A recent study by blockchain-oriented research firm Clovr found that cryptocurrency coverage in the mainstream media spikes when the market drops off. The analysis tracked the correlation between coverage on crypto values over the past five years and the sentiments of published materials.
In the course of its research, Clovr surveyed 48 mainstream U.S.-based and international media outlets for pieces covering cryptocurrency from Jan.1, 2013, to July 31, 2018. All articles were analyzed using sentiment analysis tool Valence Aware Dictionary and sEntiment Reasoner (VADER) and the Natural Language Toolkit (NLTK) library in Python. The analysis included the full text of 7,527 online news articles.
In the last weeks of 2017 crypto coverage in the media spiked following a sharp drop-off in cryptocurrency, which was attributed to a confluence of factors such as strong performance of altcoins, and Bitcoin (BTC) holders selling off their coins to pay for holiday purchases. The same trend was reported in May and June 2018, when a further drop in crypto values was followed by a temporary increase in articles. The study further reads:
“As recently as 2016, positive articles far exceeded negative ones, both in terms of volume and intensity. As coverage surged in mid-2017, however, articles expressing negative sentiment grew more common. This trend was fueled in part to grim prognostications by the likes of Warren Buffett and Mark Cuban, who guessed that ‘a bubble’ was underway.”
As for news sites that covered digital currency most often, Clovr notes Forbes and Business Insider, where “a combined 1,335 articles from these two outlets alone were more positive than the overall median sentiment of the sampled articles, while only 413 of their articles fell on the negative side.”
CNBC released almost 1,000 crypto-related articles during the analysed period, with 52.9 percent being positive and 47 percent being negative. At the same time, American far-right news website Breitbart News along with left leaning American news organization Raw Story cumulatively published 91 negative articles and just one positive piece. The average sentiment of Reuters, USA Today, and Gizmodo articles reportedly decreased substantially over time.
As previously reported, BTC use for commercial payments reduced significantly this year, according to a study by Chainalysis. Although Chainalysis recognizes a growing stability of BTC, the value of Bitcoin payments reportedly slumped from $427 million last December to $96 million in September 2018.
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Taiwan-based tech giant Asus is now letting gamers use the number crunching power of their graphics cards to earn a share of profits from cryptocurrency mining.
The company announced Thursday that it has partnered with mining app provider Quantumcloud to allow gamers to earn “passive income” by allowing access to their Asus graphics cards (or GPUs) when not being used for other PC tasks. Earnings will be paid out via PayPal or WeChat.
The app uses gamers’ GPUs to collectively power cloud-based miners to – in theory, at least – generate profit, giving card owners a percentage based on the amount of power provided, Quantumcloud’s website says.
The privacy of customers’ financial data on the app is protected under General Data Protection Regulation (GDPR), Asus stressed.
“As part of its pledge to protect user data, Quantumcloud launched with GDPR compliance in place and does not require customers to create a unique login. Instead, customers use their existing PayPal or WeChat account to log in and collect their earnings,” the firm said.
Quantumcloud, however, does not guarantee that users of its software will make a profit. “Earning rates may change based on the performance of the cryptocurrency market and cannot be guaranteed or influenced in any way by Quantumcloud,” according to the announcement.
More commonly, crypto miners use their GPUs to mine cryptos individually or collectively in pools, using dedicated software downloaded onto their PCs. Some cryptocurrencies like bitcoin, however, can’t effectively be mined with GPUs, requiring dedicated processors called ASICs to mine due to the high levels of difficulty.
Crypto miners are going through tough times currently, though, with prices low and mining difficulty high. Hundreds of thousands are estimated to have left the industry in recent weeks. And just yesterday, China-based mining giant Canaan Creative temporarily slashed prices of its all crypto mining devices to $200 each.
Demand for GPUs from crypto miners has also dropped in recent months. In August, U.S.-based chip maker Nvidia issued a financial report indicating a “substantial decline” in sales, largely due to a drop-off in miner demand.
Asus store image via Shutterstock
Liechtenstein cryptocurrency exchange LCX has been granted a license to provide crypto trading services for utility and payment tokens. The exchange will be offering four main crypto services including a custody service and a fiat-to-crypto exchange in partnership with Binance.
Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations
A Regulated Exchange
LCX announced on Tuesday that it has been granted “a business license of the Liechtenstein Ministry of Economic Affairs to conduct its business in Liechtenstein (Gewerbebewilligung).”
An LCX representative told news.Bitcoin.com:
With this license, we got the permission from the regulator to provide crypto exchange trading services for utility and payment tokens. So, we can offer an exchange to investors, to safely trade utility and payment coins (stable coins for example), that is approved by the regulator.
The representative added that LCX can now offer “services that other crypto exchanges offer … in a regulatory compliant manner.” As a regulated exchange, LCX says that it will apply the “highest technology standards for KYC [know-your-customer] and AML [anti-money laundering] to safeguard fulfillment of all regulatory requirements for AML and KYC.”
The Liechtenstein Blockchain Act defines three different types of tokens: utility, payment, and security.
“We also want to offer security token trading to our clients,” he emphasized, noting that LCX has increased its nominal capital from 100,000 CHF (~$100,400) to 1,000,000 CHF in order to apply for additional licenses, such as the Financial Market Authority (Fma) license, to be able to trade security tokens and offer other regulated services.
The company plans to offer four key products. One is a trading platform for security tokens and other cryptoassets. The second is a crypto custody service called LCX Vault.
The third is called LCX Terminal which integrates the APIs of major exchanges — such as Binance, Bittrex, Coinbase, Poloniex, and LCX’s own exchange — into a single trading desk. This product recently entered the closed-beta phase. The company described it as “a trading desk for crypto assets equipped with portfolio management, analytics platform, auto trading functionality and audit reporting — [an] integration of major exchanges.”
The fourth is a fiat-to-crypto exchange unveiled in August in partnership with Binance. This exchange will offer the trading of Swiss francs and euros against major cryptocurrencies.
The LCX representative explained to news.Bitcoin.com:
The moment we decide we’re ready to integrate our exchange into the terminal we can go public with this product … All other products are in development and will be announced and made public in the near future.
Furthermore, he noted that LCX’s exchange services “can be offered in a global manner,” adding that “we will be setting new standards in terms of KYC and AML, which every client of LCX should pass.”
What do you think of LCX’s plans to provide crypto-related services? Let us know in the comments section below.
Images courtesy of Shutterstock and LCX.
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Cryptocurrency hardware wallet Ledger Nano S is now compatible with Monero’s GUI 0.13 release.
ConsenSys Labs, an Ethereum incubator owned by ConsenSys has led a $2.1 million seed investment into AZTEC, a London-based protocol developer, according to its press release sent to CoinJournal.
AZTEC is an Ethereum mainnet-hosted protocol that helps to facilitate private transactions on the public blockchain.
Founded by Dr. Zachary Williamson and Tom Pocock, AZTEC claims to execute contracts on the Ethereum blockchain while retaining bank-level privacy for its users. By doing this, AZTEC ensure that privacy in transactions is ensured, while also reducing the possibility or any counterparty risks.
Other investors who participated in the round included Entrepreneur First, Samos Investments, Jeffrey Tarrant (Mov37) and Charlie Songhurst.
Joe Lubin, co-developer of Ethereum and founder of ConsenSys, stated:
“ConsenSys is proud to support this breakthrough from AZTEC and CreditMint, bringing zk-SNARKs-based privacy, confidentiality, and scalability to a wide variety of asset transactions on public Ethereum.”
Going further to praise the Ethereum blockchain for its flexibility to accommodate a broad spectrum of digital assets, he added that “AZTEC takes this to the next level with an important new protocol that Ethereum developers can configure for a variety of use cases.”
For financial institutions, the ability to transact on the blockchain in a “private and frictionless manner” is too good an opportunity to pass by.
One of AZTEC’s first commercial user is CreditMint, a blockchain based platform for trading and settling debt instruments.
Based on the release, CreditMint is quite popular with banks and other asset managers who use the platform due to the absence of counterparty credit risk, privacy and faster settlement times. AZTEC’s protocol will also leverage the blockchain technology to support any financial transactions from ERC-20 tokens to traditional financial assets.
Tom Pocock, AZTEC Founder, in an interview with CoinJournal called the investment a “breakthrough.”
“This breakthrough zero knowledge technology represents the first general-purpose transaction to have been fully implemented and released on Ethereum’s public blockchain. It is not theoretical – it is running on mainnet today. This, at last, gives the capital markets access to Ethereum’s public blockchain, without giving up privacy. Strong consensus and strong privacy guarantees will no longer be mutually exclusive.”
