clear benefits to aligning incentives between the project and its backers, and we believe a compliant STO is the best way to achieve this. We’ve set a small check size of $500, in exchange for which investors will receive a 9% share of revenue.” A security token offering was chosen, he added, on account of it being the most ethical means of raising money, helping investors become long-term advocates for the company, rather than short-term token flippers, as was the case with the ICOs of yore. But how long-term are we talking about when it comes to trading security tokens? In the U.S., there’s generally a one-year lock-up before securitized assets become tradable, but that’s not to say that STO investors can exit after 12 months. Offloading any asset requires a counterparty willing to acquire it, and right now accredited investors with the means and will to purchase security tokens on the secondary market are thin on the ground – as are trading platforms themselves, for that matter. First Comes Infrastructure, Then Liquidity The Winklevoss twins might have caught flak for Gemini’s “Crypto needs rules” campaign, but when it comes to securities trading, they’re absolutely right. While the legal status of utility tokens can be debated ad infinitum, securities will always be securities, and thus any project pondering an STO must ensure they are au fait with all pertinent regulations before proceeding. Furthermore, any exchange wishing to list these assets requires a license…
The primary financial regulator of the United Kingdom, the Financial Conduct Authority (FCA), reports that crypto investors in the country lost over $34 million due to cryptocurrency and forex scams from 2018–2019 the Financial Times reports on May 20. According to the data, which the FCA gathered from the U.K. national fraud and cybercrime reporting center, Action Fraud, individual loss due to scams decreased from $76,000 to $18,500 while total losses fell by $14 million. However, the number of reports more than tripled to reach 1,834, with 81 percent of such reports being crypto scam claims. Per the report, the FCA is considering a ban on “high-risk derivative products linked to cryptoassets.” For now, FCA executive director Mark Steward cautions: “Scammers can be very convincing so always do your own research into any firm you are considering investing with, to make sure that they are the real deal.” The FCA reportedly stated that scammers use social media to find potential investors. The regulator also noted that scams will often use pictures of celebrities with fake endorsements alongside imagery of luxury goods like cars and watches. Last year, initial coin offering (ICOs) advisory firm Statis Group released a study, which found that over 80 percent of ICOs in 2017 were scams. The associated losses for that year totaled $1.34 billion. As recently reported by Cointelegraph, new evidence has surfaced suggesting that purported bitcoin (BTC) exchange Goxtrade is a scam. Goxtrade reportedly used the real names and pictures of unaffiliated parties such as blockchain figure Amber Baldet to fill their website staff page and is absent from the U.K.’s registry of companies and businesses.
The United States Securities and Exchange Commission (SEC) is “still in information-gathering mode” regarding a bitcoin (BTC) exchange-traded fund (ETF), the managing director of ETF.com told CNBC on May 20. Dave Nadig, managing director of а leading authority on ETFs, delivered his comments on the issue during an interview with the ETF Edge show. Nadig said: “It is clear the SEC is still in information gathering mode. […] Technically, there are deadlines, but honestly they [SEC] can do what they want, they can kick this down the road until they are comfortable, it is clear from what we are hearing.” While Nadig argued that an ETF will eventually be approved, he does not think it is imminent, and could take at least a quarter. He added that regulators will get more comfortable as the market matures. Earlier today, the SEC announced that it would delay its decision on a proposed VanEck bitcoin ETF, as it gathers more information from the public. As previously reported, the SEC has also delayed its decision on whether to approve or disapprove Bitwise’s ETF, and requested for comments from interested parties. In December of last year, SEC commissioner Hester Peirce, dubbed “Crypto Mom” by the community for her dissent with the SEC’s decision to reject a bitcoin ETF proposed by Cameron and Tyler Winklevoss, said that a cryptocurrency or bitcoin ETF is “definitely possible,” but it could be years away. In early May, former chairman of the Commodity Futures Trading Commission (CFTC) Gary Gensler said that for the cryptocurrency market to prosper and potentially grow, investors should know that they have both investor and consumer protection embodied in the law in case of market manipulation or losing of private keys, among other issues.
The United States Securities and Exchange Commission (SEC) has delayed its decision on the VanEck bitcoin (BTC) exchange-traded fund (ETF) proposal, according to an official SEC filing on May 20. The SEC has added a 35 day period for gathering more information and opinions on the proposal, which was initially filed by the Chicago Board Options Exchange (CBOE) last year. In January, CBOE withdrew its request for a rule change when the U.S. government shutdown decreased the SEC’s operational abilities, then subsequently reapplied on January 31 after the government shutdown was resolved. In today’s filing, the SEC lists 14 questions open to the public about the proposal, with the intent of using the answers and arguments provided to help them reach a verdict. The questions specifically pertain to protecting investors and public interest from fraud and similar exploitations. As per the report: “The Commission is instituting proceedings to allow for additional analysis of the proposed rule change’s consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,’ and ‘to protect investors and the public interest.’” The SEC previously delayed its decision on the Securities Act update proposal which would allow bitcoin ETFs to be traded on CBOE. CBOE initially filed for the proposed SEC rule change on February 15 with a 45 day period assigned for approval or disapproval. Since then, the decision has been postponed twice. ETFs are securities that are valued as a percentage of the associated asset, making them functionally similar to traditional stocks. The funds are seen by some in the industry as a step toward the mass adoption of cryptocurrencies and a sign crypto’s maturation as an asset.
NYSE Arca has formally applied to the Securities and Exchange Commission (SEC) for a rule change that would allow it to list shares in a proposed bitcoin investment trust. The United States Bitcoin and Treasury Investment Trust, managed by Wilshire Phoenix Funds, would invest exclusively in bitcoin and short-term U.S. Treasury securities, according to a filing made by the exchange late Monday. Coinbase’s custody arm would act as the custodian for the investment trust’s bitcoin, the filing said. Working through Coinbase, the trust has obtained up to $200 million of insurance coverage against theft from its hot and cold wallets from “a syndicate of industry-leading insurers that are highly rated by AM Best.” This investment vehicle is a separate effort from the bitcoin exchange-traded fund (ETF) that NYSE Arca and Bitwise are seeking SEC approval to list. Wilshire filed a prospectus for the vehicle in January, but Monday’s filing formally kicks off the regulatory approval process. The SEC now has 45 days to approve, reject or delay the proposed rule change, and up to 90 days to make a final decision, according to the filing. Monday also saw the SEC delay a decision on a proposed exchange-traded fund (ETF), kicking forward a final determination on that proposed product to as late as October. Treasury bond image via Shutterstock.