The Daily: Uber Meets Bitcoin, Basis Stablecoin Shuts Down

The Daily: Uber Meets Bitcoin, Basis Stablecoin Shuts Down

In Thursday’s installment of The Daily, we report on a highly anticipated stablecoin project that’s failed before it’s even launched, and explore the strangely centralized world of crypto Twitter. First though, we’ll start with the news that a third party app has made it possible to pay for your Uber ride using BTC.

Also read: Benchmark University Study Shines a Spotlight on Crypto Assets

Fold Brings Bitcoin to Uber

The Daily: Uber Meets Bitcoin, Basis Stablecoin Shuts DownFold, an app dedicated to making it easy to spend BTC in the real world, has added one of its biggest integrations yet. “We are excited to welcome Uber to Fold lineup,” explained the team in a blog post. “You can now use bitcoin to purchase your next Uber ride. Simply select the dollar amount, send your bitcoin, and then ride safely to your next event.” The app, which also enables BTC to be spent at stores such as Starbucks and Dunkin’ Donuts, works by converting cryptocurrency into a corresponding gift card balance within the Fold wallet that can then be redeemed by scanning a code in-store.

Developers Pull the Plug on Basis Stablecoin

It’s being reported that Basis, the largest stablecoin project to date based on early stage funding, has been sunsetted. The algorithmic stablecoin, which had been categorized in the same bracket as coins like dai, raised $133 million in venture funding from the likes of a16z, Bain, DCG, Metastable, Pantera Capital, Polychain, Lightspeed, and Google Ventures. The bulk of that funding is now believed to have been returned, with the Basis team reportedly having been spooked by regulatory concerns. While the technical skills of the Basis team have generally been praised within the crypto space, not everyone was convinced by the merits of their algorithmic stablecoin. Back in May, Messari Crypto’s Qiao Wang predicted that Basis would “fail catastrophically”.

The Daily: Uber Meets Bitcoin, Basis Stablecoin Shuts DownCommenting on the rumored shutdown of Basis, Three Arrows Capital CEO Su Zhu wrote “I hope the industry thinks more critically about what the shape of a good project is in this space. You can’t just cobble together ex-bigtech/bankers, raise [nine figures], and then pop the champagne. More importantly I hope LPs ask their VCs harder questions.” Stablecoin skeptic Preston Byrne was equally unimpressed, linking to a blog he had penned a year ago in which he called Basis “the worst idea in cryptocurrency.”

Bitcoin Cash and Ripple Dominate Crypto Twitter

Social sentiment service The Tie has been looking at what crypto Twitter’s had to say over the last few weeks. It’s plotted the change in sentiment for the top five cryptocurrencies, with a view to extrapolating actionable insights for the benefit of traders. The platform found bitcoin cash (BCH) and ripple (XRP) to be the most active Twitter communities over the past month, the former on account of the hard fork that got everyone talking, and the latter because the Ripple army is famed for its slavish devotion to its altcoin through good times and bad. How much of that discourse comes from unique accounts, however, is debatable.

The Daily: Uber Meets Bitcoin, Basis Stablecoin Shuts Down

“While accounting for only 3 percent of overall trading volume, XRP accounts for 8.97 percent of total conversational volume on Twitter. On average, 50 percent of daily tweets come from unique accounts, which means that much of the conversation is driven by the same accounts,” reported The Tie. The platform shared the above image with news.Bitcoin.com, which it claims “highlights how XRP has a centralized strong community.” Its acolytes might harp on about ripple’s “inherently decentralized” nature, but the coin’s community is as centralized as it gets.

What are your thoughts on today’s news tidbits as featured in The Daily? Let us know in the comments section below.


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P2P Markets Report: Latin American Markets Continue to Post Record Volume

This past week has seen Latin American peer-to-peer markets continue to set records for trade volume. For the week ending Dec. 8, Argentina and Venezuela posted a new record for Localbitcoins trade when measured in fiat, while Colombia, Peru, and Venezuela also posted records for trade measured in BTC.

