Austrian Government to Notarize $1.3 Billion Bond Auction Using Ethereum

Austrian Government to Notarize $1.3 Billion Bond Auction Using Ethereum

The Austrian government is to use the ethereum blockchain to notarize the auction of a government bond worth €1.15 billion, or around $1.3 billion. The Federal Government’s Finance Agency (OeBFA) has assigned banking giant Oesterreichische Kontrollbank (OeKB) to carry out the auction on its behalf on Oct. 2, according to a finance ministry announcement Tuesday. The bank’s responsibilities will include deploying the notarization service to authenticate auction transaction data and subsequently store it on the blockchain, the agency explained. A news report from Kleine Zeitung on Tuesday indicated that OeKB has confirmed that it will use internal IT resources to oversee the deployment, which will utilize the ethereum blockchain to store the data as hash values on the public network. Angelika Sommer-Hemetsberger, member of the management board of OeKB, commented in the announcement: “Blockchain technology offers great potential for increasing efficiency and ensuring the quality of bank processes. Therefore, we have been dealing with this topic intensively for some time now and have already tested several prototypes. Starting the real operation on behalf of OeBFA is a pleasing and logical next step.” This is the Austrian government’s first move to adopt blockchain for domestic financial transactions, the OeBFA said, adding that it views the emerging technology as an “economic policy focus.” “This added security contributes to a high level of confidence in the auction process of Austrian government bonds and strengthens Austria’s good standing in the market, which can also indirectly contribute to favorable financing costs,” said Markus Stix, head of the OeBFA. The effort marks yet another case in which blockchain is being adopted in a bond-issuance process. Just last month, the World Bank Group announced it raised $81 million during its landmark bond issuance using a private blockchain network created by the Commonwealth bank of Australia. And, last July, the manufacturing company behind automaker Mercedes-Benz – Daimler AG – issued a €100 million blockchain bond on a private version of the ethereum blockchain. Vienna, Austria, 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.

How I Lost My Faith in Private Blockchains

How I Lost My Faith in Private Blockchains

Angus Champion de Crespigny is an advisor to various companies and projects on bitcoin, cryptocurrency and identity infrastructure. He spent 11 years at EY, with the last four consulting on blockchain and crypto assets until his departure in August. Since 2015, while there has been a myriad of permissioned blockchain announcements from enterprises, questions have been raised as to the long-term viability of these projects. A common theme in the small number of projects that have gone live is a disconnect between an understanding of traditional industry and the technical understanding required has made the value difficult to define. While there is most certainly a disconnect between business processes and the technology, rather than limiting the development of business cases, I believe it has in fact led to the opposite problem: unjustified beliefs and hype of what the technology can do. I also believe it remains to be proven if permissioned blockchains provide a real business benefit at all. The reason I question whether there is a benefit is that I spent four years working with financial institutions who were trying to find it. While in the first couple of years I was optimistic of their potential, as more and more use cases were objectively evaluated and failed against other technology, I objectively assessed the technology against alternatives and reevaluated my assumptions.What this led to is a shift to advising clients to leverage technology better suited to their problems, and a greater a focus on public blockchains and crypto assets. The challenges I found in applying permissioned blockchains in industry came down to the following: definition, differentiation, process impact, and necessity. Definition The difficulty in describing the challenges with permissioned blockchains begins with the difficulty of defining what it is. At its most basic level, a blockchain could be defined as a data structure, or simply a chain of blocks. However, this definition is rarely what people mean when they talk about blockchains. Typically, discussions around blockchains talk about consensus and reconciliations, due to the original permissioned blockchains that were forks of bitcoin or ethereum being used in a private manner. As time went on, different consensus algorithms were introduced, as well as different ways to store data that no longer used blocks to share…

