Bitcoin adds $41 billion to market cap in 6 days as it hits all-time high of $7,998
Bitcoin hit a new record high Friday, coming within touching distance of the $8,000 handle.
The cryptocurrency was trading at $7,998.40 in the early hours, U.K. time, according to industry website CoinDesk. Bitcoin did pare some of those gains, however, falling as low as $7,535.85; it was trading around $7,750 by mid-morning.
It’s been a wild week for bitcoin, which sold off heavily last weekend, falling to around $5,500. Since Sunday, the cryptocurrency has risen from that low to Friday’s high, marking a 45 percent increase.
In that time, bitcoin’s market capitalization, or the total value of the digital coins in circulation, has risen from $92 billion to $133.5 billion, according to Coinmarketcap.com.
The price dip last weekend came after an upgrade to the bitcoin network, SegWit2x, which was planned for November 16, was called off. The aim was to increase the transaction speeds of SegWit2x, which has increasingly slowed down over the years. If the upgrade took place, it would have caused what is known as a “hard fork,” causing a new bitcoin spin-off to be formed.
Two previous forks have already happened earlier this year, leading to the creation of bitcoin cash and bitcoin gold.
But support for the Segwit2x upgrade waned, causing developers to call off its planned implementation.
This appeared to be the initial catalyst for the sell-off.
But on Friday, Coinbase, one of the world’s largest cryptocurrency exchanges, said there is still a possibility of a fork.
David Farmer, director of communications at Coinbase, said on a blog post that a “small number of miners may attempt to go forward with a fork.”
A miner is a key part of the bitcoin network. It is a person who runs a “node”, or a high-powered computer that is able to solve the complex mathematical equitation required to verify bitcoin transactions.
If a large number of miners upgrade the software on their nodes, it could cause a fork. Farmer warned that this small number of miners still supporting the Segwit2x proposal could cause a fork.
If a fork happens, holders of bitcoin will receive the newly-created cryptocurrency called “bitcoin2x” for free, essentially giving them free money. That is why bitcoin rallied Friday.
Coinbase said that it will disable the function of sending and receiving bitcoin at 2 a.m. PT on Friday on its platform, and halt buying and selling an hour before the fork, which is forecast between 6 a.m. and 8 a.m. PT.
All functionality will be re-enabled shortly after, Farmer said.
The Coinbase communications executive said that there are two scenarios that could occur. The first is that the new bitcoin2x network is unusable because there is not enough support, in which case Coinbase will not facilitate trading or withdrawals because “it will not be possible to move these assets.” Farmer said that this is the most likely outcome.
The second scenario is that the bitcoin2x network is usable because miner support is strong.
Bitcoin has had a rocky year but the price has continued to rise and is up around 700 percent. But many critics have thrown cold water on the rise of the cryptocurrency, with JPMorgan Chase CEO Jamie Dimoncalling it a “fraud”. Regulators in some countries have also cracked down on bitcoin trading, with China banning bitcoin exchanges.
Pre-Mined Initial Fork Offerings (IFOs) the New and Trendy Way to Fund Crypto Projects
First Bitcoin Cash, then Bitcoin Gold, now another Bitcoin hard fork, the Super Bitcoin (SBTC), is on the way. It plans to be forked at block 498888 and the original Bitcoin holders will be given one SBTC for one BTC for ”free.”
Also read: Bitcoin Cash Network Completes a Successful Hard Fork
SBTC Fork at Height 498888
According to its official website, SBTC will scale its block size to 8 megabytes featuring smart contracts and a lightning network.
Li Xiaolai, a Chinese bitcoin tycoon, is the man behind the project. Li is a controversial person in the Chinese community who initiated such ICO projects as EOS, ICO.info and PressOne this year. The PressOne project received 550 million dollars within three days without releasing a white paper, and was described as a typical “scam” by Chinese mainstream media.
When China ruled out ICOs this September, Li published a letter apologizing that he had overvalued his ability and regretted if he had somehow misled crypto newbies. After that, Li was safely “forgotten” by the community, until now.
Super Bitcoin, as it is premined, has once again put him in the spotlight. The project has 21,210,000 SBTC in total, out of which 210,000 are pre-mined.
