Speak Out: Discussing the Nature of Stablecoins

Speak Out: Discussing the Nature of Stablecoins

On the one hand, stablecoins have no extreme volatility as they are pegged to other assets like USD or gold. On the other, the peg can sometimes be lost, and arguably the most popular stablecoin (USDT) is mainly known for being the most controversial. Today, we invite you to discuss the stability of stablecoins and to share your opinion about what you consider to be the outstanding ones. Reply in the comments below!

Short-Term Crypto Losses Surged Fivefold in 1st Month of 2019: Credit Karma Tax

Short-Term Crypto Losses Surged Fivefold in 1st Month of 2019: Credit Karma Tax

The amount of Credit Karma Tax filers that reported short-term crypto losses in the first month of 2019 surged more than fivefold over the same period in 2018, the firm revealed on April 3. Credit Karma Tax, a tool launched by San Francisco-based personal finance firm Credit Karma back in 2016, offers a free tax filing service that can be used to report gains or losses from trading cryptocurrency. Today, Credit Karma released a comparative report of capital crypto gains and losses on federal taxes between Jan. 28 and Feb. 22, 2019, compared to those who filed their 2017 federal income taxes with Credit Karma Tax between Jan. 29 and Feb. 23, 2018. According to the report, the number of Credit Karma Tax filers who reported short-term capital crypto losses in the first month of the 2019 filing season soared by 521%. A short-term gain or loss takes place when an investor sells an asset that was held within one year, while a long-term gain or loss envisions an asset that was held for more than one year, Credit Karma explains. Crypto investors reporting long-term gains in the same period increased by 35 percent year over year, with early Credit Karma Tax filers reporting an average gain of $15,352 during the first month of the 2019 filing season. The average reported short-term crypto losses amounted to $3,405, which represented a 322 percent increase in the average short-term loss from the first month of last year’s filing season. In mid-January, Credit Karma released a survey showing that 53 percent of Americans planned to report their gains and losses for taxes from crypto, while 35 percent of respondents said that they sold their crypto at a loss and will not report on their tax returns. Recently, Big Four auditing and professional services firm Ernst & Young launched a tool for accounting and preparing taxes on cryptocurrency holdings. The new tool dubbed EY Crypto-Asset Accounting and Tax is designed to facilitate accounting and tax calculations for digital currency transactions.

Bloomberg: Bitcoin’s Recent Renaissance Could Be Linked to Algorithmic Trading

Bloomberg: Bitcoin’s Recent Renaissance Could Be Linked to Algorithmic Trading

The recent crypto market jump could be linked to algorithmic trading, Bloomberg writes on Wednesday, April 3. Algorithmic trading — a method that uses automated software to detect trends and determine when trades should be made — has been on the rise in the last few months, according to Bloomberg. The industry has seen 17 new algo or quantitative funds launched since September, an amount that purportedly comprises 40 percent of crypto hedge funds started during this period. While crypto funds in general lost around 72 percent due to the 2018 bear market, these algo funds reported on gains of between 3 percent and 10 percent per month during the so-dubbed crypto winter. Bloomberg states that Bitcoin’s (BTC) unexpected 20 percent surge price on Tuesday, April 2, shortly after the Asian markets opened, might have been provoked by a $100 million trade made on three major exchanges. As experts told Reuters, a 20,000 BTC order (around $100 million at press time) was spread across United States-based crypto exchanges Coinbase and Kraken, as well as Luxembourg’s Bitstamp. Triggered by the giant order, the bots could then start trading, forcing the prices and volumes to rise. Some entrepreneurs quoted by Bloomberg think that algo trading will have a positive impact on the crypto industry. Wei Zhou, CFO of Malta-based crypto exchange Binance, says that they are going to be the new rock stars of the industry. Meanwhile, others fear that algo trading can trigger market manipulation. Travis Kling, founder of the Los Angeles-based crypto hedge fund Ikigai, told Bloomberg that some of them could use fake orders to trick other traders. Bloomberg has issued a series of articles and TV spots citing the possible reasons behind the visible market uprising. For instance, Bloomberg author Eric Lam recalled an April Fool’s Day story that claimed that the U.S. Securities and Exchange Commission had finally approved a Bitcoin ETF as possibly affecting the crypto markets. Another reason cited by Bloomberg is the upcoming question of Brexit, as some believe that investors are changing pounds to BTC in the wake of Britain’s divorce with the EU.