Also Read: Zebpay Exchange Now Live in 21 European Countries

Fiat Volume Records Posted by Argentina and Venezuela

Argentina posted a new record for fiat P2P trade volume on Localbitcoins this past week, with over 9.4 million pesos worth of BTC changing hands. The week also saw a significant uptick in the number of BTC traded, with the 65 BTC comprising the most bitcoins traded in a single week since March 2017.

P2P Markets Report: Latin American Markets Continue to Post Record Volume
ARS/BTC Localbitcoins trade measured in ARS

Venezuela set a new record in fiat volume for the third consecutive week, with 3.2 billion Venezuelan bolivars’ worth of trade. The week of Dec. 8 also saw the third consecutive record for trade when measuring in BTC for Venezuela, with 1,636 BTC changing hands.

P2P Markets Report: Latin American Markets Continue to Post Record Volume
VES/BTC Localbitcoins trade measured in VES

BTC Records for Colombia and Peru

660 BTC were exchanged for Colombian pesos via Localbitcoins this past week, the most in the market’s history. The same week also comprised the fifth strongest when measuring in fiat currency, with 7.1 billion Colombian pesos’ worth of trade taking place.

P2P Markets Report: Latin American Markets Continue to Post Record Volume
COP/BTC Localbitcoins trade measured in BTC

Peru also posted a new record for the number of BTC traded on Localbitcoins in a single week, with 213 BTC exchanged. This comprised the eighth strongest on record when measuring in fiat, with roughly 2.68 million Peruvian sol of trade.

P2P Markets Report: Latin American Markets Continue to Post Record Volume
PEN/BTC Localbitcoins trade measured in BTC

Chile and Mexico Post Strong Volume

The week of Dec. 8 was the sixth strongest on record for Chilean P2P trade, with 196.4 million Chilean pesos’ worth of BTC changing hands. The week also comprised the fourth strongest on record when measuring in cryptocurrency, with 69 BTC traded.

P2P Markets Report: Latin American Markets Continue to Post Record Volume
CLP/BTC Localbitcoins trade measured in BTC

Mexico also saw a strong week for P2P trade, posting the 10th strongest week on record for trade between BTC and Mexican pesos. The week also comprised the strongest since May 2017 when measuring in BTC, with 99 BTC worth of trade occurring.

P2P Markets Report: Latin American Markets Continue to Post Record Volume
MXN/BTC Localbitcoins trade measured in MXN

Do you think recent Latin American volume records will continue to be broken in the coming weeks? Share your thoughts in the comments section below!


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Benchmark University Study Shines a Spotlight on Crypto Assets

Benchmark University Study Shines a Spotlight on Crypto Assets

Judge Business School, a subsidiary of the University of Cambridge, has published its second annual report into the cryptoconomy. Its inaugural report surfaced in April 2017, just as crypto mania was exploding. A lot has happened in the ecosystem since then, and the school’s new 96-page report covers a good portion of it, with a particular focus on cryptocurrency mining, exchanges, storage, and payments.

Also read: BTC Gets a Health Check in ‘The State of Bitcoin’

Crypto Sector Receives Its Second Report in a Week

Benchmark University Study Shines a Spotlight on Crypto AssetsWithin days of cryptocurrency enthusiasts being treated to a 59-page health check in “The State of Bitcoin,” a second weighty tome has hit their desks. Cambridge University’s “Global Cryptoasset Benchmarking Study” is as comprehensive as it sounds. Not only is the reference report packed with even more information than Delphi Digital’s effort, but it zeroes in on areas that the previous report skirted.

Judge Business School’s second crypto assets report draws a number of primary findings including:

  • Millions of new users have entered the ecosystem, but most remain passive.
  • The majority of mining facilities use some share of renewable energy sources as part of their energy mix.
  • Mining is less concentrated than commonly perceived.
Benchmark University Study Shines a Spotlight on Crypto Assets
The survey found that mobile wallets remain the most supported format but web wallet support has significantly increased.

