Top Crypto News – 09/04/2018

Bitfinex Introduces Trading for 12 Altcoins Including Tether Competitor


Bitfinex Announces Trading Pairs for 12 New Altcoins

Bitfinex Introduces Trading for 12 Altcoins Including Tether CompetitorOn April 7th, Bitfinex announced via Medium the introduction of 12 new altcoins on its trading platform. All of the new tokens are ERC-20 tokens (the technical standard for smart contracts hosted on the Ethereum blockchain).

The newly supported altcoins are Aion (AION), Iostoken (IOST), Request Network (REQ), Raiden Network (RDN), Loopring (LRC) Bnktothefuture Token (BFT), (CFI), Wax (WAX), Singularitynet (AGI), Medicalchain (MTN), Odem (ODEM), and Dai (DAI).

BTC, ETH, and USD trading pairs for the newly supported altcoins went live at 4PM UTC on April 7th. Bitfinex’s announcement stated that “The newly introduced token listings have a combined market capitalization of $1.1B+ USD.” Margin trading and lending markets for the new tokens “will be enabled gradually, as sufficient liquidity develops.”

Notable Listings Include Dai and Bnktothefuture

Bitfinex Introduces Trading for 12 Altcoins Including Tether CompetitorThe newly listed ERC-20 tokens include Dai, “a digital, decentralized stablecoin built on Ethereum.” The listing of Dai is significant, as the project appears to be in direct competition with major stablecoin, Tether – which shares the same directors as Bitfinex. The exchange stated that “Dai will initially be made available against BTC, ETH, and USD whilst we explore the possibility adding additional DAI pairs.”

The listing of Bnktothefuture Token is also notable, as Bnktothefuture appears to own shares in Bitfinex. Bnktothefuture was also involved in the controversial conversion of BFX tokens into equity in Bitfinex following the devastating hack suffered by the exchange in 2016. On August 22nd, 2016, Bitifinex “formally signed a letter of intent with Bnktothefuture […] to provide solutions towards compensating customers with equity in Bitfinex.”

The Chief Executive Officer of Bitfinex, Jean-Louis van der Velde, stated “The introduction of such a large selection of tokens, representing a diverse array of blockchain-based projects, marks an exciting development for Bitfinex. We are proud to introduce these as we believe that each token serves to strengthen and enliven a unique aspect of the global blockchain ecosystem, and will offer new and exciting trading options for our users.”

Mr. Velde added “We are excited to be going the extra distance to accommodate the needs and expectations of our traders. Looking forward, we will continue to expand our service offerings to best address their needs, and to maintain an advanced and supportive trading platform for the growing digital asset community.”

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Swiss Regulations Are Driving ICOs Away


FINMA Guidelines Are Causing Concern

In February, reported how FINMA had published guidelines with the intention of “creating clarity for market participants”. Among the risks addressed by the 11-page document was the concern that money could be laundered through crowdsales. Under section 3.7 (Compliance with AMLA), the document states:

Anti-money laundering regulation gives rise to a range of due diligence requirements including the requirement to establish the identity of the beneficial owner and the obligation either to affiliate to a self-regulatory organisation (SRO) or to be subject directly to FINMA supervision. These requirements can be fulfilled by having the funds accepted via a financial intermediary who is already subject to the AMLA in Switzerland and who exercises on behalf of the organiser the corresponding due diligence requirements.

In plain English, this means that ICOs must use a Swiss company to perform KYC on all ICO participants, which is where the problems have started. With only a handful of companies in a position to perform such checks, these entities effectively hold a monopoly. The average cost for a KYC check ranges from between $0.6 to $2 within the ICO space – but Switzerland is an exception. Accredited bodies are charging up to $25 per check, leaving projects that have already made the decision to host their crowdsale in Switzerland in an awkward position.