Certain smart contacts that underpin AZTEC’s private transactions have now been released at AztecProtocol.com under a copyright. Going forward, these transactions would be released under a license of permission to develop AZTEC into an open-source, decentralized exchange platform.
A new bulletin from Russian internet security company Kaspersky Labs published Nov. 28 states that crypto mining malware became increasingly popular among botnets in 2018.
Stealth crypto mining attacks – also know as cryptojacking – work by installing malware that uses a computer’s processing power to mine for cryptocurrencies without the owner’s consent or knowledge.
According to Kaspersky, after the crypto market bull run subsided in Jan.-Feb. 2018, interest in cryptojacking also briefly tapered off – yet it has nonetheless remained a consistent and current threat throughout the year.
Number of unique users attacked by miners in Q1–Q3 2018
Among botnets in particular, during the Q1 2018 cryptojacking “boom,” the share of cryptojacking malware downloaded by botnets, out of total files, hit 4.6 percent – as compared with 2.9 percent in Q2 2017. The bulletin extrapolates that botnets are therefore becoming increasingly viewed as a means of spreading crypto mining malware, with cybercriminals increasingly viewing cryptojacking as more favorable than other attack vectors.
Kaspersky thus found that Q3 2018 saw a decline in the number of DDoS attacks from botnets, arguing “the most likely reason being […] the ‘reprofiling’ of botnets from DDoS attacks to cryptocurrency mining”:
“[I]f executed properly, [cryptojacking] can be impossible for the owner of an infected machine to detect […] the reprofiling of existing server capacity completely hides its owner from the eyes of the law. Evidence suggests that the owners of many well-known botnets have switched their attack vector toward mining. For example, the DDoS activity of the Yoyo botnet dropped dramatically, although there is no data about it being dismantled.”
Other factors in the rise of cryptojacking are the low “entry threshold” for cybercriminals; web browser based code, such as Coinhive, is one option, and there are also a range of “ready-to-use affiliate programs, open mining pools, and miner builders” at attackers’ disposal.
The report notes that “time will tell” what the impact of the November crypto market crash will be on the prevalence of cryptojacking infections.
In mid November, cybersecurity research team McAfee Labs uncovered new Russia-made mining malware, which uses consumer devices to mine Monero (XMR), running almost without a trace.
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Nasdaq — the world’s second-largest stock exchange — plans to roll out bitcoin futures in the first quarter of 2019 through a partnership with investment management firm VanEck.
Gabor Gurbacs, VanEck’s director of digital asset strategy, said the companies will launch a variety of bitcoin derivatives in early-2019, including a “regulated crypto 2.0 futures-type contract.”
Gurbacs made the announcement during the Consensus: Invest conference in New York on November 27, CNBC reported.
‘Transparent and Regulated’
In a follow-up tweet, Gurbacs said Nasdaq and VanEck will unveil “transparent, regulated and surveilled digital asset products, such as bitcoin futures contracts.”
Nasdaq has been working with the Commodity Futures Trading Commission (CFTC) to make sure it fully complies with any lingering regulatory concerns the country’s main swaps regulator has.
Gurbacs confirmed that VanEck also “ran a few extra miles working with the CFTC to bring about new standards for custody and surveillance.”
@Nasdaq and VanEck’s @MVISIndices announces #index #partnership and intention to bring to market transparent, regulated and surveilled #DigitalAssets products, such as #Bitcoin futures contracts. More info to come. Share & follow us. #crypto #futures #SMARTS #ConsensusInvest pic.twitter.com/Q2oCZx4pp1
— Gabor Gurbacs (@gaborgurbacs) November 27, 2018
The CFTC, which regulates bitcoin as a commodity, has so far approved just two crypto futures products: one from the Chicago Mercantile Exchange (CME), and another from the Chicago Board Options Exchange (CBOE)
ICE Will Launch Bitcoin Futures In Q1
Meanwhile, Nasdaq’s rival ICE (Intercontinental Exchange) — the parent company of the New York Stock Exchange — is also charging ahead with its own plans to launch a physically-settled bitcoin futures product in the first quarter of 2019.
