Maitland/AMO ICO Monitor – 6 June 2019

6th June 2019

The Big Read


Facebook in talks with US regulator over digital currency

Social media giant Facebook has launched talks with the US Commodity Futures Trading Commission, the country’s derivatives regulator, over the establishment of a digital coin. The Financial Times reports that as the company has accelerated its plans to create a new digital payments network, regulators have voiced their concerns, especially over the adherence to money-laundering and “know your customer” rules. In recent weeks, Facebook has also spoken to the US Treasury to provide updates on the project.

Bitcoin’s rally masks uncomfortable fact: almost nobody uses it

Bloomberg reports that Bitcoin is now more than ever facing the lingering reality that few people are actually using the cryptocurrency for anything substantial beyond speculation. The comments come after data from blockchain research company Chainalysis Inc. revealed that only 1.3% of economic transactions involving the coin in the first four months of 2019 came from merchants, with 89.7% accounted for via exchanges. This figure is down from its peak in 2017 when merchant transactions accounted for 1.5% of total Bitcoin activity.

SEC sues messaging app Kik over $100m ICO

The US Securities and Exchange Commission has this week sued Kik, a messaging app, for conducting a $100m ICO without first registering the offering with the regulator. At launch, Kik allegedly committed to establishing a transaction service for the Kin token, and to build a system to reward adopters, yet since raising over $55m in the ICO, Kin tokens have shed around half of their value.

SEC’s Hinman says some ICOs may be eligible for ‘no-action’ relief

The director of corporate finance at the US Securities and Exchange Commission has remarked that some ICOs have evolved to the point at which they should be classified as a security. After making the point last year that Ethereum may have resembled a security at launch but is now sufficiently decentralized to have evolved away from being a security, he remarked at the SEC’s Fintech Forum that “Digital assets may evolve into an instrument that no longer needs to be regulated as such.”


New Kid on the Block – The Technologies, Funds and ICOs you should know about


Binance launches native Trust Wallet on Binance DEX

The world’s second largest crypto exchange, Binance, has launched Trust Wallet – an open source, decentralized wallet offering native support for a range of cryptocurrencies – on its decentralized trading platform Binance DEX. As well as supporting Binance DEX users with the custody of their funds and with trading services, the wallet will also provide users with access to decentralised applications. Trust Wallet also plans to launch support for layer-2 payment protocols, as well as support for staking services.

Japanese E-commerce Giant Rakuten Partners with JR East to Promote Cashless Payments

Japanese cryptocurrency giant Rakuten has entered into a partnership with Japan’s largest railway company to promote the use of cashless payments in the transport industry. The partnership will enable commuters to charge and use their rechargeable smart fare card — JR East’s “Suica” — via the Rakuten Pay mobile app. As Cointelegraph notes, the integrated service will bring cashless transport payments via the mobile app to commuters at 5,000 train stations and approximately 50,000 buses, in addition to around 600,000 stores across Japan. The forthcoming service is planned for launch in spring 2020.


Scams, Sanctions and Suspicious Activity


North Korea launched cryptocurrency attacks in response to sanctions, says FBI

Tonya Ugoretz, deputy assistant director of the FBI’s cyber division has told a conference at The Aspen Institute that North Korea has launched cyberattacks involving cryptocurrency in response to US sanctions. Cointelegraph reports that North Korea is suspected to be behind a number of major campaigns that have involved cryptocurrency ransomware and theft in the past few years, including the 2017 attack on WannaCry, and a series of targeted attacks on exchanges in South Korea and other nearby countries.

Indian Bitconnect Promoter on the Run After Third Crypto Scam

Famous BitConnect promoter Divyesh Darji, who was supposedly involved in promoting a scam cryptocurrency known as Regal Coin, is on the run having been released on bail. Darji was arrested last year in August for his role in the scam, which promised investors up to a 5,000% return on their investments as well as pay-outs starting as soon as 99 days after investment. It is understood that Darji was working in concert with some family members as well as aides.

Polish Exchange Shuts Down and Disappears With Customers Funds

Money.pl received an email from one of its readers last week, which stated that Coinroom, registered in 2016, ceased operations overnight and disappeared with customers’ money in April. Some users say they had up to 60,000 zloty (around $15,790) in their accounts, with one holding up to $35,000. Spokesman for the District Prosecutor’s Office in Warsaw, Łukasz Łapczyński revealed that the office had initiated proceedings against Coinroom in connection with unauthorized activities providing payment services in the exchange of cryptocurrencies.


Bulls & Bears of the week


“We have gone from, you know, crypto as an experiment, is it real? Is it tulips? To crypto is going to be a substantial part of the financial and consumer infrastructure of the world.” – Mike Novogratz, billionaire investor

“[Non-fiat digital coins] are not really currencies … they are very, very risky assets, the value of which oscillates wildly.” – Mario Draghi, President of the European Central Bank

“I’m not expecting Bitcoin to be used in any commerce anytime soon.” – Kyle Samani, co-founder of Multicoin Capital Management