US SEC Releases No-Action Letter Confirming TurnKey Jet ICO Tokens Are Not Securities

US SEC Releases No-Action Letter Confirming TurnKey Jet ICO Tokens Are Not Securities

On April 3, the United States Securities and Exchange Commission (SEC) has issued a no-action letter to TurnKey Jet, confirming that the TKJ tokens issued during the startup’s initial coin offering (ICO) are not securities. In the letter, the regulator specifies that it considered that the platform will be fully developed and operational at the time the tokens are sold, and the funds won’t be used to develop the platform. It also mentions that the tokens will be immediately usable and have been marketed for their utility, not potential profits. Other reasons cited are that the price of the tokens during the sale will be fixed at one dollar, each token will be granting one dollar worth of service and that the company will only purchase them at a discount unless a court orders it to liquidate them. The SEC also notes that since TKJ transfers will be limited to TKJ wallets only and cut out from wallets external to the platform, it does not consider the tokens to be securities. Lastly, the regulator specifies that their position is based on the representations made by the company in a letter previously sent to the SEC, dated April 2. Forbes reported on the SEC’s letter, claiming that it is the first no-action letter sent to a cryptocurrency business, and defining the document as historic. As Cointelegraph reported today, the SEC has published a framework to help market participants ascertain whether or not a digital asset is deemed to be an investment contract, and therefore a security. At the beginning of the current month, news broke that the SEC is also looking to hire a crypto specialist attorney advisor for its Division of Trading and Markets who will reportedly be tasked with establishing a plan for dealing with crypto and digital asset securities.

This New Lightning App Aims to Make Getting Paid in Bitcoin Easier

This New Lightning App Aims to Make Getting Paid in Bitcoin Easier

A new app today has launched that aims to tackle the problem of “inbound capacity” on bitcoin’s lightning network. One of the challenges facing the still-in-development payment network centers around the need to have sufficient funds on the opposite end of their lightning channel, known as inbound capacity. Put more simply, users need to undertake several steps before they can actually receive money – a complicating factor for users such as merchants that want to accept funds via the network. It’s also a quandary that some participants in the global “lightning torch” experiment have run up against. The new Lightning Power Users app, released by developer Pierre Rochard, will join other services that are seeking to make it easier for users to get inbound capacity. That includes Bitrefill’s Thor and the recently-launched Lightning Loop from Lightning Labs. Lightning Power Users takes a slightly different approach than Thor, with a shorter limit to how long the service will keep a channel open if it isn’t used. This is for users who might just want to accept a payment “imminently” and want a short-lived channel for a smaller fee, according to Rochard. Rochard, known for developing a “node launcher” to make the lightning setup process easier, also launched the service because he worries about any one of these services growing too large and effectively making bitcoin more centralized than it needs to be. As he put it in conversation with CoinDesk: “I think what I want to see is a large variety of ways to do this. If we rely on just LNBIG or other services, then bitcoin’s not as decentralized. So, that’s my goal. To provide a reliable service. At first, he said, people were submitting via Google Form that he would use to manually set up a channel. But the new service automates the process. As such, some users have tried Lightning Power Users already in a sort of undercover trial run leading up to the launch, with some saying they’re happy with the service it provides and that the fee for use is “reasonable.” Rochard added: “It’s one of the more legitimate criticisms of lightning. We’ll see where it goes. there’s healthy debate among developerss about how to solve this issue.” Still, he thinks that…

Over 40 Central Banks Are Considering Blockchain Currencies: Davos Report

Over 40 Central Banks Are Considering Blockchain Currencies: Davos Report

More than 40 central banks worldwide are experimenting with blockchain technology, says a new report by the World Economic Forum. Published Wednesday, the report analyzes how different central banks are either examining what blockchain can be used for or are outright experimenting with central bank digital currencies (CBDCs). “It’s very much the case that several central banks are looking at this,” said Ashley Lannquist, a project lead in blockchain and distributed ledger technology at the World Economic Forum and the primary author of the report. She counted at least 44 different central banks that are exploring, researching or actively experimenting with blockchain technology, with an eye to potentially issue a digital currency in the eventual future. “Pilot and experimentation work thus far on this subject has yielded some mixed results, some optimistic results, and the summary of where we are right now is that central banks are proceeding with caution, yet highly involved in research,” Lannquist told CoinDesk. At present, these banks have to navigate a host of technical and policy issues, she said. On the technical side, the institutions need to ensure that their new systems work as intended and whether they are preserving data accurately. Other questions pertain to the policy aspects, including a central bank’s monetary policy. These issues need to be studied to avoid any unintended consequences, Lannquist said. Those caveats aside, present trends bode well for CBDCs, she said:  “I’d say in the next couple years, speculating towards the future and being a bit conservative, I would expect a couple central banks to issue a central bank digital currency and that’s because we know that at least a few are.” The National Bank of Cambodia, for example, plans to incorporate blockchain technology for its national payments system by the end of this year. As Lannquist’s report notes, the bank is looking to tackle two issues: many of the nation’s residents are underbanked or unbanked entirely, and the banking system itself is not very efficient. “They currently have a very fragmented domestic payment system and many [residents] are unbanked,” she said. “Instead of using the bank they use private payment apps that don’t even use the bank so they sometimes can’t pay each other.” The new blockchain-based payments system may serve…

