Report: Singapore’s Wealth Fund GIC Among Those to Raise 300 Mln for Coinbase in 2018

Report: Singapore’s Wealth Fund GIC Among Those to Raise $300 Mln for Coinbase in 2018


Singapore’s Government Investment Corporation (GIC)

was reportedly one of the investors to have helped raise $300 million for major United States crypto wallet provider and exchange service Coinbase in 2018. Bloomberg reported the news on Feb. 28, citing anonymous sources familiar with the matter. According to its official website, GIC — which was founded to manage Singapore’s foreign reserves — has in excess of $100 billion assets in over 40 countries worldwide.

As reported, Coinbase revealed it had raised $300 million in a Series E equity financing round in October 2018, brining its post-money valuation at the time to $8 billion. With the round led by investment firm Tiger Global Management, Coinbase further disclosed at the time a host of backers well-known for their investments in the crypto industry — such as Y Combinator Continuity, Wellington Management, Andreessen Horowitz and Polychain, among others. Singapore’s GIC was not among those investors named.

To press time, neither Coinbase nor GIC have responded to Cointelegraph’s request for comment. Bloomberg also cites documents reportedly seen by the news agency last year, which are alleged to have indicated that Coinbase forecast its 2018 revenue at almost $1.3 billion — mostly derived from trading platform commissions and its proprietary crypto asset holdings. In summer 2018 — amid the protracted bear market — analysts judged that revenue generated by crypto exchanges would more than double to hit $4 billion in 2018, with Coinbase estimated to account for 50 percent of the transaction revenue pool.

As Bloomberg notes, the reported entrance of a major state investment fund such as GIC into the crypto sector appears to align with a growing tide of large-scale stalwart investors — including the prestigious Ivy League university endowments at Yale and Harvard — backing the innovative asset class. Notably, as Cointelegraph wrote in Nov. 18, GIC is reported to have joined Singapore government-owned investment firm Temasek Holdings Pte in backing enterprise blockchain software firm and global banking consortium R3. This month, digital asset management fund Grayscale Investments’ latest crypto investment report revealed that the share of its capital inflow from institutional investors is on the rise.

Article Produced By
Marie Huillet

Marie Huillet is an independent filmmaker, with a background in journalism and publishing. Nomadic by nature, she’s lived in five different countries this decade. She’s fascinated by Blockchain technologies’ potential to reshape all aspects of our lives.



Blockchain and Crypto in the Labor Market: Overview of Salaries Taxes and the Most In-Demand Jobs

Blockchain and Crypto in the Labor Market: Overview of Salaries, Taxes and the Most In-Demand Jobs


Over the past months, the cryptocurrency market has been demonstrating bearish sentiment,

with crypto prices falling to a yearly lows. This is making some blockchain companies rethink their business models and cut employees. However, the slump didn’t prevent the blockchain industry from experiencing a human resources boom, as evidenced by an active growth of vacancies associated with blockchain and digital assets, according to the latest study by recruiting site Glassdoor.

Increase in demand for blockchain-related jobs

As estimated by LinkedIn analysts, 645 vacancies tagged with the words “blockchain,” “Bitcoin,” or “cryptocurrency” were published on the site in 2016. By 2017, this value has surged to approximately 1,800 and to 4,500 vacancies by mid-May of this year. As of now, LinkedIn’s search system displays 13,816 records related to blockchain and 2,479 records related to cryptocurrency.

These estimates are supported by recent data published by Glassdoor’s recruitment portal. As of August 2018, United States companies had posted 1,775 vacancies related to blockchain technology, which is three times more compared to the previous year. As noted in the Glassdoor report, 79 percent of the vacancies are concentrated in the 15 largest American cities, and the most saturated demand regions show that New York and San Francisco account for 24 percent and 21 percent of the total number of crypto-industry job openings. The current total number of blockchain and cryptocurrency vacancies worldwide has grown to around 3,000 and 900 correspondingly.