VanEck, SolidX Unfazed By SEC Bitcoin ETF Delay

The U.S. Securities and Exchange Commission (SEC) recently moved to delay their decision on yet another bitcoin exchange-traded fund (ETF). The move, announced last week, represented the second delay since the proposal was initially filed by options exchange Cboe in partnership with investment management firm VanEck and blockchain technology company SolidX on June 20. As highlighted by Jake Chervinsky, an attorney at law firm Kobre & Kim, the next deadline for a decision is now December 29. Referencing a specific section of U.S. law governing the SEC, instituting “proceedings to determine whether registration should be denied” effectively gives the Commission up to 180 days to make a decision from the date the VanEck and SolidX proposal was published for comment in the Federal Register, which was July 2. This time around, however, neither VanEck or SolidX are particularly surprised by the latest decision. Saying that the delay was entirely “expected,” Gabor Gurbacs, the director of digital asset strategy for VanEck, reiterated to CoinDesk that the company’s commitment in bringing to market “a liquid, insured and appropriately regulated physical bitcoin ETF” was resolute. Echoing the same sentiment, CEO of SolidX Dan Gallancy also affirmed that last Thursday’s decision had no effect on his outlook over the proposal. Even industry experts like as Eric Balchunas, senior ETF analyst for Bloomberg Intelligence, explained that in his view, the order looked “like more of the same in terms of seeking comment and asking questions regarding some of their major concerns.” Balchunas added in an email: “My odds of approval have not changed in either direction” – which, as of August 3rd, was between a 5 to 10 percent chance before the end of 2018. Taking the first step Indeed, though the chances of approval appear slim, these odds are still higher than the nine other bitcoin ETF proposals put forward by several different companies including Direxion, GraniteShares and ProShares – all initially rejected in one fell swoop by the SEC back in late August. These rejections are now under review by the agency’s leadership and are stayed until further notice, but it’s no secret that the VanEck and SolidX ETF proposal differed from all these others in one fundamental way. Unique about the VanEck and SolidX bitcoin ETF bid is that…

US Regulator Moves to Sanction Plexcoin’s Lacroix and Paradis-Royer

US Regulator Moves to Sanction Plexcoin’s Lacroix and Paradis-Royer

News United States Security and Exchange Commission (SEC) is reportedly seeking further sanction against alleged crypto scammers Dominic Lacroix and Sabrina Paradis-Royer of Plexcoin fame. According to Maria Nikolova of Financefeeds, the two continue to defy court orders. Also read: 3D Gun File Company Reorganizes After Cody Wilson Resigns SEC to Further Sanction Alleged Crypto Scammers Financefeeds is reporting the US SEC seeks sanctions against individuals behind alleged cryptocurrency scam Plexcoin, Dominic Lacroix and Sabrina Paradis-Royer. It is claimed the two, who have been the subject of the regulator’s ire for nearly two years, continue to disobey court orders. Dominic Lacroix and Sabrina Paradis-Royer Almost a year ago, these pages documented the then new Cyber Unit division of the SEC. Less than three months later, the division filed its first charges against what it alleged was an initial coin offering (ICO) scam. “Release 2017-219, SEC Emergency Action Halts ICO Scam,” we wrote, “termed Canadian Dominic Lacroix ‘a recidivist Quebec securities law violator.’ Mr. Lacroix and his company, Plex Corps, are accused of offering a token capable of yielding ‘a 1,354 percent profit in less than 29 days.’” It also appears “Mr. Lacroix was found in contempt of court in October of this year, ‘following an application filed by the Autorité des marchés financiers,’ the Quebec-based regulator noted. This came after a Tribunal over the summer found Mr. Lacroix guilty of violating securities law,” we documented, showing the current SEC action wasn’t the first time he has been accused of skirting court orders. Defiance The ongoing case by the SEC against the pair seems to have no end in sight. The case “continues at the New York Eastern District Court, with the US regulator having hard time to make the defendants co-operate, or, at the very least, comply with Court orders,” Financefeeds notes. This week the SEC asked the court to to compel and sanction the two, as “defendants continue to ignore court orders concerning discovery, accounting of assets and repatriation of assets.” The court has had an ongoing issue as far back as last year, when it demanded accounting for the money taken by the various alleged schemes. Deadlines were extended. But still, according to reports, nothing. No bank statements. No sworn documentation. “Furthermore,” Ms.…