Bakkt, a cryptocurrency exchange built by ICE, plans to roll out its bitcoin futures market on January 24, after scrapping the original launch date of Dec. 12, 2018.
As CCN reported, ICE cited an unforeseen increase in demand for its futures product, the Bakkt Bitcoin (USD) Daily Futures Contract, for the delay.
VanEck: SEC Will Approve Bitcoin ETF Soon
Separately, VanEck is still trying to win approval from the Securities and Exchange Commission to launch the first-ever bitcoin ETF.
In August 2018, the SEC rejected nine bitcoin ETF applications, dashing the hopes of crypto evangelists like the Winklevoss twins, who have repeatedly failed to win SEC approval.
In its order rejecting the latest round of bitcoin ETFs, the SEC said the applicants failed to demonstrate how they could prevent fraud and market manipulation.
Despite the recent SEC rejections, VanEck’s Gabor Gurbacs said he believes SEC approval is around the corner, as CCN reported.
“We are the closest that we can be,” Gurbacs told Fox Business. “It is very clear to me that America wants a bitcoin ETF and we are here to build it.”
Despite the recent market slump, Gurbacs is supremely confident about the long-term future of the crypto industry. “I say bitcoin is digital gold, and we should not dismiss a potential opportunity for the next financial system,” he said.
Featured Image from Shutterstock
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The tea leaves were swirling Tuesday after Jay Clayton, chairman of the U.S. Securities and Exchange Commission, dropped some hints about what regulators in the United States will (and won’t) do in the crypto space in the coming months and years.
Clayton gave a fireside chat in front of a packed room at CoinDesk’s Consensus: Invest event in Manhattan yesterday afternoon.
And while Clayton made it clear that he has given cryptocurrency a lot of thought over the last year, there was still plenty to read between the lines, including his thoughts on the exchange ecosystem and the question of when ICO-derived tokens count as securities.
Following the on-stage conversation, three longtime experts in crypto law dissected the nuances of what Clayton said during a taping of CoinDesk Live (which you can watch below). We were joined by Caitlin Long, of the Wyoming Blockchain Coalition; Stephen Palley, of law firm Anderson Kill; and Lewis Cohen, of DLx Law.
While this panel of experts touched on a range of issues, there were some major takeaways to glean from Clayton’s talk. Here’s what they said:
1. No bitcoin ETF any time soon
Perhaps first and foremost, it doesn’t seem like that the SEC will greenlight a bitcoin exchange-traded fund anytime soon.
“I know there are a lot of folks who would love to have the ETF approved but I don’t think that’s very likely,” Long said.
She pointed to third-party custody of crypto assets and market manipulation as two stated stumbling blocks for an exchange-traded fund.
On custody, Long critiqued the rule itself, saying: “I think there’s a real question as to whether a custodian is needed if all the assets are actually sitting on a blockchain.”
2. Regulated exchanges are needed
Clayton made it very clear that he did not trust existing crypto exchanges to prevent price manipulation.
The panel noted that Clayton seemed to hint that some kind of move to get bitcoin onto a regulated exchange may be underway, with panelists pointing to remarks made earlier in the day by New York Stock Exchange Chairman Jeff Sprecher.
But Cohen argued that bitcoin is a “wild beast” and regulators may not appreciate how hard it could be to tame.
3. The rise of “CorpoCoin”
To further tame crypto, Clayton also made it clear that anti-money laundering protections had to be put in place for crypto trading.
Palley wondered what the implications of that push might hold for the body of retail investors that are active in the market today.
“My question is this,” said Palley. “There’s a lot of institutional money here. If you regulate it and you have market surveillance, will retail interest remain the same?”
Borrowing a term she credited to Andreas Antonopoulos, Long described that future as one for “CorpoCoin,” adding:
“What’s going to happen if this becomes too corporatized, is the crypto community will just fork off.”
4. ICO-funded startups should go see the SEC, ASAP
Repeating a theme Clayton stressed in his talk, Cohen argued it would behoove crypto startups that raised money in 2017 and early 2018 to go to the regulators now.
Paraphrasing Clayton, Cohen said: “Those that come see us may get one deal, those we come find may get another.”
Earlier this month the SEC issued its first civil penalties to two startups that did not properly register their securities offerings.
With those “templates” in hand, Palley said, the SEC might be getting ready to move much faster on ICOs.
