Winklevoss Capital: Investors Are ‘Thoughtfully Dipping their Toes into Crypto,’ Not Taking the Plunge

Winklevoss Capital: Investors Are ‘Thoughtfully Dipping their Toes into Crypto,’ Not Taking the Plunge

Sterling Witzke, partner at the Winklevoss twins’ family office Winklevoss Capital, says she doesn’t think 2019 will be the watershed year for institutional investors to get into crypto. Witzke backed her claim by arguing that expectations are running ahead of facts on the ground. Witzke made her remarks during an interview with Cointelegraph at the Crypto Finance Conference in St. Moritz, Switzerland, Jan. 17. She argued that the upshot of the 2017 crypto market bull run — when Bitcoin soared to all-time highs of $20,000 a coin — has been a skewed perception of what it takes for traditional capital to embrace innovation: “Because the end of 2017 was so crazy, people tend to think the space moves at lightning speed [..] At the level of underlying [tech] development it [often] does […] but I think it takes a while for institutions to get comfortable. There needs to be better custody, healthy debt and credit markets to get [them] really excited. So I don’t think 2019 will necessarily be the year.” Witzke added that while she’s seen many investors thoughtfully dip their toes into crypto, she hasn’t really seen any take the plunge. Two factors she isolated as important were a lack of regulatory clarity — especially in the United States — and concerns over security. As reported, the twins’ Gemini crypto exchange has recently launched an ad campaign which places a strong accent on solid regulation and compliance — encapsulated in slogans such as “crypto needs rules” and “crypto without chaos.” In light of some community opinions that this agenda runs counter to the original peer-to-peer ethos of crypto innovation, Witzke argued consumers in crypto deserve the same protections as traditional investors. “The distinction comes,” she said, “between the protocol layer and the companies and applications that are built on top of it. At the protocol level, it’s absolutely correct you don’t need more regulations or rules, because those are already built in.” A report issued last fall from “Big Four” auditor KPMG proposed that institutional investors are what is needed for the crypto industry to realize its potential as a full-fledged asset class — an opinion that is shared by many prominent voices within the crypto industry itself. Others have voiced concerns over…

ConsenSys Invests in Two Crypto Startups to Lead VCs Into Ethereum Ecosystem

ConsenSys Invests in Two Crypto Startups to Lead VCs Into Ethereum Ecosystem

Despite recent belt-tightening at Brooklyn-based ethereum venture studio ConsenSys, the company’s investment arm is ramping up outreach to independent startups. ConsensSys Ventures, headed by managing partner Kavita Gupta, announced two new investments on Thursday: $1 million in the Paris-based crypto wallet and trading platform Coinhouse and an undisclosed amount in the encryption-centric browser Tenta. Gupta told CoinDesk these companies distinguished themselves with teams that include bitcoin veterans serving established user-bases. According to Coinhouse, the platform has over 150,000 user accounts. Plus, the startup’s CEO, Nicolas Louvet, was an early investor in the hardware wallet startup Ledger. Ledger CEO Éric Larchevêque was a reciprocal investor in Coinhouse and both men now sit on the boards of each other’s respective companies. “A settlement custody solution [Ledger] working with the exchange [Coinhouse] … is very relevant to how at ConsenSys Ventures we think about investing,” Gupta told CoinDesk in an interview Thursday. As for Tenta, which features a built-in VPN, ad blocker and full data encryption, Crunchbase lists the browser as having at least 61,489 downloads. The ConsenSys-incubated wallet startup MetaMask is already in talks with Tenta regarding how the latter’s mobile browser could include built-in crypto wallets. “Our mission to make private and secure browsing fast and ubiquitous received a huge boost with ConsenSys support to expand to other platforms while continuing to innovate great new privacy features,” Tenta CEO Jesse Adams said in a statement. ConsenSys Ventures was launched in 2017 with $50 million to invest in startups that would complement those under the main ConsenSys umbrella, with a similar mission to help build the ethereum ecosystem. Since then, Gupta said her seven-person team at ConsenSys Ventures has distributed roughly $14.5 million across 14 projects, noting there are still a few more equity deals in the final stages of completion. Those deals involve early-stage projects that graduated from the inaugural cohort of the ConsenSys accelerator program Tachyon, which took place in San Francisco in 2018. Gupta said her fund will allow the teams to raise from outside venture firms and then match that valuation to buy 7 percent of the equity, as just one example of the type of deals in progress. As such, Gupta’s strategy is to bring as many traditional venture capitalists into ConsenSys’ orbit…