Grain Counts the Cost of Following FINMA

Swiss Regulations Are Driving ICOs AwayGrain is an infrastructure solution seeking to host work agreements and contracts on the blockchain. In February, it announced that it would be postponing its ICO for a month to accord to the new guidelines FINMA has introduced, writing: “Although there is no ICO specific regulation or consistent legal doctrine, we’ve decided to “better be safe than sorry”. We want Grain to be a sustainable, long-term success story and avoid potential compliance issues that might disturb that trajectory.”

One consequence of electing to follow FINMA’s guidelines to the letter was that Grain had to raise its minimum crowdsale contribution, which had been set at 0.1 ETH, in order to cover the increased costs of Swiss KYC. Anywhere else in the world, a typical crowdsale can conduct KYC on all participants for around $30,000. In Switzerland, companies such as ICO Engine charge 5% of all ethereum raised, which means they stand to pocket $200,000 or more simply for administering basic verification.

Swiss Regulations Are Driving ICOs Away
Dorado’s KYC comprises nothing more than a checkbox

Because FINMA’s guidelines aren’t legally binding, there is an alternative option – disregard them altogether and don’t conduct any sort of due diligence. This is a strategy that’s fraught with risk, but which some projects have chosen to follow. While the likes of Grain has chosen to do things by the book, other Swiss-based ICOs such as Dorado have skipped KYC altogether. Investors need only a Facebook or Gmail ID to login and contribute funds in fiat or crypto. Dorado’s sole means of ensuring that investors aren’t from the U.S., for example, is a checkbox. So long as FINMA’s guidelines remain unbinding and unamended, they risk driving ethical ICOs away and allowing the more gung-ho projects to proliferate.

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The Anti-Petro? Zcash Is Throwing Venezuelans a Lifeline


Zooko Wilcox received his first plea for help from someone in Venezuela a few months ago.

The founder and CEO of the Zerocoin Electric Coin Company (ZECC) had been closely following what he describes as “a humanitarian crisis of the first order” unfolding in Venezuela when he got that first message, followed by a series of others.

“They said things like ‘Do you see what is happening?'” Wilcox told CoinDesk. “‘We need zcash here now.'”

The problem facing many of those citizens was that in addition to the alleged humanitarian violations, Venezuela’s monetary policy had hyperinflated its national currency, the bolivar, to near-worthlessness, and they were looking for a way to store value in the traditionally stable, but difficult to access, U.S. dollar.

The trick was converting the bolivars to dollars while protecting their identities.

While the government has stopped short of banning the dollar, the official exchange rate discourages legal ownership, and has led many Venezuelans to buy dollars on the black market and store them under the proverbial mattress.

Which is where zcash, the privacy-focused cryptocurrency Wilcox helped create, enters the picture.

In response to the flurry of requests for help, Wilcox last month partnered with AirTM, a Mexico-based peer-to-peer exchange, to promote zcash as an optional intermediate step when converting bolivars into U.S. dollars.

While adoption of zcash among AirTM’s 168,000 Venezuelan users has so far been slow, the partnership has only just begun. According to AirTM founder and CEO Ruben Galindo Steckel:

“We’re just helping zcash get access to the people who need it most. Not necessarily the people in the States who like privacy, but the people in Venezuela who have been oppressed.”

Seeking stability

Founded in 2015, AirTM is specifically designed to let users in hyperinflated economies such as Venezuela store value in historically stable U.S. dollars.

The company gives users a variety of ways to enter and exit the dollar. For instance, they can send money from a bank or PayPal account, drop off cash at a Moneygram location or zap some zcash (and nine other cryptocurrencies) to AirTM. The company then stores the money as USD in an account on the customer’s behalf.

Customers are then able to withdraw the funds, provided AirTM can find a buyer for the original currency. In exchange for the service, the company usually takes a 20 percent cut of the cashier’s commission. Users can also convert back into the local currency at the point of payment when shopping at a participating merchant.

No underground operation, AirTM, which last month conducted $5 million in transactions worldwide, is registered as a money services business by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). As such, the startup conducts know-your-customer (KYC) reviews to comply with anti-money-laundering (AML) regulations.