Premined Coins Will Be Used for Early Development
Like Bitcoin Gold, the SBTC team explains that premined coins will be used for early development, but also for ”ecological construction”.
“I SUPPORT COMPETITION AMONG FORKED COINS, BUT I DON’T SUPPORT COINS WITH 210,000 PRE-MINE THAT ARE UNETHICAL AND UNFAIR,” COMMENTS BTC.TOP OWNER JIANG ZHUOER.
Jiang adds that it’s pointless to have another big block coin and he doesn’t see SBTC as a threat to Bitcoin Cash.
“I wonder if Li [will write] a white paper this time,” ridicules Jiang.
Another Two ”Initial Fork Offerings” On Their Way
An industrial player reveals that another two Chinese hard fork projects, Bitcoin Century and Bitcoin Diamond, are also on the way. He believes that this is an ICO in the disguise of a hard fork, or ”initial fork offering” as he claims.
“Initial fork offerings have become an innovative way to raise funds. But a premine is more like a scam instead of trying to make bitcoin great again,” says Jiang.
Will there be even more coins bearing the bitcoin name? Let us know in the comment section below!
Written by Bitcoin.com
Just the Beginning? What the Tezos Lawsuits Mean for ICO Litigation
While startups launching initial coin offerings (ICOs) may be all too aware they’re working in a legal gray area, that might not be enough to stop lawsuits that could test their legality.
At issue is that, although the U.S. agency tasked with enforcing securities law – the U.S. Securities and Exchange Commission (SEC) – has voiced concerns about cryptocurrency tokens (even labeling one a security), it has yet to announce much in the way of formal rules.
But while the SEC would have bearing on criminal lawsuits, courts hearing civil suits aren’t necessarily constrained or dictated by the SEC’s lack of a formal position on ICOs. Instead, these courts would make decisions based on their prior rulings and the specific circumstances of a case.
But what would that decision be? That question hinges on another: What makes an ICO a security or something else? Although attempts to interpret existing law have been made, it’s unclear even to those in the know.
Now, following the news that Tezos, one of the largest most visible startups yet to use the ICO funding mechanism, has been hit with two lawsuits, it seems lawyers and litigators are lining up to press the issue, potentially with the aim of a payday in mind.
Sara Hanks, CEO of CrowdCheck, a consultancy that assists entrepreneurs and investors with crowdfunding campaigns, told CoinDesk:
“We know of a number of plaintiffs’ lawyers around the country who are just basically collecting lists of ICOs and going ‘Hmm, I’m going to sue these people.'”
And the interest seems to be coming from lawyers working in similar sectors where a mix of lax regulation and bad actors have created the conditions for both suits and abuse.
Jaspar Ward, a partner at Louisville-based Jones Ward, which has filed class actions against fantasy sports services, sought to stress that he sees ICOs as an area of interest for precisely those factors.
“We see this as the next area where consumers could get harmed by some bad actors taking advantage of the lack of oversight or by pushing the envelope,” Ward said.
Casting a wide net
And according to some, Tezos is the prototypical defendant for such a lawsuit.
While the ideas underlying the project itself date back to the earliest days of blockchain (the white paper it’s based on has been in progress since 2014), the company has clear ties to the U.S. (which aids lawyers in the collectability of rewarded funds) and has attracted a significant number of buyers to its sale.
Dynamic Ledger Solutions, for instance, is a Delaware-based company that holds Tezos’ intellectual property and the source code for its yet-to-be-developed technology.
“The ICO most appealing to a plaintiff lawyer would be large in terms of total money raised, have a strong U.S. nexus, would have promoters and participants in the ICO who are U.S.-based, and the tokens that it would issue would reflect a claim on the share of the company’s future revenue,” explained Joel Fleming of Block & Leviton, adding succinctly:
“Tezos certainly checks a lot of those boxes.”
As chronicled by CoinDesk, the allegations against Tezos include both fraud and the sale of unregistered securities, though it’s the latter that may be most notable here.
The idea is that civil lawsuits from disgruntled token holders may force the SEC’s hand outlining an official stance on whether ICOs are indeed securities, which in turn, could have ramifications that extend far beyond just Tezos.