South Africa Wants to Mandate Registration of Crypto Service Providers

South Africa Wants to Mandate Registration of Crypto Service Providers

Regulation A regulatory working group in South Africa, which includes the country’s central bank, has released a consultation paper on crypto assets this week. According to the document, all exchanges, wallet providers, Bitcoin ATMs and payment processors will have to register with the government in 2019.  Also Read: Bitpay Reports Processing Over $1 Billion Transactions in 2018 Consultation Paper on Crypto Assets South Africa’s Financial Intelligence Centre (FIC), Financial Sector Conduct Authority (FSCA), National Treasury (NT), the South African Revenue Service (SARS), and the South African Reserve Bank (SARB) jointly released on Wednesday their consultation paper on crypto assets. The group was formed to review the state of cryptocurrency in the country under the Intergovernmental Fintech Working Group (IFWG) at the start of 2018. The paper includes background on the subject and provides the scope of the activities that have been assessed. It highlights the benefits and risks, as defined by the regulators, reviews the approaches taken by other jurisdictions, and presents recommendations for dealing with crypto assets from a local perspective. The South African public and impacted parties have been asked to provide comments on the document by Feb. 15, 2019, and the regulators promise that the input will help determine the way in which crypto assets will be regulated. Crypto Service Providers Will Have to Register The group recommends that crypto assets remain without legal tender status and not recognized as electronic money, but they won’t be banned for now. It proposes a regulatory framework to be developed in phases, starting with a registration process for crypto asset service providers. This could eventually lead to formal authorization as a licensed operator in South Africa. Registration will be required for all cryptocurrency trading platforms, vending machines (Bitcoin ATMs), wallet providers, custodial services and payment service providers. The paper also recommends that crypto asset service providers be required to comply with AML/CFT regulations under South Africa’s Financial Intelligence Centre Act. This means that the companies will have to conduct ongoing monitoring of their clients, keep records of their activities and file reports on suspicious and unusual transactions, including all cash transactions of 25,000 South African rand (around $1,900) and above. Details about the registration process will be published later and it is expected to be…

Cryptopia Alleged Hack: Police Are on the Case While Community Tracks Down Stolen Funds

Cryptopia Alleged Hack: Police Are on the Case While Community Tracks Down Stolen Funds

In what seems to be one of the first major security breaches of 2019, New Zealand-based digital assets exchange Cryptopia was allegedly hacked this week. The platform reported the incident via Twitter on Jan. 15, mentioning “significant losses.” While the incident has been confirmed by the local police, many crucial details — including the amount and titles of stolen tokens — remain undisclosed. Brief introduction to Cryptopia, an essential exchange for altcoins Cryptopia Limited, the company behind the self-titled exchange, was registered in July 2014, and the platform itself was launched later the same year. It is run by founders Rob Dawson and Adam Clark, who initially started it as a hobby born out of negative experiences with other crypto exchanges. Around January 2017, they allegedly quit their full-time jobs to focus solely on Cryptopia. The firm’s office is located in Christchurch, Canterbury, and there are around 50-100 people employed there. According to the New Zealand Government Companies Register, Cryptopia has a total of 90 shareholders. The majority of shares are controlled by Dawson and Clark, who hold 30.57 percent and 27.46 percent respectively. A substantial portion of the stock — 25.52 percent — is also held by a local software development and consultancy services called Intranel, while the rest of shares seem to be controlled by the co-founders’ relatives and private investors. As per Cryptopia’s LinkedIn profile, the company has “the world’s largest range of cryptocurrencies.” Indeed, the exchange has more than 830 cryptocurrencies listed, according to CoinMarketCap, which makes it one of the chief platforms for altcoin trading. The data obtained from Coingecko suggests that Cryptopia’s peak trading volume this year occurred on Jan. 11, when it reached around $1,875,000. The crypto exchange reportedly has around 1.4 million registered users and is the largest crypto exchange in the country. In May 2017, Cryptopia launched NZed (NZDT), allegedly the first stablecoin tethered to the New Zealand dollar. The incident was originally reported as “unscheduled maintenance”; the police are on the case The episode can be traced back to Jan. 14, when Cryptopia published a series of short tweets regarding “unscheduled maintenance.” Interestingly, the platform issued somewhat similar updates in June 2018, causing concern among users, who later reported withdrawal difficulties. Nevertheless, next day, on…

