Bithumb Wants User-Created DEXs With Its New Blockchain Ecosystem

Bithumb Wants User-Created DEXs With Its New Blockchain Ecosystem

South Korean crypto startup Bithumb is launching an “exchange-as-a-service” platform based on its new blockchain. Announced Wednesday, the exchange said Bithumb Chain will allow users and developers to build decentralized finance (DeFi) applications on the open source blockchain network, which it hopes will act as the backbone to a new financial ecosystem. The company is currently building out the network, with a testnet set to go live before the end of the year and a mainnet launch anticipated sometime next quarter. Javier Sim, co-founder and managing director of Bithumb Global, told CoinDesk that the new blockchain will feature a “revolutionary consensus model,” referring to what the press release described as an OBFT hybrid consensus mechanism. However, he declined to share further details. Bithumb representatives further told CoinDesk that the company is pursuing a patent around the mechanism, though the plan is to fully open-source the code prior to 2020. They did say that the consensus algorithm would utilize “verifiable random function,” likening it to Algorand’s protocol, and Byzantine Fault Tolerance. VRF is a system where a function verifies its own output publicly, while BFT refers to the Byzantine generals’ problem, in which one must reach consensus among disparate actors operating in a trustless environment. BFT ensures that the system will continue working – even if some of the actors are working against it. With Bithumb Chain, the company seeks to capitalize on their as-of-yet-unknown protocols with a variety of services, including exchange-as-a-service, which would allow users to set up their own decentralized exchange. Bithumb Chain could compete with other crypto exchanges’ custom chains, Sim said. Binance Chain, Binance’s own public blockchain, launched in April 2019, and is now home to its BNB token and Binance DEX, a decentralized exchange. Bithumb’s news comes days after The Korea Times reported that entertainment group IOK is moving to acquire a major stake in the exchange. IOK is looking to convert a bond in Bithumb’s largest shareholder, Vidante, by next year. Bithumb image via Shutterstock

Chinese Communist Party Reportedly Filling Roles at Top Exchange Huobi

Chinese Communist Party Reportedly Filling Roles at Top Exchange Huobi

A source has reported to news.Bitcoin.com that the Chinese government is attempting to directly manage the crypto exchange industry in the country. According to the source, this could lead to frozen assets for U.S. account holders and others. Notably, Huobi Global’s website has announced that U.S. accounts “have been gradually disabled” due to compliance issues, and that they “will freeze all US user accounts from 13 November 2019 (GMT+8) onwards.” The anonymous source maintains the motivations for the move go deeper than mere compliance with U.S. standards. Also Read: China Now Censors Anti-Blockchain Sentiment, Educates Public on Bitcoin Huobi Global Freezes Accounts As Huobi Global and Chinese crypto investment community Bishijie.com recently reported, U.S. accounts on the exchange will soon be frozen. The company had already begun disabling user capabilities prior to the notice. Traders have until November 13 to move their assets from the exchange, and the Huobi blog post details the protocol as well as how to sign up for the U.S.-compliant version, Huobi US. While the creation of and migration to U.S.-specific exchanges for compliance purposes is not unusual, a Hong Kong-based source and OTC trader informs news.Bitcoin.com that there is more to the story, and it is not only U.S.-based traders who should be concerned. Announcement on Bishijie.com of impending Huobi freeze.Government Management of the Crypto Industry The source most notably told news.Bitcoin.com that according to an insider, the Chinese Communist Party (CCP) is stepping into managerial positions at popular crypto exchange Huobi: It’s the fact. Already have CCP members take role as huobi management. A Volatile Backdrop As previously reported, the Chinese government also appears to now be censoring criticism of ”blockchain”. President Xi Jinping’s recent public promotion of the technology, coupled with a focus on development of the nation’s own central bank digital currency — known as the digital currency electronic payment (DCEP) system — adds further context to the Hong Kong trader’s reports. “Also president Xi announced China will put more resources into crypto space,” he noted. With the situation in Hong Kong volatile, fear among crypto traders is pronounced and some worry markets will be overtaken. According to the anonymous source, the CCP is moving to: Take every leading company in the [financial] industry. Alibaba. Tencent. The…