US Judge Sides With CFTC in Fraud Case, Ruling Cryptos Are Commodities

US Judge Sides With CFTC in Fraud Case, Ruling Cryptos Are Commodities

A U.S. judge has sided with the Commodity and Futures Trading Commission (CFTC) in a lawsuit involving an allegedly fraudulent crypto investment scheme, ruling that the cryptocurrencies involved are commodities for the purpose of the case. As CoinDesk reported in January, the CFTC charged two individuals and a Las Vegas-based business called My Big Coin Pay over an alleged cryptocurrency-related fraud. Subsequently the defendants – Randall Crater, Mark Gillespie – filed a motion to dismiss the case on the grounds that the cryptos involved are not commodities and, as such, the CFTC has no jurisdiction over the case. However, Judge Rya W. Zobel from the district court of Massachusetts agreed with the counterarguments made by the CFTC and denied the motion to dismiss on Wednesday. As a result, the case will continue. The defendants contended that My Big Coin – which Crater and Gillespie marketed as a cryptocurrency that can be mined and traded – did not deal with any “contracts for future delivery.” Therefore, it’s not a commodity under the Commodity Exchange Act (CEA), the two argued. However, the CFTC refuted that contention, stating: “A ‘commodity’ for purposes of [the CEA definition] is broader than any particular type or brand of that commodity.” “Pointing to the existence of bitcoin futures contracts, [the CFTC] argues that contracts for future delivery of virtual currencies are ‘dealt in’ and that My Big Coin, as a virtual currency, is therefore a commodity,” the CFTC continued. “The text of the statute supports plaintiff’s argument. The Act defines ‘commodity’ generally and categorically, ‘not by type, grade, quality, brand, producer, manufacturer, or form,'” the Judge wrote. The decision is the latest instance in which cryptocurrencies involved in an alleged fraud lawsuit have been determined by a U.S. judge to be commodities that are subject to the jurisdiction of the CFTC. CoinDesk reported in March that another U.S district judge also backed the financial watchdog and made a similar decision in a fraud lawsuit concerning a firm called CabbageTech. The court has most recently postponed any decision on the CabbageTech case, also over allegations of fraud, pending further responses to be filed by the CFTC against the company’s owner Patrick McDonnell. My Big Coin by CoinDesk on Scribd Gavel and U.S. flag image via Shutterstock The leader…

$6.3K: Bitcoin Sell-Off Could Resume Should Key Support Break

$6.3K: Bitcoin Sell-Off Could Resume Should Key Support Break

Bitcoin (BTC) is currently still being squeezed into a tightening range, with support at $6,300 being a key level for the bulls to defend, technical charts indicate. The leading cryptocurrency carved out a temporary bottom around $6,100 earlier this month and crossed resistance at $6,600 last Friday, confirming a double bottom bullish reversal. However, the ensuing rally ran out of steam at highs above $6,800. More importantly, prices have fallen back below $6,600 this week, invalidating the bullish setup. While the price action witnessed in the last seven days is demoralizing for the bulls, only a move below $7,400 – support of the trendline connecting the Sept. 8 low and Sept. 18 low – would confirm a bearish revival. As of writing, BTC is trading largely unchanged on the day at $6,480 on Bitfinex. Daily chart On the daily chart, BTC has charted a bear flag – a bearish continuation pattern – which indicates the sell-off from the monthly high of $7,429 would resume if the cryptocurrency finds acceptance below the flag support (support of trendline from Sept. 78 lows) of $6,400. A bear flag breakdown, if confirmed, would open the doors to $5,400 (target as per the measured move method). Moreover, it would also validate the bearish view put forward by the negative crossover between the 5-month and 10-month exponential moving averages (MAs). Still, the bears would need to observe caution as the area around $6,000, which has acted as a strong support in the recent past, may put the brakes on the sell-off. Hourly chart Over on the hourly chart, BTC is already on the defensive, having breached the rising channel to the downside. Further, the 100-hour moving average (MA) has just crossed the 200-hour MA, confirming the path of least resistance is to the downside. As a result, the odds of BTC falling below the crucial support of $6,300 in the next 24 hours are high. View BTC could be in for a bigger drop toward the June low of $5,755 if the flag support of $6,300 is breached. On the way lower, BTC may encounter strong support around $6,000. A solid rebound from that level would neutralize the bearish setup. On the higher side, a convincing move above $6,588 (previous day’s…