Software developers are the highest demanded occupation, with 19 percent of vacancies published by employers seeking employees falling into this category. In addition to programmers and technical specialists in the crypto industry, there is a shortage of product managers, risk analysts and marketing specialists. Traders and investment analysts are not among the most sought-after professionals in the crypto industry. But there are more and more vacancies for specialists in new disciplines that have appeared in the wake of blockchain technology’s popularity — “Decentralized Finance,” “Decentralized Internet,” and “Security Hardware.”

However, if taking into consideration the last three months, a fuller picture looks partially different. According to the extended analytics shared by job-search platform Indeed with Cointelegraph, from October 2017 to October 2018, job-seeker interest for roles related to Bitcoin, blockchain and cryptocurrency declined by 3 percent, while employer interest for roles related to the same terms only rose (25.49 percent), which was different than the interest levels from the year before by both parties. If looking at data from 2016 to 2017, job-seeker interest for roles related to Bitcoin, blockchain and cryptocurrency rose by 481.61 percent, while employer interest for roles related to the same terms rose by 325 percent. The following graph shows both the growth of job-seeker interest in jobs with these keywords and the growth of job postings for jobs with these keywords for that time period.

Today, IBM, ConsenSys and Oracle have the greatest need for qualified personnel. Each of them has more than 200 corresponding vacancies, as Glassdoor reports. They became strong competitors of the industry leaders like crypto exchanges, among which Coinbase and Kraken have the greatest need for qualified personnel. The list of major employers for blockchain professionals has also been joined by larger consulting firms Accenture and KPMG. At the same time, the lack of vacancies related to blockchain from such giants as Facebook, Google and Apple could be noted. The need for crypto industry experts isn’t a uniquely American phenomenon. In August, Cointelegraph reported a 50 percent increase in the number of vacancies associated with blockchain and cryptocurrency in Australia, India, Singapore and Malaysia compared with 2017. At the same time, developers who are proficient in the Python programming language are among the most desirable candidates.

“Half-a-million-dollar” jobs and “insane” packages

The lack of qualified personnel means higher salaries for blockchain specialists. As estimated by Glassdoor, the average base salary for such employees is $84,884 a year. This is 62 percent higher than the average wage in the United States ($52,461 per year). At the same time, the variation in salaries ranges from $36,046 for junior developers to $223,667 a year for qualified software engineers. Blockchain developers with three to five years of experience can earn “half-a-million-dollars” a year, according to Blockchain Developers recruitment agency. At the same time, analysts suggest that newcomers can count on a salary “definitely well over $120,000.”

Company executives also noted the increase in salaries in the blockchain and cryptocurrency industry. According to David Schwartz, chief cryptographer at Ripple, the hiring packages have "gotten insane" since “ICOs dumped a bunch of money on the industry.” In particular, a couple of Ripple developers received “$1 million signing bonus offers,” Schwartz disclosed. Notably, the current average salary of software engineer at Ripple is $125,000, as estimated by Glassdoor. Given the fact that the same job was paid $85,000 in May 2018, according to Paysa, it doesn’t seem the crypto market prices affect the developers salaries, at least not at Ripple.

Some employers attribute the decline in the quality of products produced by developers to the increase in salaries. According to Alex Ferrara, partner at Bessemer Venture Partners, which invests in crypto funds, such an “overeagerness” is “impacting the pace of development. A lot of these projects are way behind on their launch schedules.” The current realities of the blockchain industry has been continuously battered by a declining cryptocurrency market, which is partially responsible for the tightening of staff shortages. As raising funds through ICO became more accessible than crowdfunding, qualified specialists prefer to launch their own projects and begin to assemble their development teams, as was the case with Amber Baldet. The leader of JPMorgan Chase’s blockchain team left the company on April 2 to start her own project. As a result of such “forks” inside companies, the shortage of personnel is becoming increasingly acute.

Who needs salaries in crypto?

The popularity of cryptocurrency as a means of remuneration is also growing, although not as quickly. On Sept. 17, HR startup Chronobank published the results of its survey of 445 crypto enthusiasts from around the world, including the U.S., Australia and Russia. The respondents were asked in which currency they preferred to receive wages. Two-thirds (66 percent) of them stated that they were ready to be paid for work in Bitcoin or other cryptocurrencies. The majority (83 percent) of respondents indicated they were supportive of receiving their bonus payments in digital money. Of the individuals interviewed, 72 percent said that, when choosing their next job, they would prefer an employer who offered the possibility of paying salaries in cryptocurrency.