Unpacking a Trove of Data

While the price of crypto assets has tumbled through most of 2018, user adoption has continued to grow for many leading digital currencies. The Cambridge report found that “Total user accounts at service providers [exchanges, etc.] now exceed 139 million with at least 35 million identity-verified users, the latter growing nearly 4x in 2017 and doubling again in the first three quarters of 2018.” The authors conclude, however, that only 38 percent of these users can be regarded as currently active. It is reasonable to assume that a significant portion of these individuals will reignite their interest in cryptocurrencies once the market recovers.

Another key finding from the report concerns the growth in industry employment. Despite having been published within days of various crypto projects including Consensys, Spankchain, and Steemit all downsizing, the report highlights the significant expansion of the cryptocurrency workforce since 2016. Back, then, the average cryptocurrency business had just five employees. Today that figure stands at 20. Other interesting findings from the university’s report include:

  • Two-thirds of specialized custodial exchanges do not have a refund procedure in the case of customer funds getting lost or stolen.
  • The amount of funds held in cold storage by crypto businesses surveyed stands at above 80 percent.
  • More than 80 percent of firms do not publicly share information about security audits, indicating a general unwillingness to divulge security-critical information.

Benchmark University Study Shines a Spotlight on Crypto AssetsThe very fact that Bitcoin and its supporting cryptocurrencies are now regularly inspiring high-level research initiated by august institutions speaks volumes of the progress that digital assets have made over the past 18 months. Britain’s second oldest university, Cambridge University was founded in 1209 and granted a Royal Charter by King Henry III two decades later. Cryptocurrency proponents will be hoping that Bitcoin goes on to have an equally long and distinguished history.

Do you think the quality of research into crypto assets is improving? Let us know in the comments section below.


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Zebpay Exchange Now Live in 21 European Countries

Zebpay Cryptocurrency Exchange Now Live in 21 European Countries

Zebpay, formerly one of India’s largest cryptocurrency exchanges, has launched in Europe. Euro deposits, withdrawals, and trading are now live in 21 countries. While the exchange is not accepting new registrations from India, existing users can continue to use its wallet app.

Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations

Zebpay Launches in 21 Countries

Zebpay Exchange Now Live in 21 European CountriesZebpay announced on Tuesday that its European exchange is now live. “We have recently expanded our global footprints in Europe with our exchange and wallet enabling crypto-to-crypto trading,” the company wrote, adding:

We are live with euro deposits/withdrawals and trading in 21 countries (Malta, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Netherlands, Poland, Portugal, Slovenia, Sweden, Austria) in Europe for users and corporate investors.

Zebpay Exchange Now Live in 21 European CountriesCustomers need to sign up for an account and go through Zebpay’s know-your-customer (KYC) procedures. “After successful KYC and bank verification,” customers can then deposit euros into their Zebpay euro wallets via bank deposits, the exchange detailed. They can also trade BTC against the euro on the Zebpay exchange and withdraw fiat from the wallets. “We will soon add more digital assets that can be traded with euro,” the company wrote.

For its European grand opening, Zebpay is offering zero-fee euro deposits as well as zero maker fees. Customers will also receive a reward of 0.25 percent per transaction. The offer is valid until Dec. 31 for supported euro and crypto-to-crypto trading pairs, currently BTC/EUR, ETH/BTC, LTC/BTC, XRP/BTC, BCH/BTC, EOS/BTC, and TRX/BTC.

Indians Cannot Register

Zebpay Exchange Now Live in 21 European CountriesIn September, Zebpay closed down its exchange service in India due to the banking ban by the Reserve Bank of India (RBI). At the time, the exchange claimed to have over 3 million users. Zebpay subsequently set up subsidiaries overseas. The company is registered in Malta under the name Awlencan Innovations Malta Ltd.