3 Reasons Bitcoin’s Price Suddenly Surged Back to $5K

3 Reasons Bitcoin’s Price Suddenly Surged Back to $5K

The crypto market sprang back to life with bitcoin’s surge to nearly 5-month highs yesterday. But why? To those who have been paying attention to the charts, it shouldn’t come as a surprise. The leading cryptocurrency by market value jumped nearly $1,000 to $5,080 in a 60-minute window early on Tuesday, confirming a transition from bear market to bull market that it had been signaling for some time. In fact, after a year-long bear market, savvy traders were waiting on a trend change that would gain credence if and when prices established the most basic of all bullish technical patterns – a higher low and a higher high on its weekly charts. (A higher high would have been confirmed above $4,236.) Looking back, a big move was overdue, as bitcoin’s average daily trading range had slipped to two-year lows in March. An extended period of low volatility often ends up with a violent move on either side. That low volatility period ended with a strong bullish breakout, possibly due to the following three reasons: 1. Technicals were foreshadowing a bullish move As mentioned, bitcoin’s charts have been signaling for some time that a bottom may be in the market. This first began in late February, when we reported that bitcoin’s 50-week moving average dropped below the 100-week moving average, confirming a bearish crossover – the first since April 2015. Long-Term Bitcoin Price Indicator Turns Bearish, Suggesting Bottom May Be In At the time, we wrote that the lagging indicator had turned bearish for the first time in four years, suggesting bitcoin’s price may have bottomed out after a year of declining prices. We wrote: Put simply, it takes a great effort on the part of the bears to push the 50-week MA below the 100-week MA. As a result, the bear market is usually exhausted by the time the crossover is confirmed, which seems to be the case with BTC. That, however, was just the beginning. Several longer duration indicators, like the weekly money flow index (MFI) and the moving average convergence divergence (MACD), would add evidence to the trend. On March 4, the MFI bottomed, contradicting the lower low in bitcoin’s price. That bullish divergence is widely considered an early warning of a bearish-to-bullish trend reversal,…

Markets Update: Bitcoin Cash Rockets Forward Leading the Crypto Bull Rally

Markets Update: Bitcoin Cash Rockets Forward Leading the Crypto Bull Rally

Cryptocurrency prices have improved a great deal over the last seven days and many digital assets saw a significant spike in value on April 2. The entire market capitalization of all 2,000-odd coins is steadily approaching $200 billion. The market forerunner so far is bitcoin cash (BCH), which is up well over 45% in the last 24 hours. Also read: Bitcoin Cash Markets and Network Gather Strong Momentum in Q1 Crypto Economy Nears $200 Billion Digital currency fans are far more optimistic this week since many cryptocurrencies gained between 10-60% in the last two days. The overall cryptocurrency valuation of the economy today is $174 billion at the time of publication. Moreover, global trade volume has increased fivefold ($77 billion) over the last three weeks, which means people are swapping a lot more coins these days. Bitcoin core (BTC) markets show BTC is trading for $5,022 with a market cap of around $88.4 billion today. The cryptocurrency is up 5.4% over the last 24 hours and BTC is also up 23% for the week. This is followed by ethereum (ETH) markets, where each ETH is swapping for $170 per coin this Wednesday. The third highest market valuation belongs to ripple (XRP) which is trading for $0.36 per token. Litecoin (LTC) still holds the fourth position and each coin is $85 per LTC at press time. Bitcoin Cash (BCH) Market Action The top 10 forerunner leading the pack is bitcoin cash (BCH) by a long shot. BCH prices have jumped well over 50 percent in the last 24 hours. Since then there’s been a pullback in price but BCH is still more than 45 percent higher than it was the day before. Weekly statistics show BCH is also up 69 percent for the week as each coin is priced at $288 at press time. BCH recently captured the fifth largest market position with an overall market cap of around $5.11 billion today. The top five exchanges swapping the most BCH by trade volume are Lbank, Binance, Fcoin, Huobi, and Coinbase. The top trading pair with bitcoin cash today is USDT which captures 43.8% of trades. This is followed by BTC (34.4%), USD (11.9%), KRW (4.2%), and JPY (2%). There’s been a big increase in EUR/BCH pairs…