Goldman Sachs Leads $25 Million Funding for Blockchain Startup Veem

Goldman Sachs Leads $25 Million Funding for Blockchain Startup Veem

Blockchain payments startup Veem has closed a $25 million funding round led by Goldman Sachs, it announced Wednesday. The firm, which rebranded from Align Commerce alongside another $26 million Series B raise in 2017, also saw participation in the new strategic round from investors including GV (formerly Google Ventures), Silicon Valley Bank, Kleiner Perkins and Pantera Capital. Veem offers a multi-rail payments platform – including both traditional SWIFT-based transfers and blockchain networks – aimed to provide speed, security and low fees by selecting the most advantageous route for a particular transfer, it said in a press release. Its mission, Veem says, is to address the issue of small business owners being “forced to deal with a slow, outdated, and expensive wire transfer system to send and receive international payments.” The release continues: “SWIFT, a 40-year-old technology, consistently slaps small businesses with fees, loses payments, and lacks the transparency necessary to ensure reliability and security.” Veem also offers some detail on its customer growth in the release, saying the user base has grown “exponentially” from 590 customers at the time of its Series A funding round in 2015. By the Series B stage that had increased to 18,000, and is now “over 80,000 small businesses in 96 countries,” the startup claims. “We’re thrilled to have Goldman Sachs lead our investment round. This funding will help us expand our footprint, increase our distribution and form new strategic partnerships,” Veem CEO and founder Marwan Forzley said. Goldman Sachs Tower 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.

Bitpay and BTC.com Team: 1 Million Users Gain Access to $1 Billion Merchant Market

Bitpay and BTC.com Team: 1 Million Users Gain Access to $1 Billion Merchant Market

News BTC.com has . announced its wallet will enable Bitcoin Improvement Proposal 70 (BIP-70) for payment transactions, which is especially helpful between customers and merchants, becoming an industry standard of sorts. The wallet has more than one million users, and with BIP-70 they will be able to buy products from popular processing platform Bitpay, which has a $1 billion merchant market. Also read: 3D Gun File Company Reorganizes After C aody Wilson Resigns BTC.com Wallet Users Can Now Be Connected to Bitpay Merchants BIP-70 is a favorite of merchants because it provides for secure end-to-end communication to customers all over the world. Payments are routed and confirmed onchain. And with BTC.com users now able to safely store their private keys on its multi-sig wallet, they retain control over their coins, and have a choice of more goods and services than ever. Sean Rolland, Director of Product at Bitpay, explained, “We appreciate BTC.com’s support for BIP-70 as Bitpay works to make Bitcoin commerce payments easier and even more secure. With BIP-70, we have seen a drop from an 8%+ payment error rate (in dollars) to a 0.27% error rate. It’s this ability to ensure correct payments using BIP-70 helps the entire industry to grow.” Since 2015, BTC.com claims to have processed more than $5B worth of bitcoin cash (BCH) and bitcoin core (BTC) on behalf of one million users. Bitpay’s merchants, which number in the hundreds of thousands, only accept BIP-70 wallets. It’s All About Commerce BTC.com’s VP of Business Operations, Alejandro de la Torre, detailed, “We’re always striving for new methods and partnerships to expand the use of BTC and BCH as a currency and integrating with Bitpay is an important step towards transacting with retailers and merchants. Cryptocurrencies can begin to compete with credit card and mobile transactions by capitalizing on current inefficiencies in traditional payment processing services and extend the boundaries of commerce. Enabling customers, merchants and the Bitcoin community to utilize Bitcoin in commerce will sow the seeds for cultivating deep and sustainable growth from the whole bitcoin community.” Considering crypto’s extended bear market, spanning the bulk of the present year, proponents of mainstreaming have had a tough sell. Perhaps what might sway skeptical retailers is convenience of onboarding for customers (frictionless…