No Reason to ‘Bury’ Cryptocurrencies, Russian PM Medvedev Says

No Reason to ‘Bury’ Cryptocurrencies, Russian PM Medvedev Says

Economy & Regulation Last year’s falling prices are not a good enough reason to “bury” cryptocurrencies, Russian Prime Minister Dmitry Medvedev said during a high-level economic conference. He believes Russia should carefully follow the developments around digital coins.   Also read: Clickbait Media Uses Bitcoin and Russia to Pump Headlines Again Russia Should Watch Carefully Medvedev thinks the Russian Federation should watch the situation with cryptocurrencies, whose rates “showed extreme volatility” in an extremely bearish 2018. The value of some digital assets fell five-fold, the head of the Russian government noted during his appearance at the annual Gaidar economic forum. Quoted by Tass, he further elaborated: This, of course, is not a reason to bury them. As with any social phenomenon, any economic institute, there are both bright sides and dark sides. That’s why the Chairman of the Russian Council of Ministers says Russia should simply carefully follow what’s happening with cryptocurrencies. Digital financial assets, a term applied to cryptocurrencies in official Russian documents, remain unregulated in the country. However, Medvedev’s comments come just weeks before the lower house of the Russian parliament, the State Duma, is expected to review on second reading a package of draft laws aimed at establishing order in the crypto industry. Dmitry Medvedev, Prime Minister of RussiaThree bills were voted on first reading in the Duma in last May – “On Digital Financial Assets,” “On Attracting Investments Using Investment Platforms,” and “On Digital Rights.” Their final adoption was postponed multiple times but is now among the priorities for the spring session of the house. The drafts are part of a long list of bills designed to regulate different aspects of the digital economy. ‘Why Regulate What We Don’t Understand’ The Gaidar forum is an international event which is held at the Russian Presidential Academy of National Economy and Public Administration (Ranepa). Each year, it brings together economists, scientists, officials, political figures, and businessmen from around the world to discuss current trends in the socio-economic and political development of Russia. The country’s business environment and investment climate as well as the prospects for its integration in the global economy are some of the major topics of the conference. Herman Gref, CEO of SberbankRussia does not need excessive regulation in the digital…

Markets Update: Crypto Prices Drift Sideways While Traders Remain Uncertain

Markets Update: Crypto Prices Drift Sideways While Traders Remain Uncertain

Market Updates A lot has changed since our last markets update as digital asset prices have been consolidating after the cryptoconomy’s last big drop in value. The entire ecosystem’s market valuation has lost about $10 billion over the last week, but stronger global trade volumes have managed to keep values afloat at current prices as traders await the next big wave of movement. Also Read: Embracing Utility in 2019: Unreliable Crypto Networks Will Lose to Hyperbitcoinization A Strong Scent of Uncertainty In the Air Another week has passed in cryptocurrency land, during which most digital asset markets have been consolidating tightly into a downward triangular pattern. At the moment, the entire crypto economy of all 2,000+ assets is hovering at about $120 billion with around $15.6 billion worth of global trades. Currently, bitcoin core (BTC) prices are meandering just above $3,650 with a market capitalization of about $63.8 billion. BTC captures roughly $5.2 billion in trade volume but the asset is down 2.6% for the week. Top 10 cryptocurrency markets Jan. 17, 2019. The second largest market valuation belongs to ripple (XRP) this Thursday, as each coin is swapping for $0.32 per unit. This gives XRP a market cap of around $13.4 billion and the market’s 24-hour volume is about $418 million worth of global trades. Ethereum (ETH) is trading for $122 per coin on global spot markets with a $12.8 billion market valuation. The cryptocurrency is down 0.96% today and 6.4% for the week. Lastly, eos (EOS) is up 0.86% today as each coin is trading for $2.43 per unit. Eos has around $667 million worth of 24-hour trades and a market cap of about $2.2 billion. Bitcoin Cash (BCH) Market Action Bitcoin cash (BCH) is trading for $132 per coin and has a market cap of about $2.3 billion this Thursday. BCH is currently up a hair at 1.02% during the last 24 hours, but the currency is down 4% for the week. The top five exchanges trading the most bitcoin cash today are Coinsuper (BCH/BTC), Huobi (BCH/USDT), P2pb2b (BCH/ETH), Dragonx (BCH/USDT), and Fatbtc (BCH/CNY). The dominating currency paired with BCH today is ETH as it captures 44.9% of trades. This is followed by USDT (29%), BTC (15.4%), USD (5.9%), EUR (1.7%), and JPY…

