Sunday, September 27, 2015
U.S. Runs Out of Internet Addresses; Pressure on ISPs to Bridge Protocols
World’s First Decentralized Fintech Exchange OpenLedger Launches
Friday, September 25, 2015
BitFury Invests $100 Million into Republic of Georgia for Mega-Data Center
BitPay in Peril? Massive Layoffs Follow Recent Price Hike
Digital Currency Derivatives Exchanges Prepare for Regulation after CFTC Bitcoin Ruling
Only a week after ruling that bitcoin and other digital currencies are commodities, the U.S. Commodity Futures Trading Commission (CFTC) announced on Thursday that they have settled charges filed against TeraExchange LLC (Tera) for arranging a “non-deliverable forward contract” last October.
Neither of the parties entering the trade were looking to profit off of future bitcoin price changes, but rather to test Tera’s network. However, Tera subsequently released a press release that indicated the pre-arranged swap was a real trade, which would violate both the Swap Execution Facility (SEF) Core Principles found in the Commodity Exchange Act and CFTC regulations.
This was the first charge filed by the CFTC against a bitcoin exchange following last week’s announcement, which gave the CFTC jurisdiction over online bitcoin exchange and derivative markets.
Other digital currency platforms that offer similar services have prepared for this moment. LedgerX applied for both an SEF and Derivatives Clearing Organization license last year but has received only a temporary SEF registration at this point.
In a statement released September 10th, CEO Paul Chao said, “[LedgerX does] not intend to launch with only [an] SEF license… Only with both SEF and DCO licenses from the CFTC can we clear and physically deliver the underlying commodity, offer an order-book trading venue, and attract institutional traders.”
LedgerX has even contracted Ancoa, a surveillance technology provider in order to identify “manipulative behaviors and suspicious trading practices” on the LedgerX platform, according to a statement released earlier this year.
While this type of regulation might seem counterintuitive, as it forces exchanges to push back release dates, industry players welcome the oversight. In a private interview, Alt-Options co-founder Marco Cuesta conveyed that “[the CFTC’s] regulation does positively impact the bitcoin derivative market, since its purpose is to protect clients and their assets. As regulation for the Bitcoin derivative market becomes more aligned with that of traditional financial markets, there should be wider adoption, which is good for the industry.”
Image via CFTC
Bitcoin Derivatives Company LedgerX Appoints Ex-CFTC Commissioner Wetjen to Board
LedgerX, an institutional bitcoin trading and clearing platform, announced this week that Mark Wetjen, the ex-commissioner of the U.S. Commodity Futures Trading Comission (CFTC), will join its board.
Nominated by President Barack Obama in 2011 and unanimously confirmed by the Senate as one of the five CFTC commissioners, Wetjen both helped to implement the first trading mandate for certain types of interest rate and credit default swaps and pushed the CFTC to undertake approximately 95 enforcement cases under the Dodd-Frank Act and Commodity Exchange Act.
He also served as the acting chairman and sponsor of the CFTC’s Global Markets Advisory Committee, which advises the CFTC on issues relating to the “the integrity and competitiveness of U.S. markets and U.S. firms engaged in global business.”
LedgerX already recruited a CFTC Commissioner to their team: James E. Newsome, Ph.D., an Independent Director at LedgerX, served at the CFTC from 2000 until 2004, when he assumed the role of President and CEO of the New York Mercantile Exchange, which was acquired for $11.2 billion in 2008 by the CME Group, the parent company of the Chicago Mercantile Exchange.
LedgerX applied for both a Swap Execution Facility (SEF) and Derivatives Clearing Organization (DCO) license last year with the CFTC but has received only a temporary SEF registration at this point. LedgerX CEO Paul Chou has publicly stated that “only with both SEF and DCO licenses from the CFTC can we clear and physically deliver the underlying commodity, offer an order-book trading venue and attract institutional traders.”
Following last week’s announcement from the CFTC declaring bitcoin a commodity, the Wetjen’s appointment will certainly help LedgerX navigate the CFTC’s SEF and DCO license application process in order to become a sanctioned bitcoin trading and clearing platform.
Coinbase on Bitcoin Patents: ‘Don't Hate the Player, Hate the Game’
Bitnik Reload: Automatically Re-Buy Bitcoin without ‘Vendor Bias’
Thursday, September 24, 2015
Bitcoin Hardware Wallet KeepKey Launches and Begins Shipping
In a rare move in the Bitcoin space, KeepKey has simultaneously begun to take orders for and to ship their flagship bitcoin hardware wallet. As of Wednesday, customers are able to purchase the USB device for USD$239 on Amazon, or directly from the KeepKey website using bitcoin. Worldwide shipping is included in the cost.
The KeepKey hardware wallet is designed to store and secure bitcoin while protecting them from virtual attacks such as malware and viruses. The device generates and stores bitcoin private keys, never sharing them with the connected computer. Another key feature is a large OLED screen that displays every transaction before it can be approved, thus allowing users to verify that they are sending funds to the correct address and reducing the chance of error.
“Our guiding principle is to empower individuals and organizations with bank-grade bitcoin security,” says Darin Stanchfield, the founder of the company. “This is what our device does, and it is simple to use. Other products that are available require a high level of sophistication to operate. With KeepKey, it is very difficult to do the wrong thing,”
KeepKey currently works with Google Chrome using the KeepKey Wallet Extension. It is also supported by popular bitcoin wallets, including Electrum and MultiBit.