Legit vs. Illicit Crypto: North and South Korean Approaches Compared

Legit vs. Illicit Crypto: North and South Korean Approaches Compared

South and North Korea may be separated by a border that’s only 2.5 miles wide, but the two nations couldn’t possibly be more different, at least when it comes to crypto. South Korea has emerged over the past few years as one of the world’s major crypto-trading centers, with the BTC-KRW (Korean won) market being the fourth biggest among national fiat currencies. By contrast, most North Koreans have almost zero knowledge of cryptocurrencies, even though their government has been engaging in Bitcoin mining and the hacking of crypto exchanges in a bid to secure an alternative revenue stream. As the following analysis will explain, this marked divergence is a product of similarly divergent conditions. South Korea is the 11th biggest economy in the world and ranks highly in more than one global index of innovative nations. Meanwhile, North Korea is one of the globe’s poorest nations, with an estimated GDP of around $40 billion. Its situation also isn’t helped by the fact that it’s ruled by a totalitarian, one-party government that makes individual enterprise all-but impossible, and that it’s subject to a range of international sanctions. Yet, it’s this combination of autocracy, sanctions and poverty that, interestingly enough, has led the North Korean government toward crypto as a means of propping itself up and pursuing its own ends. Which goes to show that, just as individuals in developed nations sometimes use crypto to circumvent national laws, isolated outlaw states such as North Korea use it to circumvent international laws. South Korea South Korea’s relationship with crypto is largely comparable to that of other rich, developed nations. And in terms of popularity among traders and the general public, cryptocurrencies have done very well in the East Asian nation, with such crypto exchanges as Bithumb and Coinplug being launched as early as 2013. As an indication of how quickly the market has grown in South Korea, CryptoCompare recorded a 24-hour BTC trading volume of only 5.33 Bitcoins on Dec. 10, 2014 on such Korean exchanges as Bithumb. By contrast, Jan. 5, 2018 witnessed a 24-hour volume of 32,395. In other words, there is an extraordinarily healthy crypto market in South Korea, as indicated by the fact that as many as 31 percent of Korean employees reported investing…

Chinese Banking Giant Issues $1.3 Billion in Securities on a Blockchain

Chinese Banking Giant Issues $1.3 Billion in Securities on a Blockchain

Bank of Communications, one of the four state-owned commercial banks in China, has completed a major issuance of residential mortgage-backed securities (RMBSs) using a blockchain network. China Securities Times, the mouthpiece of Chinese financial regulators, reported on Thursday that the banking giant issued a total of 9.3 billion yuan (or around $1.3 billion) worth of RMBSs via its proprietary blockchain network, Jucai Chain. According to a document dated Sept. 27 that outlines details of the issuance, the Bank of Communications was the main issuer with China International Capital Corporation as lead underwriter and book runner for the offering. Other co-underwriters included the Industrial and Commercial Bank of China and China Merchants Bank. By moving the credit data of the mortgages onto a distributed network, different parties along the issuance process are able to view the most up-to-date information and conduct due diligence and settle transactions in a peer-to-peer fashion, the report said. A residential mortgage-backed security is typically made of a pool of mortgage loans owned by financial institutions, which group these loans into tranches depending on their risks and returns, and then sell to other investors. According to a report from Xinhua last month, the Bank of Communications first rolled out the Jucai Chain blockchain platform in June, specifically for asset-backed securities, in an effort to speed up the issuance process. After the initial launch, the bank started moving mortgage data of the securities batch onto the blockchain in July, the news source said. Other commercial banks in China have also recently announced various asset-backed security issuances via distributed networks. For instance, the Agricultural Bank of China, another state-owned institution, offered a loan worth $300,000 using a blockchain system in the country’s Guizhou province in July. And, in August, a privately held commercial bank in Zhejiang also settled blockchain-based transactions for a security offering based on corporate account receivables worth $66 million. Bank of Communications 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.