Ethereum Co-Founder Joe Lubin Joins Board of Crypto Futures Platform ErisX

Ethereum Co-Founder Joe Lubin Joins Board of Crypto Futures Platform ErisX

Crypto trading startup ErisX is expanding its board of directors as it prepares to launch spot and derivatives markets for digital assets, including bitcoin and eventually ethereum. The company announced Thursday that Joseph Lubin, founder of the ethereum development studio ConsenSys, and Cris Conde, a technology entrepreneur, had joined the board. They will serve alongside DRW CEO Don Wilson, Valor Equity Partners managing partner Antonio Gracias and ErisX CEO Thomas Chippas. In a press release, ErisX cited Lubin’s experience working in the digital asset space and his familiarity with the ethereum network (he was part of the second-largest cryptocurrency’s founding team). The company initially plans to provide bitcoin futures products when it launches (though this launch may be delayed by the ongoing U.S. government shutdown), but plans to add support for ethereum and litecoin futures down the line. ErisX head of marketing Jessica Darmoni told CoinDesk via email that launching ether products remains a goal for the company, but declined to say if the company was planning to actively lobby for or announce an ether futures product in the near future. “As a general rule, we don’t comment on engagement with regulators while we are still in process with them,” she said., adding: “However, we can say that Mr. Lubin and his team bring extensive knowledge and background on Ethereum, the crypto space as well as the token space to ErisX.” ErisX CEO Thomas Chippas previously told CoinDesk that the company’s “interaction with the CFTC has been both positive and productive,” and that the firm was looking forward to resuming its work with the regulator on its derivatives clearing organization application. The board has been expanded from four seats to five. Lubin took the new seat; Conde, a former CEO of software giant Sungard, will replace former independent board member Cliff Lewis, who had been on the board since Feb. 2018. Joe Lubin at Consensus 2018, photo via CoinDesk archives

Crypto Payments Service BitPay Reports It Saw Over $1 Billion in Transactions in 2018

Crypto Payments Service BitPay Reports It Saw Over $1 Billion in Transactions in 2018

Major cryptocurrency payment service provider BitPay has reported $1 billion in transactions this past year, according to a press release Jan. 16. According to the report, the company also set a new record for itself in terms of transaction fee revenue. Among major new customers this past year, BitPay named Dish Networks, HackerOne, and the State of Ohio. BitPay also reported that its B2B business has grown by almost 255 percent from 2017. Despite a massive crypto decline in 2018, BitPay’s CEO and co-founder Stephen Pair argued that the firm saw growth over the year because its product is “cheaper and quicker than a bank wire from most regions of the world.” While BitPay is reportedly still focuses on Bitcoin (BTC), the service reports that it has also added settlement support for other cryptocurrencies, namely as Bitcoin Cash (BCH), and stablecoins USD Coin (USDC), the Gemini dollar (GUSD) and Paxos Standard (PAX). In April, BitPay secured $40 million in a Series B funding round that included major crypto and IT industry players such as Tencent co-founder Alvin Liu and Christopher Klauss Family Office, Founder of Internet Security Systems (ISS), a firm acquired by IBM in 2006. In late 2018, BitPay’s CEO claimed that he expects mass Bitcoin adoption to come in three to five years. In November, BitPay’s chief commercial officer, Sonny Singh, predicted that Bitcoin’s price will soar to between $15,000 to $20,000 by the end of 2019. Also in November, Cointelegraph reported on research from blockchain data firm Chainalysis stating that the use of Bitcoin for commercial payments has fallen significantly in 2018.