Another related entity is Zeb Ventures Pte. Ltd. Zebpay explained that this Singapore-registered company “is engaged in the service of providing a platform for the buying and selling of bitcoins and other cryptocurrencies through its mobile application known as Zebpay App, being listed on Android and iOS platforms.” The exchange’s website states:

We are not accepting new registrations from India.

The crypto banking ban in India is still in effect but the country’s supreme court is scheduled to hear all of the petitions against the ban in January 2019. Meanwhile, the crypto community is eagerly awaiting the recommendations submitted by the government panel headed by Subhash Chandra Garg, the country’s Economic Affairs Secretary.

What do you think of Zebpay launching an exchange in Europe and disallowing Indians to register? Let us know in the comments section below.


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Japanese Exchange Bitpoint Launches Trading Platform in Panama

On Wednesday Dec. 12, Japanese cryptocurrency exchange Bitpoint announced the launch of a crypto-to-fiat trading platform in Panama. The regulatory-compliant exchange will offer USD pairs with top cryptocurrencies like bitcoin cash, ethereum, bitcoin core, litecoin, and ripple.

Also read: BCH Devs Discuss Securing Instant Transactions With the Avalanche Protocol

Bitpoint Japan Expands to Latin America

Japanese Exchange Bitpoint Launches Trading Platform in PanamaBitpoint is a licensed cryptocurrency exchange operator headquartered in Tokyo that has just announced the company’s first international expansion in Latin America. It already operates trading platforms in five Asian countries and the latest exchange is called Bitpoint Panama. The Japanese firm has detailed that citizens of Panama as well as corporate entities within the region can use the exchange. Meanwhile, Bitpoint will utilize Panama ACH bank wires for fiat deposits and withdrawals for verified users.      

“We are proud to announce our market entry in Panama — The formalization of the crypto asset trading sector together with local authorities is a key milestone for its sustainable development,” explained Genki Oda, president of Bitpoint Japan during the announcement.

The senior executive added:  

In Panama we will employ our knowledge and standards to the satisfaction and tranquility of the local banking industry whom we regard as our partners.

Japanese Exchange Bitpoint Launches Trading Platform in Panama

Regional Regulations Will Be Respected

Bitpoint has detailed that verified users will be able to trade bitcoin core (BTC), ethereum (ETH), bitcoin cash (BCH), ripple (XRP) and litecoin (LTC) against the USD. Additionally, the Panama operation developed by Bitpoint promises “deep liquidity for speedy clearing.” The trading platform is AML/KYC compliant and users can register for a personal or a corporate account. Unlike most exchanges that use a Zendesk-like customer service platform, Bitpoint has a phone number available and customers can speak with agents directly.

Japanese Exchange Bitpoint Launches Trading Platform in Panama

Cryptocurrencies in Panama are still not fully regulated but Bitpoint emphasizes on its website that it is “a regulated company in Japan and operates by good practices under the same standards in Panama.” The Japanese firm further details that just like the other trading platforms under its wing, Bitpoint Panama will utilize multi-signature correspondence techniques and an “anti-hacking system that detects hackers and prevents hacks in real time.” Julian Geovo, operations director for Bitpoint Panama, has explained that the team plans to also bolster mainstream digital currency acceptance in the South American region.

“An interesting and safe option for cryptocurrency customers in Panama has been created — adopting the best operational practices from Bitpoint Japan allows us to offer a path for mainstream crypto education and adoption, whilst maintaining the tranquility of all stakeholders in the sector,” Geovo added.

What do you think about Bitpoint’s new exchange in Panama? Let us know what you think about this subject in the comments section below.


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Google Trends Reveals One of the Top Questions of 2018 — ‘What Is Bitcoin?’

Google Trends Data Reveals One of the Top Questions of 2018 — What Is Bitcoin?

Google has just published its annual Year in Search query statistics for 2018 and the biggest question of last year was “What is Bitcoin?” According to Google Trends, searches for the term “Bitcoin” have declined rapidly since 2017, but web users querying its definition led internet searches last year.

Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations

2018’s Most Asked Question of the Year What Is Bitcoin?

In 2017, one of the biggest terms searched on Google was “Bitcoin” as the price rose significantly throughout the whole year. However, following all-time highs, bitcoin prices declined exponentially in 2018, losing roughly 80 percent of the gains captured up until Dec. 17, 2017. With the price decline in 2018, interest in the technology also lost momentum, as reflected in waning “Bitcoin” Google searches. There was one cryptocurrency related query that topped Google’s Year in Search results for 2018 however and that was: “What is Bitcoin?”

Google Trends Reveals One of the Top Questions of 2018 — 'What Is Bitcoin?'
Top trending U.K. (left) and U.S. (right) “What is…?” queries in 2018.

In more populated regions like the U.K. and the U.S., people pondering the definition of Bitcoin has outpaced questions about the GDPR, Ibex, government shutdowns, upskirting, and the video game Fortnite. Asking what bitcoin is was questioned the most in Nigeria, Ghana, South Africa, Australia, and the U.S. People also asked what Ethereum is and searched for information on Bitcoin forks as well in the related queries section. Other related topics include the “stock market,” “exchange-traded funds (ETF),” and cryptocurrency “debit cards.”

Google Trends Reveals One of the Top Questions of 2018 — 'What Is Bitcoin?'
Where “What is Bitcoin?” was asked the most.

Cryptocurrency Apps Are Still Trending

Google Trends Reveals One of the Top Questions of 2018 — 'What Is Bitcoin?'
Squre’s bitcoin Cash App was the 17th most popular free app in 2018.

Search for “What is Bitcoin?”, at least in the U.S, and the browser provides a definition of the technology. “[Bitcoin] is a type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank,” explains the search engine. This definition is followed by a slew of Bitcoin-related Youtube video explainers, pictures of the digital currency’s symbol, and a wide variety of editorials that detail what Bitcoin actually is and what it means to certain authors.   

These days people love to see data that stems from Google trends and other large corporations like Apple. The California tech giant Apple recently released its 2018 top app store applications and a platform that supports bitcoin, called the Cash App, was the 17th most popular free iPhone application. This week, the Cash App, developed by Square, also surpassed top payment platforms like Paypal on Apple’s app store. The Coinbase application has been a top cryptocurrency app as well multiple times in 2018. Many cryptocurrency platforms are also still capturing the top trending apps on the Google Play store.

Google Trends Reveals One of the Top Questions of 2018 — 'What Is Bitcoin?'
A chart of the question’s queries over the last five years. “What is Bitcoin?” was the most popular Google “What is…” search in 2018.

Individuals Between 35-44 Have the Hardest Time Understanding Bitcoin

Google’s Year in Search statistics which highlighted Bitcoin evoke the audience intelligence report done by Pulsar back in March 2018. Over a certain period of time, Pulsar’s comprehensive study analyzed five million cryptocurrency mentions across popular social media channels. The underlying message within Pulsar’s survey indicated that mainstream audiences still are asking “What is bitcoin?” Furthermore, the research report says this question is asked by audiences of all age groups but people aged 35-44 have a particularly hard time understanding the technology.

So even though cryptocurrency markets have lost considerable value, the most popular 2018 search on Google pertaining to Bitcoin can at least give proponents confidence that the technology is still grasping the world’s attention.

What do you think about the question “What is Bitcoin?” topping Google’s 2018 Year in Search trends? Do you think this is a meaningful metric? Let us know what you think about this subject in the comments section below.


Images via Shutterstock, Google Browser, Google Trends, and Pixabay. 


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Report: Lightning Network Still Way off Being Ready for Commercial Use

The Lightning Network (LN) is a second-layer protocol that was long promised as a solution to BTC’s scalability problem. However, the off-chain system is still very far from being able to support actual commence according to a new review by business management technology company Scipio ERP.

