Maitland/AMO ICO Monitor – 5 December 2018
The Big Read
The price of Bitcoin continued to fall over the weekend following on from further disappointments last week, with the currency falling below the $4000 mark on Monday morning. The cryptocurrency had lost more than $12bn over a 24-hour spell on the weekend, demonstrating the lack of momentum and trading activity that is being witnessed across the industry, not following the trends across global markets. As the price of Bitcoin continues to fall, and edges towards the $3000 level, this could provide the catalyst towards the currency experiencing a new monthly low within the next few weeks, leading to what CoinDesk has called a ‘Crypto Winter’.
Chinese investors appear to be increasingly sceptical about blockchain technology, according to Forbes. Amid the turbulence in the global cryptocurrency market, which has seen more than $706bn of its total market capitalisation disappear since early January, start ups are finding it ever more challenging to access capital. Blockchain has yet to deliver a truly killer app or transformational platform, leading many to suspect that new ventures are greatly exaggerating their potential benefits and the time that would be required to realise them.
Earlier last month, Switzerland’s primary stock exchange announced that it will list the world’s first multi-crypto-based exchange-traded product, emphasising how Europe in has bolted ahead of other regions with these exchange-traded products. This ETP will be listed under HOLD, as it will track five of the sectors biggest cryptocurrencies, including Bitcoin Ripple and Ethereum. SIX Swiss Exchange is currently Europe’s fourth largest exchange with a market capitalisation of $1.6tn and is one of the few examples of crypto ETPs across the rest of Europe.
New Kid on the Block – The Technologies, Funds and ICOs you should know about
ErisX, a new cryptocurrency exchange offering investors the ability to trade bitcon, litecoin and ether on spot and futures markets, has raised a total of $27.5m from investors including Fidelity Investments and Nasdaq Ventures. ErisX CEO, Thomas Chippas, said that the investments will be used to hire staff, expand infrastructure “and secure the appropriate steps are taken to develop a regulated market for digital assets.” The launch of the exchange is still subject to regulatory approval.
James Ju, former Chief Technical Officer sat Huobi, has announced that he will be launching a cryptocurrency exchange by the end of the year, securing a group of investors to fund his latest venture. Ju’s exchange, called BHEX, brings extensive experience from high profile technology and financial companies including Google and Alibaba. BHEX will be based on open-source technology, Blue Helix, so that it can create a community-managed custody and clearing managed system. BHEX is being touted as “a next generation digital asset trading platform.”
The world’s largest cryptocurrency exchange, Binance, has released a video demo of its new decentralised exchange, called Binance DEX and set to be launched next year. Despite having similar features to Binance’s existing centralised exchange, the de-centralised version will have some added features including the ability to generate a 24-word mnemonic seed phrase for user’s private keys, as well as a tab allowing users to check with the ease the status of their accounts. The exchange will be secured with decentralised wallet applications, meaning that only users will have access to their funds.
Scams, Sanctions and Suspicious Activity
The Securities and Exchange Commission has settled civil charges with boxer Floyd Mayweather and rapper DJ Khaled after accusing the celebrities of failing to disclose payments that they received for promoting ICOs throughout the year. Celebrity endorsements of ICOs became hugely popular last year, with famous making promotions on social media. One company that Mayweather publicly endorsed, Centra Tech, was indicted earlier in the year by federal prosecutors on fraud charges. Mayweather has agreed to pay more than $600,00 in penalties and disgorgement, while Khaled will pay more than $150,000.
Jared Rice Sr., the CEO of the cryptocurrency platform AriseBank, had been arrested by the FBI, accused of scamming hundreds of investors for a total of $4m. Rice was charged with three counts of securities fraud and three counts of wire fraud. Rice lied to investors by claiming that his platform would offer FDIC-insured bank accounts and Visa-linked debit and credit cards, in addition to crypto services. AriseBank was in fact not authorised to conduct banking services, and Rice was himself using investors’ money for his own personal use.
Bulls & Bears of the week
“Our [coin] mining packages are being snapped up as quickly as we make these available and demand continues to exceed supply.” – Mike Edwards, co-founder of Argo Blockchain
"It is a period of disillusionment. As much as I am a believer in the long term disruptive power of blockchain, it cannot solve all the problems in the world." – Bonnie Cheung, a venture partner at 500 Startups