Coinbase Acquires Andreessen Horowitz–Backed Startup Blockspring

Coinbase Acquires Andreessen Horowitz–Backed Startup Blockspring

Blockspring, a startup that makes tools for collecting and managing data from APIs, has been acquired by Coinbase. “Joining Coinbase was a no-brainer for a number [of] reasons including its commitment to establishing an open financial system and the strength of its engineering team,” Blockspring announced on its blog this week. CoinDesk confirmed the acquisition with a Coinbase spokesperson, though the company declined to comment further. The San Francisco-based Blockspring makes it easy to pull data from various APIs into Excel and Google Sheets. The startup had been backed by Y Combinator and a $3.4 million funding round from Andreessen Horowitz (a16z) and SV Angel in 2015. Still with a16z at the time, Blockspring found an early advocate in current Coinbase CTO Balaji Srinivasan. “Blockspring turns a company’s business users into an army of engineers able to quickly and easily connect spreadsheets and other applications to web services without any coding experience,” said Srinivasan, according to Blockspring’s 2015 funding announcement. More recently, Blockspring had built an integration for Coinbase into its service. Excited to share that the @Blockspring team is joining Coinbase to help build out our developer tools. They’ve built an impressive platform that connects hundreds of different APIs and we’re excited for them to continue their work here at Coinbase! — Tim Wagner (@timallenwagner) January 16, 2019 According to the company’s acquisition announcement, “Blockspring will continue to operate as an independent company and our products will continue to operate for current and new customers.” No financial terms of the deal were disclosed. Coinbase raised a whopping $300 million in October 2018, and the Blockspring deal is Coinbase’s 11th acquisition, according to data from Crunchbase. Coinbase image via Shutterstock / OpturaDesign

American Companies Can Now Settle Payroll Taxes In Cryptocurrency via Bitwage

American Companies Can Now Settle Payroll Taxes In Cryptocurrency via Bitwage

Taxes International cryptocurrency payroll service provider Bitwage has announced that it has partnered with Texas-based Simply Efficient HR. The move will allow companies to pay W2 employee and payroll taxes in all 50 U.S. states, plus Puerto Rico, using BTC and ETH. Also Read: Bitpay Reports Processing Over $1 Billion Transactions in 2018 Bitwage and Simply Efficient Join Forces With Bitwage’s solution now out of beta, American employees are able to choose any percentage of their wage to be in USD or cryptocurrency. To participate, a company needs to sign up to Bitwage, reach out to support for Payroll & HR services to receive personalized account management from the Simply Efficient HR team, and then add the account on Bitwage. Simply Efficient HR invoices companies through Bitwage for USD needed to fund payroll taxes and employee payrolls and the company accepts invoice and fund payrolls in BTC or ETH. CEO of Bitwage Jonathan Chester commented: “As the leader in cryptocurrency payroll solutions, we are excited to continue to push the adoption of real use-cases within the industry. Together with Simplexity, we hope to close the financial loop within the cryptocurrency industry and continue to make bitcoin and other cryptocurrencies a part of everyday life.” Bridging the Gap to the Traditional Financial System The partnership has been live in beta mode since November, with its first customer the peer-to-peer exchange Paxful. “Bitwage bridges the gap between bitcoin and the traditional finance system,” Hayel Abbassi, Paxful Controller, said. “As a company that earns 100% of revenue in bitcoin, we are always looking for service providers who will accept digital currency. Paxful has a significantly sized team in the states and we need to pay them as employees on payroll, not as contractors. Bitwage has recently formed a partnership with a traditional payroll company who integrates into their platform to provide these services. Paxful simply sends bitcoin to an address, and our employees receive net checks with the proper federal and state taxes withheld.” W2 Tax FormAccording to the announcement, U.S. Bitwage clients are also able to pay for benefits such as health insurance, as well as HR compliance services. Companies around the world are able to use their crypto holdings to pay local vendors in the U.S., E.U.,…