Ripple CEO: Only 1% of Today’s Cryptocurrencies Will Survive

Ripple CEO: Only 1% of Today’s Cryptocurrencies Will Survive

As many as 99% of all cryptocurrencies will likely go to zero, according to a new prediction by Ripple CEO Brad Garlinghouse. There are too many crypto projects, says Garlinghouse  In an interview with Bloomberg released Nov. 5, Garlinghouse claimed that there are too many cryptocurrencies so far, forecasting that only 1% of all crypto is here to stay.  That small number of crypto projects will be game-changing and grow significantly in the decades since they will be focused on solving real problems for real customers, Ripple CEO declared. Growth is caused by the hype around the market According to Garlinghouse, the growing number of digital assets is caused by the hype around the crypto ecosystem. Noting that there are more than 3,000 digital assets that trade on a daily basis to date, Ripple CEO hinted that very few will actually be able to meet customer needs, arguing that the vast majority of them “probably goes to zero.” He stated: “Anytime there is a new market, there are a lot of people that run into that market and try to show that they can solve a problem, they can deliver a customer need.” Criticizing SWIFT’s “transaction volatility” In the interview, Garlinghouse has also criticized the Society for Worldwide Interbank Financial Telecommunications’ (SWIFT) so-called “transaction volatility,” elaborating that such phenomenon means a “calculation of time and volatility.”  Citing a recent article posted by Ripple on XRP’s enhanced volatility exposure, Garlinghouse argued that the XRP token has “1/10th the volatility exposure of a typical fiat SWIFT payment.” In July 2019, SWIFT announced a successful trial of instant cross-border transfers in Asia, claiming that the instant payment pilot performed payments taking up to 25 seconds, with the fastest taking 13 seconds.  The tests involved interaction between SWIFT’s Global Payments Innovation instant payment platform and Singapore’s domestic instant payments solution FAST. As previously reported, SWIFT will allow distributed ledger technology firms to use its GPI platform.

Bitfinex Cancels $8M Kim Dotcom IEO Citing Regulatory ‘Clear Risks’

Bitfinex Cancels $8M Kim Dotcom IEO Citing Regulatory ‘Clear Risks’

Cryptocurrency exchange Bitfinex has abruptly canceled its token sale for K.im, Kim Dotcom’s Bitcoin (BTC) content sharing service. In a blog post on Nov. 5, executives said they had agreed not to go ahead with the sale, an initial exchange offering (IEO) which had a planned fundraising goal of $8 million.  Bitfinex: Risks have “become clear” The reason, they claimed, was the changing face of regulatory scrutiny over such tokens, which posed potential difficulties for both issuers and investors.  “Since we announced the debut of Kimcoin on the Bitfinex Token Sale platform, the regulatory environment has rapidly evolved. The risks associated with raising funds for the K.im token sale have become clear, and we must put our community’s best interest first and foremost,” it reads. Open-ended delay Correspondingly, the release of K.im tokens will be delayed by an unspecified amount of time. The post continues:  “After careful evaluation, we regret to announce that Bitfinex Token Sales and the K.im team have mutually agreed not to hold the token sale at this time. K.im will defer any decision on whether to create tokens on, or undertake a token issue in relation to the K.im platform until it is fully functional.” As Cointelegraph reported, the IEO was due to further the K.im project, which is Dotcom’s latest creation following MegaUpload 2. Last month, Dotcom revealed he was donating 10% of Bitcoin fees from the platform to Julian Assange, in order to support the latter’s ongoing legal battle.  Pressure on already-completed token sales remains in the United States in particular. Canadian messaging service Kik is currently embroiled in a legal battle with regulators over its 2017 initial coin offering, or ICO, which raised almost $100 million.