What made the partnership so attractive to Wilcox was that by the time it began last month, AirTM had already registered more than 168,000 Venezuelans living in the country and as many as 40,000 more living abroad and sending money home.

So significant is the Venezuelan population that those users now conduct about 60,000 transactions per month using AirTM, according to Josh Kliot, AirTM’s head of engagement and operations, or about 60 percent of its entire business.

In a related push, AirTM also partnered with four Venezuela-based non-governmental organizations as part of the newly launched AirTM Foundation, aiming to serve a wide range of humanitarian needs with donations through zcash and other supported payment methods.

To make it easier to connect to peers around the world willing to buy the rapidly deflating bolivars with zcash, the partnership between ZECC and AirTM further includes a marketing investment from both companies, promotion through their various communications channels, and the waiver of AirTM’s 20 percent cut throughout the duration of the partnership. (AirTM’s $0.30 transaction fee is still in place.)

In addition, ZECC is conducting a review of AirTM’s user experience and providing feedback about how to make the interaction more user-friendly to non-technical users. Wilcox described the review of AirTM’s interface for exchanging bitcoin, ethereum and other cryptos as “a community contribution about how we can make cryptocurrency more accessible.”

So far, only about 500 zcash users have conducted a total 1,000 transactions in Venezuela on AirTM since the March 8 launch. But Kliot said he expects that to change based on what the partners have learned from the process.

He told CoinDesk:

“The initial 30 days are for us to gauge how best to scale our marketing efforts. We expect a substantial increase in the following 2 months.”

The age of the petro

The team-up comes as the Venezuelan government is looking for ways around various sanctions by launching its own cryptocurrency, called the petro, which supposedly raised as much as $5 billion through a sale in February.

But according to Wilcox, Venezuelan citizens do not trust the petro any more than they trust the bolivar.

“Zcash is an open source decentralized system where the supply and behavior of the network are part of an open global consensus, whereas the petro is part of a construct and under the control of the Venezuelan government,” said Wilcox.

To be fair, zcash is not what many people would consider an ideal store of value either. Like nearly all cryptocurrencies, it fluctuates wildly against the dollar.

But zcash’s privacy features made it an appealing way to quickly move from rapidly depreciating bolivars into the more stable U.S. dollars held at AirTM.

“It’s legal for Venezuelans to hold USD,” Kliot wrote in an email. But “they may want to hide their ID,” to avoid being detected buying dollars “by an unofficial means – ie. exchanging bolivars for USD at the free-market rate vs. the government’s official (artificial) rate.”

Underscoring the direness of the situation in Venezuela, a trip to the grocery store can now cost far more than the minimum monthly salary, according to a local AirTM zcash user who spoke with CoinDesk via an encrypted messaging platform.

According to this source, a self-identified economist in his 40’s who spoke on condition of anonymity, some citizens have resorted to using cartons of eggs as a store of value.

The source sent CoinDesk a copy of a receipt from last month in which two kilograms of bananas, cookies, a half-kilogram of white cheese, 2 liters of orange juice and 2 liters of corn oil cost 1,981,000 bolivars, or about $39.00.

Given those high costs of living, zcash’s relatively low transaction fees make it a more appealing cryptocurrency to Venezuelans compared to bitcoin, the economist said.

“People use bitcoin for savings but not for daily purchases,” he said. “That is the opportunity for help on crypto with easy to use wallets and low fees.”

Sanctions evasion?

All this work is taking place against a complicated backdrop of regulations, sanctions and attempts by the regime of Venezuelan President Nicolas Maduro to evade them.

Earlier this month, President Donald Trump forbade anyone in the U.S. from buying or dealing with the “petro.”

But as long as zcash — or any support to Venezuela — doesn’t interact with the petro, with anyone on the U.S. Treasury Office of Foreign Assets Control’s sanction list, or with debts owed by Maduro’s government, the AirTM customer or foundation donor is safe.

That’s according to Michaela Frai, a research associate at the Foundation for Defense of Democracies in Washington, D.C., who specializes in Venezuela policy. But Frai cautioned that it’s the company’s responsibility to make sure those conditions are met.