Setting the table
In this way, the case against Tezos could set important legal precedents, and in remarks, lawyers surveyed appeared to already be thinking about how to demonstrate that token offerings like those by Tezos could be deemed securities.
According to Jake Walker, also of Block & Leviton, which has launched an investigation of its own into Tezos, proving the sale of unregistered securities pursuant to the 1933 Securities Act is “much more of a ‘check the box’ litigation” than proving fraud.
He continued, “That kind of flaunting of securities laws is something that definitely stands out to the plaintiff’s bar and to us.”
While these lawsuits could spur other ICO issuers to rethink their token scheme’s structure to shield themselves from liability, Walker believes it may be too little, too late.
“Tezos is far from the only ICO that we see that has substantial U.S. involvement and U.S. entities that would clearly be participants in the sale of unregistered securities and be potentially liable,” he said.
Others appeared to agree that this issue could be settled in court, or that at least, the incentives are there for law firms to attack the issue.
David Silver, the partner at SilverMiller in South Florida who filed the second suit yesterday against Tezos, believes his case could serve as a springboard for future ICO litigation.
“This is a leak in a dam that is about to come falling down,” he told CoinDesk.
Not so fast
But, the attractiveness of Tezos as a target doesn’t mean a judgement against them will necessarily implicate other, similar projects.
“A Delaware company changes everything,” said Silver, stressing that, with distributed technologies, proving a tie to a location could prove key for litigators.
Further, because most plaintiffs’ lawyers work on a contingency basis, meaning that they are paid a percentage of the judgments they win on behalf of clients, they tend to shy away from cases where recovering funds awarded could be problematic – such as when companies are sheltered overseas.
Since there are more foreign-registered ICOs than U.S-based ones, lawyers might see the opportunity cost as too high and move on to other things.
“It gets significantly more complicated when they are overseas or foreign entities,” said Fleming. Plus, “in terms of collectability, it’s a bit more difficult given that most of the ICOs are raising their money not in fiat currency but in bitcoin or ether.”
And of course, a class action lawsuit against an ICO requires finding enough dissatisfied token holders who want to pursue legal recourse.
“At one point in time, I said into a camera that I planned on filing 30 (class actions against ICOs) in 30 days. I have since walked that statement back because finding ICOs to whom we can sue and collect has been harder than I anticipated.”
Law image via Shutterstock
Written by CoinDesk
China’s bitcoin crackdown has helped Japan embrace the cryptocurrency movement
A year ago, China accounted for 90 percent of all bitcoin trade. But since Beijing banned initial coin offerings (ICOs) and regulators started to crackdown on bitcoin exchanges in September, another Asian powerhouse has swooped in to embrace the crypto movement.
Japan recognized bitcoin as a legal form of payment earlier this year, and bitcoin trade in the country now accounts for about half the volume of global trade, compared with about a quarter in the U.S.
Now big retailers are joining the movement, as the cryptocurrency’s legalization has encouraged them to partner with bitcoin exchanges and begin accepting the digital currency as payment.
There’s already more than 4,500 stores in Japan that let you pay with bitcoin, and the Nikkei says that number could increase fivefold by the end of the year.
Mai Fujimoto, known as Miss Bitcoin in Japan, has become a type of “crypto evangelist,” blogging and tweeting about all things bitcoin.
She said that although regulations built trust in the currency, bitcoin won’t be replacing cash anytime soon, as it’s still considered an investment rather than an everyday currency in Japan.
“Many people have bought bitcoin now and maybe we need time to use bitcoin and learn about it,” she told CNBC.
But bitcoin’s popular rise in Japan hasn’t been without its problems.
Three years ago, the Japanese-based bitcoin exchange Mt. Gox collapsed and declared bankruptcy after hackers raided its accounts.
So now regulators are responding with stricter rules, requiring cryptocurrency exchange to maintain minimum capital reserves, separate customer accounts, and establish anti-money laundering practices.
For bar owner Mike Verweyst, who processes bitcoin payments every day in Japan, the new regulations don’t seem to be pushing people away from using the digital currency.
“It’s kind of surprising. Japan doesn’t really seem to be the first to adapt to new concepts like this. In fact they kind of shy away from change mostly,” he said.
“But maybe they’re going to grab it and run with it, I hope.”
Written by CNBC