Goldman Sachs Will Launch a Bitcoin Trading Desk
Goldman Sachs will launch a bitcoin trading desk, the investment banking giant confirmed on Wednesday.
The New York Times reports that the firm, one of the largest financial institutions in the United States, is preparing to begin using its own funds to sponsor a variety of investment contracts tied to the bitcoin price and hopes to eventually trade “physical bitcoins” directly.
The bank has been rumored to have been planning to set up a cryptocurrency trading desk since last December, but executives and spokespeople claimed that those reports were false. Indeed, as recently as April 23 — when the bank hired cryptocurrency trader Justin Schmidt — the bank claimed that it had “not reached a conclusion on the scope of our digital asset offering.”
However, the bank has now confirmed that it will begin offering its clients a type of futures contract called a non-deliverable forward that will be linked to bitcoin — an asset which Goldman CEO Lloyd Blankfein called a “vehicle to perpetrate fraud” last November.
Rana Yared, a Goldman executive who saw the creation of the bitcoin trading desk, told the publication that most of the people involved with the operation remain skeptical of cryptocurrency.
“I would not describe myself as a true believer who wakes up thinking Bitcoin will take over the world,” she said. “For almost every person involved, there has been personal skepticism brought to the table.”
Nevertheless, the bank received enough interest from hedge funds, endowments, and other institutional investors that its board of directors voted to approve the move that will see it become the first major US bank to use its own funds to trade cryptocurrencies or cryptocurrency derivatives.
“It resonates with us when a client says, ‘I want to hold Bitcoin or Bitcoin futures because I think it is an alternate store of value,’” Yared said.
Eventually, the bank hopes to receive regulatory approval from the Federal Reserve and state-level authorities to begin trading actual bitcoins — ironically referred to as “physical bitcoins” — a development that will undoubtedly cement the flagship cryptocurrency’s status as a mainstream financial asset.
“It is not a new risk that we don’t understand,” Yared said of trading bitcoin. “It is just a heightened risk that we need to be extra aware of here.”
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Written by CCN.com
Bitcoin Is Not Used by Organized Crime Syndicates Says Hong Kong Government
No Evidence of Money Laundering
The government of Hong Kong has published on Monday its 2018 Money Laundering and Terrorist Financing (ML/TF) Risk Assessment Report. The paper examines threats and vulnerabilities facing the city with regards to the recommendation of the Financial Action Task Force (FATF), the inter-governmental body that sets international standards on combating ML and TF.
Addressing the issue of bitcoin, the report reveals that Hong Kong Police Force monitoring indicates no apparent sign of organized crime or ML/TF concerning the trading of cryptocurrencies. Moreover investigations and intelligence do not suggest cryptocurrencies were used or intended to be used in other prevalent predicate offenses (e.g. drugs, dutiable goods smuggling) or terrorist financing. “The threat level is low.” The government did find, however, that cryptocurrencies have been used as a pretext in Ponzi schemes or as payments for cyber criminals, mostly blackmailers using ransomware.
Not a Threat to Free Economies
Interestingly, the report also explains why the use of bitcoin should not be seen as a threat to governments that don’t try to limit the financial freedom’s of citizens. “Hong Kong is one of the world’s freest economies with a vibrant foreign currency exchange market and no capital controls.” Cryptocurrencies “are therefore not as attractive as in economies where people may try to circumvent currency controls or seek refuge from a high inflation rate.”
The approach of the Hong Kong government regarding fraud, as evident by the report, is that it’s enough to warn the public to stay vigilant when dealing with cryptocurrency investment offers and take action only against actual crime. And unlike other governments in the region, Hong Kong sees no need to create regulations to limit the legitimate use of bitcoin. It considers the current legal and regulatory provisions relating to fraud and other crimes to be wide enough to catch offenses, whether involving cryptocurrencies or not.
Written by Bitcoin.com
This Ethereum Developer Wants to Let You Pay Gas Fees with Tokens
Bhaskar Sharma, writing in Medium, has proposed a case for a more user-friendly token in ethereum that will support the adoption of decentralized applications (DApps) by allowing users to pay transactions fees using tokens rather than ether.