Also Read: The Daily: CEX.io Enforces KYC, Okex Updates BCH Ticker

LN Is Incredibly Difficult to Use

Report: Lightning Network Still Way off Being Ready for Commercial UseThe report’s developers created a Lightning Add-on for Scipio ERP that provides businesses with the ability to use the system. They then tested the network in order to see if it was really ready for commerce. On the positive side, the tests confirmed that under best conditions payment confirmations were reached within 5-10 seconds. However, they also revealed many crucial flaws.

LN makes it very hard to implement clustering, meaning running several redundant servers simultaneously, which is a critical feature for online retailers. Implementing it, in particular in a dynamic cloud setup, would require a lot of workarounds, the developers explain.

The network has a bad user experience, in sharp contrast to that provided by most payment providers, who make the process of setting up and integrating as fast and painless as possible. The system is also incredibly difficult to use. The report lists over a dozen steps needed for merchants and close to 10 steps required of customers to make payments.

It is also a resource hog, requiring a Bitcoin node and a Lightning node installed on the same server as the business application. “All of which will require a lot of time to set up and configure. If one of the systems fails, your business application will not be able to handle cryptocurrency transactions. This is even more problematic, as redundancy cannot be easily achieved,” the developers lament.

Slower Than an Average Credit Card Payment

Report: Lightning Network Still Way off Being Ready for Commercial UseThe tests found that LN is still in a very early stage of development. “We have been operating the system for four months and crashes can and will happen all the time. Transaction channels can close or may not have enough peers at any time. There are no push notifications for these events, so you won’t know until a new transaction is placed and fails.”

Moreover, the network only allows small payments to be accepted due to limitations on the amount each channel can handle. And the process of opening a channel, needed once the limit on the previous one has been reached, makes it extremely difficult to automate for business applications.

As it stands, the Lightning Network is not useful for professional clustered environments, the developers insist. “Yes, Lightning does allow multiple nodes in its network, but at the same time it limits the number of systems that can connect to a Lightning node. And sure, payments are considerably faster than Bitcoin, but they are not ‘instant’. Even under best conditions, it still takes more time for transactions to be secured and processed than with your average credit card payment. In addition, Lightning is neither easy to set up, nor convenient to run.”

All of the above made the Scipio ERP developers conclude that LN payments are not yet suitable for business transactions.

Will the Lightning Network eventually help to scale BTC? Share your thoughts in the comments section below.


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Allianz Global Investors CEO Calls for Cryptocurrencies to Be Outlawed

The head of one of Europe’s largest asset managers, Allianz Global, has called for global regulators to “outlaw” crypto assets. The outburst from CEO Andreas Utermann came during a panel discussion in London. 

Also read: Netherlands to Regulate Cryptocurrencies in Bid to Curb Money Laundering

Cryptocurrencies Have “Wiped out People’s Savings”

Allianz Global Investors chief Andreas Utermann called for cryptocurrencies to be banned on Tuesday during a panel discussion. “You should outlaw it,” he is reported to have told regulators.

Allianz Global Investors CEO Calls for Cryptocurrencies to Be OutlawedUtermann, who previously worked at Merrill Lynch Investment Managers, went on to say that he was “personally surprised regulators haven’t stepped in harder” and that cryptocurrencies had wiped out people’s savings, Reuters reported. Sitting beside him at the panel discussion was Andrew Bailey, the head of the UK’s Financial Conduct Authority (FCA), who said his comments were “quite strong actually.” Bailey, who served as the Deputy Governor of the Bank of England from April 2013 to July 2016, then went on to add that cryptocurrencies have “no intrinsic value.”

He added that the authorities were keeping a close eye on initial coin offerings (ICOs). An October report revealed that hundreds of startups are being “secretly” targeted by the U.S. Securities and Exchange Commission for their involvement with initial coin offerings.