“Any U.S. company which helps provide funds to Venezuelans, however, would still have the burden of ensuring the funding is not reaching Venezuelan officials,” she said. Further, “the anonymity of the transactions does raise compliance risks.”

According to AirTM founder Steckel, this is exactly where the company’s AML/KYC policy comes into play.

“We’re not touching or establishing a relationship with any Venezuela companies, banks, or the government,” he said. “We’re just working with the people.”

A bigger problem than U.S. regulations could be the Venezuelan government, which may not look kindly on this particular application of cryptocurrency.

When asked about the possibility of losing access to Venezuela, Steckel said:

“We are concerned, but that has been a concern for the last three years.”

AirTM exchange image via AirTM
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LA Dodgers Minor Leaguer Retires At 22 to Launch Cryptocurrency Hedge Fund for Athletes


Move over, Baby Boomers and Gen-Xers. Tyler Adkison, a cryptocurrency hedge fund CEO, says cryptocurrencies are the wave of the future that will be ushered in by Millennials.

Adkison, 22, recently retired as a minor league baseball player with the Los Angeles Dodgers to launch a crypto hedge fund focused exclusively on athletes. Despite skepticism from people around him because of the unstable nature of the virtual currency market, Tyler is excited about this new chapter of his life.

“This movement of cryptocurrency is a very Millennial-driven movement,” Adkison told the OC Register. “The developers are all Millennials or younger generations. They’re all tech-savvy. The people creating and driving this space are us. ”

While it may sound odd that a former aspiring baseball player gave up professional sports to jump head-long into cryptocurrencies, Adkison said he’s a tech geek who has been fascinated by bitcoin for years.

“I studied business at San Diego State and I’ve always had my eye on investing, things of that nature,” he said. “Technology has fascinated me as long as I could imagine. I was waiting in line for the release of the first iPad. I was in middle school. I sold candy to pay for it. I feel like cryptocurrency is the pinnacle of technological advancement.”

30 Clients, Including Red Sox Star

In his free time during baseball training, Adkison formed the cryptocurrency hedge fund BlockTerra Capital LLC.

Thanks to word-of-mouth buzz, Tyler already has investors and 30 clients who are pro baseball or football players. His first client was Joe Kelly, the 29-year-old pitcher for the Boston Red Sox.

While it may be easy to dismiss Tyler Adkison as another gullible, inexperienced entrepreneur, the fact is, many emerging leaders in the cryptocurrency ecosystem are Millennials just like him.

Take Ethereum co-founder Vitalek Buterin. At 24, Buterin’s net worth reportedly tops $400 million. And he’s just getting started. But beyond his staggering net worth is the influence Vitalek wields in the nascent crypto industry.

Chris Castiglione, an adjunct professor at Columbia University, says the younger generation are better suited to take the risks associated with a volatile industry like crypto.

“I think the crypto market is attractive to Millennials because it’s a space with both a lot of growth and risk,” Castiglione told Forbes. “People who are 40+ years of age are likely settled down with a career and family, and less inclined to get into such a quick-growth, volatile field. It’s been the same way with startup founders over the past two decades.”

‘No One Can Stop’ Crypto

While billionaires like Mark Cuban say bitcoin is worthless, former investment banking professionals like Dave Chapman says bitcoin is the undeniable wave of the future.

Chapman, who previously worked at Credit Suisse, Bear Stearns, and HSBC, is the co-founder of ANX, a blockchain solutions provider, and ANX Pro, a cryptocurrency exchange.

Dave says bitcoin is here to stay because “no one can stop crypto.” While most bitcoin investors obsess over its daily price fluctuations, he says BTC prices are the most boring thing about the budding virtual currency market.

“The price to me is probably the most uninteresting component about bitcoin,” Chapman said. “I’m more excited in the applications and more excited about what this means for people who don’t have access to financial inclusion. If we focus on the price, we’re losing track of the big picture.”

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