‘This Is Not an ICO, Just Barter’ – How Issuers Attempt to Evade Scrutiny

‘This Is Not an ICO, Just Barter’ – How Issuers Attempt to Evade Scrutiny

Some issuers of initial coin offerings have started to change the terminology they use to refer to their token sale in a bid to evade the attention of regulators – the hawkish U.S. Securities and Exchange Commission (SEC) in particular. With research finding that fewer than half of ICO projects make it past the first few months of their token sale, regulators have become increasingly concerned about ICOs, many of which have turned out to be elaborate scams. Also read: Why Africa Continues to Lag Behind in Cryptocurrency Adoption Bartering an ICO In 2017, Tokenpay fancied itself as an initial coin offering, targeting to raise $41 million by selling a part of the total 25 million of its Tpay tokens to the public. Today, the company, which was attempting to build a ”secure blockchain payments platform,” denies having floated an ICO at all, to the point of claiming its token was valueless. “We never conducted an ICO,” Tokenpay stated in a fire-fighting tweet, to an unconvinced audience. “We bartered our unique blockchain coins called $Tpay for one called $BTC,” it retorted, adding: “Nowhere will you find any suggestion of an implied investment or offering of any sort. In fact, every single page on the whitepaper and website states that the coin has no value.” This may be the most complex definition of an initial coin offering yet. Even users of Tpay found this difficult to believe. “I didn’t walk to the park. I carried my body to the park with the willful assistance of my legs,” snorted @woolsim. Ari Paul commented: “There are probably some interesting nuances where this makes a difference, but for most regulatory purposes pretty sure it’s a “sale” if you receive something of value for something you are giving away.” Tokenpay stood its ground, declaring its “barter” was closed to U.S. citizens, therefore the SEC couldn’t touch it. However, U.S. attorney @stephendpalley proved the company wrong, creating an account inside the U.S. within 15 seconds while “eating refried beans” at a cafe. “To be clear, we have never sold, bartered or negotiated any coins with U.S. persons. Nor do we make our products, including wallets and DEX, available to U.S. persons. We are not a U.S. company,” Tokenpay charged. But it…

SEC Staff Publish Framework for Determining If Digital Assets Are Investment Contracts

SEC Staff Publish Framework for Determining If Digital Assets Are Investment Contracts

Staff at the United States Securities and Exchange Commission (SEC) have published a framework to help market participants ascertain whether or not a digital asset is deemed to be an investment contract, and therefore a security. The new “Framework for ‘Investment Contract’ Analysis of Digital Assets” was published on April 3, accompanied by an official statement. Notably, the framework is the work of two SEC Commissioners: Bill Hinman, director of the SEC’s Division of Corporation Finance and Valerie Szczepanik, Senior Advisor for Digital Assets and Innovation — colloquially known as the Commission’s “crypto czar.” The guidance is therefore not a rule, regulation, or statement of the U.S. Commission, which has reportedly neither approved nor disapproved its content. As the authors stress, the framework is not intended to be exhaustive nor to provide formal legal advice, but to serve as an analytical tool that will help operators of initial coin offerings (ICO) and token issuers determine whether their offering is likely to fall subject to federal securities laws. Market participants are thus urged to further consult the formal rules and regulations available on the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub). The framework focuses on determining whether a digital asset has the characteristics of one particular type of security — an investment contract — rather than covering the full gamut of possible security classifications. In accordance with the 71-year old Howey Test, such a contract is deemed to exist where there is an investment in a common enterprise, in which investors are reasonably led to expect profits that other generate. The authors’ framework tackles in detail all aspects of the Howey test in regard to digital assets, beginning with the investment of money and the distinct element of a common enterprise that holds for investment contracts. In regard to this latter, the authors note, “in evaluating digital assets, we have found that a ‘common enterprise’ typically exists.” The framework devotes just over six pages to the most complex criterion — “a reasonable expectation of profits derived from the efforts of others” — noting that this is usually the “main issue in analyzing a digital asset under the Howey test.” The authors state that a large part of the inquiry for this criterion focuses on…