5. No action on “no-action” letters
One of Clayton’s messages from the stage was that the SEC’s doors are open to startups working in the industry, particularly those that are issuing their own tokens. To this end, the agency recently launched a new fintech-focused division with the explicit goal of fostering communication with ICO startups.
The panel agreed that what startups in this space want is so-called “no-action” letters (letters in which the SEC confirms that it will not move against a company based on its business model).
The letters have long been expected, but no startups have received one yet, according to Long.
“If that’s what [Clayton] really wants, for people to come get no-action letters, the U.S. is already behind and we’re gonna fall even further behind,” she said.
6. Courts may see ICOs differently
While regulators are already on it, there’s another frontier for determining the validity of new funding mechanisms for blockchain startups.
As Palley asked: “What are courts going to do when they start parsing through token sales?” In fact, it’s already starting to happen.
Maybe in 10 years – or perhaps even less – Palley said, the U.S. Supreme Court may take a look.
Broadly speaking, Clayton argued from the stage that the SEC is happy to help crypto startups in the U.S. find a way to get in compliance with the law, but our panel of regulatory experts said that, in practice, this turns out to be much more difficult (and costly) than the chairman made it sound.
Click the link below to watch the full CoinDesk LIVE panel:
— CoinDesk (@coindesk) November 27, 2018
Photo by Noelle Acheson
The chairman of the U.S. Securities and Exchange Commission (SEC) has outlined the key changes in cryptocurrency markets he needs to see before he is comfortable with a bitcoin ETF. While some solutions to the problems he mentioned have already been implemented, the chairman insists on seeing more improvements.
Also read: Indian Supreme Court Moves Crypto Hearing, Community Calls for Positive Regulations
Key Upgrades Needed
At the Consensus Invest conference on Tuesday, SEC Chairman Jay Clayton explained what he needs to see before the SEC can consider approving its first bitcoin exchange-traded fund (ETF).
According to Cnbc, Clayton said he “needs to see key upgrades in cryptocurrency markets before approving a bitcoin ETF.” Specifically, the SEC chair “wants to see better market surveillance and custody for cryptocurrencies before being ‘comfortable’ with a bitcoin ETF,” the news outlet added.
Better Market Surveillance
The first issue Clayton noted was the lack of market surveillance at crypto exchanges. Market surveillance involves the use of systems that “monitor, prevent and investigate abusive and manipulative activity on the exchanges,” the publication described.
The chairman explained that stock exchanges such as the New York Stock Exchange and the Nasdaq already have these monitoring tools in place. However, “Those kinds of safeguards do not exist currently in all of the exchange venues where digital currencies trade,” he affirmed, asserting:
What investors expect is that trading in the commodity that underlies that ETF makes sense and is free from the risk of manipulation … It’s an issue that needs to be addressed before I would be comfortable.
Not all crypto exchanges lack market surveillance, however. In April, Nasdaq announced that crypto exchange Gemini “will be leveraging Nasdaq’s Smarts Market Surveillance technology to monitor its marketplace.” Nasdaq claims that its technology “is considered the most widely deployed surveillance system in the world.”
This agreement followed the SEC’s rejection of the rule change proposed by Bats BZX to list and trade Coin ETF. The commission cited Bats BZX’s lack of “surveillance-sharing agreements with significant markets for trading” bitcoin or its derivatives as one of the reasons.
On Tuesday, Europe’s largest crypto exchange by trading volume, Bitstamp, announced that it is implementing a monitoring platform provided by market surveillance provider Irisium.
Clayton is also concerned with how safely crypto assets are stored, emphasizing that investors could be exposed to a risk of theft in ETFs’ underlying assets. A number of custody solutions have been explored by companies such as Fidelity Investments, Coinbase, Gemini, Bitgo, Itbit, Japanese bank Nomura, Goldman Sachs, Northern Trust and South Korea’s Shinhan bank.
Nonetheless, the publication quoted Clayton as saying that custody solutions still “need to be improved and hardened.” The chairman elaborated:
We’ve seen some thefts around digital assets that make you scratch your head … We care that the assets underlying that ETF have good custody and that they’re not going to disappear.
What do you think of the SEC chairman’s stance toward bitcoin ETFs? Let us know in the comments section below.
Images courtesy of Shutterstock and the SEC.
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