A More Crypto-Friendly Environment

Despite the condemnatory statement from Allianz Global’s CEO, the company’s chief economic adviser has previously said he believes cryptocurrencies are here to stay – and even admitted that he had opened a bitcoin trading account. He did add, however, that he was unsure whether they would ever replace fiat currency, saying:

“I think cryptocurrencies will exist, they will become more and more widespread, but they will be part of an ecosystem.

Utermann’s statement comes at a time when banks – and countries around the world – are becoming more crypto-friendly. Although multinational banks and mainstream financial services have traditionally been quick to slam cryptocurrencies, many now appear to be opening to the idea of them.

The Central Bank of the United Arab Emirates has said it will be working with Saudi Arabia for a cross-border digital currency – not long after consumers in Dubai were told they would be able to use digital currency to make payments for a number of different purposes.

Goldman Sachs, a leading multinational investment bank and financial services company, has had plans in the pipeline for some time now to open a derivative for bitcoin and a trading desk for cryptocurrencies. And Boerse Stuttgart Group, Germany’s second largest stock exchange, is due to launch a crypto trading venue next year.

What do you think of Utermann’s comments? Let us know in the comments section below.


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Former Mt. Gox CEO Could Face 10 Years in Jail Over Embezzlement

Former Mt. Gox CEO Faces 10 Years in Jail Over Embezzlement in Japan

Japanese prosecutors are seeking a 10-year jail term for Mark Karpeles, the former CEO of Mt. Gox. The embattled Frenchman, who has been previously accused of diverting company money for prostitutes, business acquisitions and luxury items, is facing charges of transferring $3 million of client funds to his own account for investment in a software development business.

Also read: Netherlands to Regulate Cryptocurrencies in Bid to Curb Money Laundering

Karpeles Pleads Innocence But Authorities Aren’t Buying It

According to prosecutors, Mark Karpeles falsified Mt. Gox’s trading system to make customer balances appear healthier than they in fact were. He also acted in violation of the country’s corporate law, Japanese daily The Mainichi reported on Dec. 12.

Former Mt. Gox CEO Could Face 10 Years in Jail Over Embezzlement

Karpeles has sworn his innocence and says the money, moved in the last four months of 2013, was meant to serve as only a temporary loan. He also argued, earlier in the trial, that the funds in question did not belong to clients but were his now-defunct company’s revenue.

However, prosecutors have argued there is no evidence that this diversion of funds was merely as a temporary loan. “There was no documentation of loans and there was no intention of paying back,” reads their submission at the Tokyo District Court. Karpeles, prosecutors argue, must be slapped with a harsh sentence for betraying the confidence of investors who trusted him with their money.

The Great Bitcoin Heist

Mt. Gox went from handling 70 percent of global bitcoin trades in 2013 to bankruptcy in 2014 after about $400 million was supposedly lost to hackers, with 200,000 bitcoins recovered two weeks later. The current lawsuit is not investigating the cause of this theft.

As the effects of the discrepancy became apparent, the exchange initially delayed withdrawals for up to three months before completely ceasing them altogether, ostensibly over the theft of bitcoins. The company entered bankruptcy proceedings in 2014 but has since undergone civil rehabilitation processes to enable it to pay bitcoin still owed to investors. It has yet to be determined how much users will be repaid, given the numerous fluctuations in bitcoin’s trading price since 2014.

Former Mt. Gox CEO Could Face 10 Years in Jail Over Embezzlement
Mark Karpeles

“I never imagined things would end this way and I am forever sorry for everything that’s taken place and all the effect it had on everyone involved,” Karpeles said earlier during the bankruptcy saga, although he has consistently maintained his innocence. In November, a Mt. Gox trustee sought to defer the deadline for filing civil rehabilitation claims, initially slated for October, until this month.

Regardless of how the matter plays out in Japan, Karpeles faces more legal trouble in the U.S. where former Mt. Gox clients filed a lawsuit against him several months ago. Karpeles’ lawyers want the lawsuit dismissed on the basis that a U.S. court has no jurisdiction over the matter.

What are your thoughts on the Mt. Gox case? Let us know in the comments section below.


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