“Our security model was designed to ensure that the user always has complete control over their private keys,” said Ken Heutmaker, a software engineer at KeepKey. “We feel that relying on trusted third parties degrades the security and privacy that the bitcoin ecosystem offers.”
As for KeepKey’s decision not to take pre-orders in order to fund the hardware wallet’s development, Stanchfield cites his own personal experience with being “burned” by other companies who have pre-sold items and then not been able to deliver.
“A customer takes enough risk when they buy any product,” Stanchfield said to Bitcoin Magazine. “We don’t think they should assume the risk of funding manufacturing, too. We made this promise to ourselves early on in development of KeepKey. Fortunately, we have had the finances to pursue this route to get KeepKey to market.”
Three Bitcoin Finalists Vie for BBVA Open Talent Competition Honors in Barcelona
On September 22nd, the winners of the European division of the BBVA Open Talent Competition were announced in Barcelona, Spain. This year, three of the 15 finalists come from the Bitcoin and blockchain sector: Everledger, Safello and Vaultoro.
The purpose of the competition is to discover and support up-and-coming innovators in financial technology who are poised to “disrupt [the banking] industry in e-commerce, security, mobile payments, data and others.”
The two winners are selected from each of three territories: Europe, Latin America and the United States and the rest of the world. Those six companies not only take home $30,000 each, but also benefit from extensive mentoring and networking support from BBVA in the form of a two-week intensive course.
This year, Everledger was named one of the two European winners.
Based in the U.K., Everledger is a permanent ledger for diamond certification and related transaction history. Using blockchain technology, it acts as a fraud-detection system, overlaying big data from closed sources such as insurers and law enforcement.
“BBVA Open Talent provides an inflection point in the growth curve of Everledger and validates our role in the financial services ecosystem,” Everledger’s CEO Leanne Kemp told Bitcoin Magazine.
“Everledger is a business that will make a difference: At our very core we focus on the ongoing presence of blood diamonds, combatting fraud, theft and counterfeit luxury goods — a problem for consumers, law enforcement and insurers that tops £50 billion a year,” she said. “Blockchain provides a distributed global solution to a fragmented, scattered and complex global problem. With the support from the Barclays Accelerator, and now as a finalist in the BBVA Open Talent Competition, we are having conversations to create new financial and insurance products for diamonds.”
Joshua Scigala, co-founder of Vaultoro, was enthusiastic about the BBVA’s inclusion of his U.K.-based bitcoin and gold exchange.
“We are really proud to be a finalist in the BBVA awards,” Scigala told Bitcoin Magazine. “The developing world skipped the landline and went direct to mobile phones. They are now doing the same with traditional branch banking because it’s just too uneconomical to set up. Vaultoro enables anyone to easily enter the global economy securely by utilizing the native Internet currency, bitcoin, and removing the extreme volatility by combining the security of assigned gold bullion. This will go very far towards ending poverty by including a potential 5 billion people who have no real access to banking.”
Vaultoro is a real-time Bitcoin gold exchange that allows its users to convert their bitcoin instantly to gold and back, alleviating volatility risk for bitcoin users. Its “bank-independent trading” allows users to trade gold in amounts as small as 0.001 gram.
The third bitcoin finalist, Safello, is a Swedish-based exchange that works with a wide network of European banks providing direct payment options, allowing customers to buy and sell bitcoin instantly, thereby avoiding exposure to market volatility.
“What’s most noticeable about this Open Challenge is the sheer amount Bitcoin selected,” Frank Schuil, CEO of Safello, told Bitcoin Magazine. “It shows the dedication from BBVA to embrace blockchain technology. With regards to our selection, of course our recent announcement with Barclays is sparking interest from other financial institutions. The fact that we are essentially building a new type of bank on top of blockchain technology is sparking interest.”
Everledger joins BitNexo, winner of the Latin American regional competition, as the second Bitcoin-based company to take home a BBVA award this year.
“In BitNexo’s mission to bring simplicity, speed and savings to cross border payments for SMBs through the use of blockchain technology, we had the honor of sharing the stage with 13 other amazing FinTech Startups from all around Latin America,” said Darren Camas, CEO and co-founder of BitNexo in a blog post. “To say I was impressed with the level of competition is an understatement.”
Information about all 15 finalists can be found on the BBVA Open Talent competition website.
Austrailian Regulators Investigating Banks for Closing Accounts of Bitcoin Companies
The Australian Competition and Consumer Commission has confirmed the launch of a formal investigation about the abrupt termination of banking support for many bitcoin companies in the country.
“It appears to me to be an amazing coincidence that a number of large banks have all of a sudden decided to deny services to fledgling Bitcoin and digital currency operators. They are clearly competitors to their business model, albeit small ones at this stage, and there are clear laws that we’ve got against businesses refusing to supply other businesses if they do so for an anti-competitive purpose.” said Senator Matthew Canavan, who encouraged the ACCC chairman Rodd Sims to lead an investigation on the incident.
Canavan requested an investigation to question the banks’ motive and reasoning behind the blacklisting of bitcoin companies.
“I think the ACCC should be asking the banks some serious questions about why they’ve done this and on what legal grounds they believe that they should not be providing services to Bitcoin operators,” said Canavan.
It has been reported that 17 bitcoin companies in Australia have had their bank accounts closed down, and have been cut off completely from all banking support.
“I’ve been blacklisted from Commonwealth Bank, National Australia Bank, Westpac, St George, Bank of Melbourne, Bank SA, Bank of Queensland, Rams and BT Superfund,” said Bitcoin trader Michaela Juric.
LottoShares: World’s First Physical Lottery on the Blockchain
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