Fees in the ethereum blockchain — which are needed to pay miners for placing transactions into blocks and securing the blockchain — create friction for new users, Sharma noted. Users have to recognize how Ethereum works to understand the gas price and cost. They also need to acquire the necessary ether to pay for both of these.
Such fees create unnecessary hurdles for adopting DApps with internal tokens, reducing their ability to build out a large user base even as they attract significant mainstream attention. If the process could be abstracted so users could use the DApp without being about the underlying ethereum network, these hurdles would be removed.
ERC865 addresses these issues and offer a better user experience for ERC20 token transfers.
The ERC865 standard proposes a system to abstract the gas and offer the ability for token holders to pay the transaction fee for “token transfer” in tokens rather than gas, all in a single transaction.
The process introduces a third party willing to assume the transfer fee in tokens and forward the transaction with the fee in ether. Such a process can be secured with cryptographic signatures, as detailed in this blog.
Finally, Sharma suggests a mechanism should exist to invalidate a transaction. He thinks there should also be a time-bound optional condition in the transaction so that it becomes invalid following a specified time period. This way, the transaction is revoked automatically after the time out, and it provides a cancellation mechanism without sending an explicit invalidating transaction.
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Written by CCN.com
The Most Controversial Bitcoin Forks Yet Are Coming
New Forks Fuel a Furore
Rhett Creighton has always been a polarizing figure, but his latest stunt has united a swathe of the cryptocurrency community in condemnation. EOS’ Dan Larimer is synonymous with jumping from project to project, but his flitting looks like a lifetime of faithful service compared to Rhett’s itchy feet. Having announced a dual fork of bitcoin and zclassic last December, which inflated the price of ZCL and enriched Rhett and his cronies no end, he’s now following suit with bitcoin and primecoin to create Bitcoin Prime.
Meanwhile, a separate project is doing another fork of zclassic and bitcoin to create Anonymous Bitcoin which aims to “become the new standard for truly private banking”. This means that zlassic will now have forked twice with bitcoin to create a pair of zk-SNARK-based privacy coins – three times if you include zencash, which was also born from a ZCL fork. Zen, to its credit, has since gone on to forge its own community and to differentiate itself from its parent coin. Bitcoin Private, on the other hand, has done little more than infuriate ZCL bagholders, many of whom lost money on the deal. ZCL has now died and been reborn more times than anyone can count, and is currently up 242% in a month.
A Prime Way to Pump a Dead Coin
Primecoin was trading at 80 cents until Rhett Creighton bought a bunch, announced his plan to fork it, abandoned the Bitcoin Private project, and pressed ahead with his latest money-maker. Many of Rhett’s claims have stuck in the craw of the cryptocurrency community, who recognize a snake oil salesman when they see one. Some figures, including bitcoin developer Jimmy Song, believe that BTC forks are little more than altcoins or airdrops and don’t deserve to be categorized under the bitcoin banner.
Regardless of their status, the approach that developers such as Rhett Creighton have taken to merrily forking coins has come in for censure. He’s played heavily, for example, on the fact that Vitalik Buterin once considered building ethereum on top of primecoin, as if this somehow legitimizes the creation of Bitcoin Prime. With primecoin up 350% since the fork was announced, those who got in early – like Rhett Creighton – will profit handsomely whatever happens. At least Rhett is able to see the lighter side of the furore he’s caused, tweeting the following:
A Wild Bitcoin Fork Appears
Another bitcoin fork emerged this week, turning up in the unlikeliest of places – Bitfinex. Most major exchanges have given bitcoin forks short shrift ever since bitcoin gold and bitcoin diamond but for unknown reasons, Bitfinex has decided to support Bitcoin Interest (BCI). The coin forked from bitcoin back in January, and Bitfinex intends to issue BCI later this month before launching trading. The utility provided by BCI remains to be seen, whose defining feature is the provision of interest to holders who stake their tokens. Whatever its fate, Bitcoin Interest wasn’t born out of a shameless pump of an existing coin, and for that reason alone should prove less controversial than the likes of Bitcoin Prime.