‘Party Starters’: Stellar Event Sees Frank Discussion of Crypto Market Makers

‘Party Starters’: Stellar Event Sees Frank Discussion of Crypto Market Makers

MEXICO CITY — If a startup hopes to release a token without embarrassing itself in the early days, there is one important thing it should do: hire a market maker. That was the message from a panel Monday at Stellar’s Meridian conference in Mexico City. “Market makers provide this initial step where you can start trading,” said Sergey Yusupov, the founder of Stellar infrastructure startup Apay. Thomas Scaria, a recent alum of payments firm Wyre and who’s now working on a stealth-mode ethereum startup, described market makers with a metaphor: “You want your cool friends to show up early to the party so it looks like something is happening,” he said, adding: “They are kinda the party starters.” Market making is widespread but generally discussed in hushed tones in the crypto space. When Blockstack disclosed in a filing with the U.S. Securities and Exchange Commission (SEC) last month that it contracted GSR Markets to provide liquidity for its STX token, it became one of the few startups to publicly acknowledge the practice. “Crypto matures towards transparent relationship with market makers,” Blockstack CEO Muneeb Ali said later on Twitter. Not to be confused with the fake volume industry, industry insiders say, market makers are a fixture in any mature financial market. They set up shop in very liquid markets, offering to always buy at a given price and sell at a slightly higher price. They make profits on that spread and aim for volumes that make the business worthwhile. While other buyers and sellers can also participate, market makers help to smooth out any gaps on either side of the order book. For a price In order to participate in a market, though, a market maker needs a large quantity of the asset for its sell side – and they are not going to take that risk on their own for a brand-new asset with no proven demand. That’s why Monday’s panelists argued startups should cover the cost of that risk. “Get your checkbook out,” Scaria said. Scott Freeman of market maker JST Capital said that when his firm takes on a new client, it actually likes to do some consulting before it gets started. “We really approach it as a partnership,” he said, explaining that it’s important that his team…

Hong Kong Regulator to Treat Some Crypto Exchanges Like Brokers

Hong Kong Regulator to Treat Some Crypto Exchanges Like Brokers

Hong Kong’s securities watchdog is to treat cryptocurrency trading platforms like traditional brokers if they offer security tokens, according to its second round of regulatory guidance for the industry. The Securities and Futures Commission (SFC) released its position paper on virtual asset exchanges Wednesday, announcing a new licensing scheme that it said is not dissimilar from the one applied to Hong Kong’s security brokers and automated trading venues. Any virtual asset firm trading at least one security token falls under the regulator’s purview. Applications for peer-to-peer (P2P) exchanges – such as decentralized exchanges (DEX) or non-custodial trade platforms – will not be reviewed by the SFC. Under the new licensing conditions, regulated crypto exchanges can only offer products to “professional investors” as defined by the SFC. Firms may also only alter products or services following approval by the regulator and must have an existing relationship with an independent auditing firm, filing annual reports on exchange activities. Exchanges must further file monthly reports to the commission. Hot wallets – crypto storage with live connections to the internet – may not hold more than 2 percent of an exchange’s total funds. While exchanges are mandated to have insurance for all assets in the event of a breach or hack, the SFC states. Anti-money laundering (AML) and know-your-customer (KYC) procedures are cited as a chief concern, with the SFC saying exchanges must take steps to “establish the true and full identity of each of its clients, and of each client’s financial situation, investment experience and investment objectives.” Upon the granting of a license, firms enter into the SFC Regulatory Sandbox which the regulator says brings more exacting reporting and monitoring standards. The regulator also issued a warning Wednesday to providers of cryptocurrency-based futures products targeting Hong Kong citizens without the proper paperwork. The SFC said it “has not licensed or authorised any person in Hong Kong to offer or trade virtual asset futures contracts” to date and remains “unlikely to grant a licence or authorisation to carry on a business in such contracts.” Crypto derivative providers like BitMEX and OKEx already restrict access to their products in Hong Kong. Passed in November 2018 and updated this October, the SFC’s first crypto licensing scheme, concerning funds that invest 10 percent or more…

