Maitland/AMO ICO Monitor – 13 March 2019
The Big Read
In a sign that asset managers are increasingly showing interest in the cryptocurrency industry, Invesco is launching the Elwood Global Blockchain ETF, an exchange traded fund that will target companies with the potential to generate earnings from blockchain. The Financial Times writes that the ETF started trading on the London Stock Exchange on Monday, and invests in companies including Apple, Intel, and Advanced Micro Devices. While the fund will initially invest in a portfolio of 48 companies, Bin Ren, CEO of Elwood, is confident that the possible applications for blockchain extends far beyond just cryptocurrencies.
Despite facing rigorous criticism when introduced, Venezuela’s most outspoken economist believes that the country’s adoption of cryptocurrencies could play a significant role in its economic rebuilding. CoinDesk reports that Professor Aaron Olmos’ has claimed that the country is currently using a devalued Bolivar as an official currency, even though there are useful alternatives, naming cryptocurrency as ‘good money’. Mr Olmos believes that crypto is the solution to Venezuela’s woes, claiming that the country is in need of “an alternative element of trust”.
Crypto exchange Bittrex International has announced plans to host its first token sale, or ‘Initial Exchange Offering’ (IEO), on the company’s Malta-based digital asset trading platform. The IEO, which will officially start on March 15, will allow Bittrex users to use Bitcoin to purchase “XRD” tokens, which have been developed by international gaming data blockchain project Raid. Bittrex CEO and founder Bill Shihara has said that further IEOs on the company’s platform will allow international investors to back new projects “with the peace of mind that comes from Bittrex International [being] regulated in Malta.”
The Russian parliament has voted to formally enact new digital rights legislation later this year which will determine how digital rights can be exercised and transferred, and will establish rules for digital transactions, including contracts. The decision comes after lengthy debate over the treatment of digital currencies, and the ways in which they pertain to civil property rights, but it marks a positive move as the country seeks to take a proactive approach to the regulation of digital assets. China maintains a de facto ban on the use of cryptocurrency, while in India the country’s central bank has banned banks from servicing cryptocurrency businesses.
New Kid on the Block – The Technologies, Funds and ICOs you should know about
pite a tight cloak of secrecy, CNBC reports that Facebook is currently engaged in the development of its own cryptocurrency. The move into payments would open up a significant new revenue option for the firm, with Barclays analyst Ross Sandler forecasting a Facebook coin to bring in as much as $19bn in revenue by 2021, and comes as Facebook has been busily bolstering its blockchain team. Former PayPal President David Marcus currently leads the firm’s blockchain and cryptocurrency efforts, and the team has recently been boosted by the hiring of a group of employees from tech start-up Chainspace.
Emaar Group, one of the UAE’s largest real estate developers and owners of the world’s largest building, the Burj Khalifa, has announced plans to develop an “Emaar community token” with the ultimate goal of launching an ICO. Working in partnership with the Swiss crypto start-up Lykke AG, Emaar say that the new token will be available for use at any of the Group’s buildings, and that the Group is targeting a potential user base of 1bn. While few details have been unveiled about the eventual ICO, the Group aims to conclude it within 12 months of the token’s initial launch.
CoinDesk reports that Samsung has unveiled a cryptocurrency wallet for its new flagship phone, the Galaxy S10. While the wallet will only be compatible with Ethereum and ERC20 tokens, it will support four decentralised apps on launch, and is set to be expanded onto more devices and cryptocurrencies in the future. Samsung Blockchain Wallet will be used in conjunction with Blockchain Keystore and is designed to simplify the transactions process for newcomers to the technology.
Scams, Sanctions and Suspicious Activity
US authorities have announced that Konstantin Ignatov, the CEO of OneCoin Ltd., has been accused of criminal charges after partaking in the sale of the company’s fraudulent currency. Reuters reports that prosecutors have announced that OneCoin had more than 3m members, with the company receiving profits of up to €2.23bn in just the two years since it was formed. Ignatov has been charged with wire fraud conspiracy, after telling investors that the value of OneCoin was determined via supply and demand, when in fact it was determined internally.
A United National Security Council has accused North Korea of carrying out major cryptocurrency hacks to bypass economic sanctions, signalling the first time the country has taken part in illicit cryptocurrency activities. CoinDesk writes that the report has claimed that cryptocurrencies give the country more ways to evade sanctions as they are harder to trace, noting that sanctions have already impacted the country’s exports of coal and its foreign exchange earnings. The report also notes that North Korea carried out successful attacks on Asian cryptocurrency exchanges at least five times between January 2017 and September 2018.
City AM reports that the Financial Conduct Authority (FCA) has warned UK consumers to avoid illegal cryptocurrency firms that are posing as authorised companies, after revealing Next Coin Market’s fraudulent efforts to scam customers in the UK. Next Coin Market has been found to dupe victims by sending them links to a fake website which often give consumers the impression of being accredited by the City regulator. Separately, the FCA has announced that more than £197m was lost to investment scams last year.
Bulls & Bears of the week
“We are beginning to see the technology being used by financial services companies in particular, but we expect greater application of blockchain technology across a wide range of industries” – Bin Ren, CEO of Elwood Asset Management
“I see no practical use for Bitcoin or nearly any other cryptocurrency” – Paul Brody, Global Innovation Leader for Blockchain at Ernst & Young