190 Indian Bank Branches Raided in Massive Fraud Crackdown

190 Indian Bank Branches Raided in Massive Fraud Crackdown

India’s Central Bureau of Investigation has reportedly raided over 190 bank locations nationwide in an effort to crack down on fraud involving at least 15 banks. As many as 1,000 officers were involved in what is now one of the largest coordinated searches in India this year. Also read: State Bank of India Chief Says Crypto Regulation Is a Must Major Bank Fraud Crackdown The Indian Central Bureau of Investigation (CBI) carried out searches at over 190 bank locations nationwide on Tuesday, local media reported. An officer of the bureau said that the CBI has registered 42 new scam cases involving Rs 7,200 crore (~$1 billion). PTI reported that CBI’s teams knocked on doors of the accused to collect evidence and question them, elaborating: The operation was spread across 16 states and union territories with as many as 1,000 officers of the agency involved in it making it one of the largest coordinated searches this year. “Out of these 42 cases, there are 4 cases of more than Rs 1,000 crore and 11 cases of fraud amount of Rs 100 crore to Rs 1000 crore,” a statement issued by the CBI reveals. “During searches, incriminating documents have been recovered so far.” The statement further details that most of the loan fraud cases were detected at 15 banks, including the State Bank of India (SBI), the country’s largest government-owned lender. The other banks involved were Andhra Bank, Oriental Bank of Commerce, Indian Overseas Bank, Allahabad Bank, Canara Bank, Dena Bank, Punjab & Sind Bank, Punjab National Bank, Central Bank of India, Union Bank of India, IDBI Bank, Bank of Baroda, Bank of Maharashtra, and Bank of India, Business Today detailed. The searches were conducted throughout Tuesday, most of which were in Maharashtra where 58 bank locations were raided, followed by Punjab with 32 branches searched. Other searches were carried out in New Delhi, Tamil Nadu and Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Chandigarh, Kerala, Telangana and Dadra and Nagar Haveli, Gujarat and Haryana, Karnataka and Uttarakhand, and West Bengal. PMC Bank Fraud Case Continues A recent, widely-publicized fraud case involving one of the largest cooperative banks in the country is still ongoing. Punjab and Maharashtra Cooperative (PMC) Bank, with 137 branches in multiple states, was put…

EU Reaffirms Potential Move to Block Facebook’s Cryptocurrency

EU Reaffirms Potential Move to Block Facebook’s Cryptocurrency

The European Union is doubling down on its commitment to block the launch of Facebook’s Libra should it deem the project to present “unmanageable or excessive risks.” A draft document to be discussed at a meeting of E.U. finance ministers this Friday states that “all options should be on the table” — including impeding the stablecoin’s very development. The news was reported by EU policy site EurActiv on Nov. 6. Libra’s lack of clarity makes decision “impossible” The document is an initial text prepared by Finland, which currently holds the six-month rotating presidency of the E.U. Council.  Beyond emphasizing that preventing the project’s development remains a possible measure, the document states that Libra and similar initiatives “should not begin operation in the EU” until all challenges and risks have been identified and tackled. Currently, lack of clarity about Libra “makes it impossible to reach definitive conclusions on whether and how the existing EU regulatory framework applies,” it notes. This is notwithstanding the two questionnaires already presented by the European Commission to Facebook, which had aimed to gather more information about the project.  E.U. regulators and lawmakers must now act swiftly but should equally ensure that any new rules are based on “sound evidence” and “general principles” that would be applicable to all prospective global stablecoins, the document states. Libra and cryptocurrencies deemed “very dangerous” In an interview published today, Nov. 6, the president of Romania’s Fiscal Council, Daniel Daianu, characterized Libra as “very dangerous,” noting that such assets:  “are part of the logic of those who believe that there is a need for parallel markets, the disappearance of central banks […] The financial crisis ruined the reputation of governments and central banks, and some think we need other currencies, parallel circuits, non-hierarchical structures […] It is not by chance that libertarians are so attached to this vision.”  With its prospective billions of users, Libra “would almost inevitably fracture the monetary system,” he said, rendering central banks’ policies ineffective. Beyond cryptocurrencies and stablecoins, which must be “very strictly regulated,” Daianu went further, declaring that harsher macro-prudential measures will be necessary if central banks are to successfully implement their policies: “I am for a very severe regulation of capital markets, of what is called the shadow banking…

3 Reasons Why One Trader Didn’t ‘Manipulate’ Bitcoin Price to $20K

3 Reasons Why One Trader Didn’t ‘Manipulate’ Bitcoin Price to $20K

Bitcoin (BTC) price highs in 2017 were not the result of a single trader on an exchange, the CEO of payment company Circle claims. In a series of tweets on Nov. 4, Jeremy Allaire disputed recent research which claimed Bitcoin’s bull run to $20,000 was the result of efforts by a single wallet holder.  Circle CEO: Research fails to understand exchanges The findings are currently featuring as part of the $1.4 trillion lawsuit against stablecoin Tether (USDT). Its issuance, researchers argue, coincided with Bitcoin price jumps.  For Allaire, however, the idea that one Tether trader engaged in manipulation on an exchange had no logic. “Exchanges use omni-bus wallets that pool all customer balances and transactions on and off the exchange. So an analysis that shows that ‘a single wallet’ was involved in flows from Bitfinex to other exchanges is meaningless. All it shows is that traders were trading,” he summarized. Others, meanwhile, including Cointelegraph contributors, followed Allaire in disagreeing with the conclusion that entire markets were swayed by a single wallet. “Wake up call; every market is ‘manipulated’. Everybody tweeting something about the price of a certain asset is ‘manipulating’ the market. Doesn’t mean you can’t make money,” trader Michaël van de Poppe summarized in a Twitter post on Monday. Bruce Fenton, former executive director of the Bitcoin Foundation, criticized the technical proficiency of the data. “The entire premise seems to misunderstand how markets and stablecoins work,” he responded, calling the research “bad science.” More Tether does not mean higher BTC price The dispute comes as curious movements in Bitcoin price continue. As Cointelegraph reported, several recent jumps have sparked speculation, including one which induced the second-biggest daily gains in Bitcoin’s history.  In December 2017, Tether’s market cap was around $1 billion. But while Bitcoin’s price is now 50% lower, Tether’s market cap has increased four times over to current levels of $4.1 billion. Therefore, the issuance of new USDT thus does not directly correspond to BTC/USD staying higher. Focus on China “breaking” exchanges A further theory about the 2017 activity centers on China. According to Elaine Ou, a Bloomberg contributor formerly with Bitcoin mobile wallet app Abra, exchanges were unprepared for the consequences of Beijing’s ban on crypto trading.  Citing research from crypto industry…

North Korea Set Up a Blockchain Firm to Launder Cash: UN

North Korea Set Up a Blockchain Firm to Launder Cash: UN

North Korea has been using a Hong Kong-based blockchain company to launder money, according to a quarterly report from the UN Security Council’s Sanctions Committee on North Korea. As reported by South Korean newspaper Chosun, North Korea employed a shipping and logistics firm called Marine China, which runs on a blockchain platform, to avoid international sanctions by laundering stolen cryptocurrency. The report claims a man named Julian Kim, under the alias Tony Walker, was the sole owner and investor in the firm, and had attempted to withdraw money from banks in Singapore on several occasions. As per Chosun, the UN claims the laundering scheme, which also involved another undisclosed individual linked to the firm, circulated the stolen crypto through upwards of 5,000 transactions in multiple countries to obfuscate its source. The report further states that North Korea has developed precision “spear-phishing” attacks. Over the past three years, a previous UN report said, 17 countries have been targeted by its hacking experts resulting in over $2 billion in losses – a figure that regime has denied. Chosun adds that the report also notes the development of malicious code used to move stolen bitcoin to a server located at Pyongyang’s Kim Il-sung University. Severe sanctions against North Korea from the UN and other international bodies have pushed the country’s regime towards cryptocurrencies over time. This September, Vice reported the country is developing its own cryptocurrency with properties similar to bitcoin to sidestep international sanctions. North Korea image via Shutterstock