One-fifth of the respondents indicated that they would exchange cryptocurrency, received as wages, for traditional money. Notably, half of the respondents believe that if they receive a salary in cryptocurrency, they will spend less than they do now. The results of the latest survey conducted by peer-to-peer (p2p) platform demonstrated the high level of interest and readiness among U.S. citizens to get paid in cryptocurrencies. Eleven percent of 1,100 freelancers responded that they would like to have their salaries be paid in digital money, and 18 percent expressed their desire to receive a part of their wages in crypto.

Today, wages in cryptocurrency are popular mainly inside the industry. On Aug.18 TechCrunch editor Michael Arrington tweeted that Binance CEO Changpeng Zhao told him that 90 percent of the company's employees preferred to receive a salary in the platform’s native token, Binance Coin (BNB).In December 2017, GMO Internet, a Tokyo-based IT giant, announced its plans to start paying salaries in cryptocurrency. The company intended to pay up to 100,000 yen ($884) of over 4,000 employees monthly salary in Bitcoin. also offers its employees the opportunity to get paid in Bitcoin Cash, given the information from job openings located on its website.

However, cryptocurrency wage payment goes beyond the industry. In August, semi-professional football club "Gibraltar United" announced plans to pay its players a salary with a cryptocurrency called Quantocoin. Club owner Pablo Dan believes that the use of cryptocurrency provides greater transparency and, most importantly, simplifies financial relations with foreign footballers playing for the club. Experts believe that the salaries in cryptocurrency will help international companies attract remote foreign specialists.

“Several U.S.-based companies are paying their international workers in Bitcoin, as it can save both the company and the employee money,” Bloomberg Law analysts suggest. According to the statistics published on the company’s website, nearly 200 companies use Bitwage, a service allowing employees and freelancers to receive payments in cryptocurrency. As estimated by Bloomberg Law, about 65 percent of Bitwage clients are U.S. companies, and 95 percent are using it for paying wages to international workers.

The current statistics, located on the Bitwage’s website, shows that over $31 million has been paid to employees by the companies through this service. Among the clients mentioned are Google, Facebook, Uber and Airbnb. For some people, cryptocurrency payments become more than just a new way to carry out the transactions. Workers in such regions like Latin America, which might not have a matured banking system or stable currency, are given the ability to be paid in cryptocurrencies. For example, developers in Venezuela got more business opportunities and revenues with the advent of Bitcoin. However, receiving wages in cryptocurrency may involve tax liability.

Tax liabilities

The main obstacle to the spread of cryptocurrency salaries remains the lack of clearly defined legislation, including tax rules. Today, the regulatory approaches of different countries and their views on the taxation of digital money vary greatly. In the European Union, there are no special rules for regulating activities related to digital money, and the taxation of crypto transactions is regulated by the national legislation of each country. As a result, in France, digital currencies are subject to capital gains taxes, with fees of 14-45 percent. Germany doesn’t charge any taxes as long as cryptocurrency is used as a means of payment. Bitcoin has no established legal status in the U.K,, but is commonly treated as a foreign currency for most purposes, including value-added and goods-and-service taxes.

Asian countries offer a different approach to taxation of crypto-related activity. In Singapore, if digital currencies are part of the taxpayer's investment portfolio, then the profits from selling them are not taxed, since they are considered capital gains. Notably, Bitcoin is recognized not as money but as a service, and therefore a tax on goods and services (local analogue to VAT) is applied to it. In China, cryptocurrency transactions are subject to income tax and capital gains tax, and revenues are subject to taxation. Japanese individuals are charged from 15 to 55 percent for any activity related to Bitcoin. In Australia, cryptocurrency transactions are subject to income tax. In Canada, they are subject to income and capital gains tax, with up to 50 percent of the revenue charged. In the U.S., cryptocurrency owners pay taxes on digital money as they would on property.

Blockchain in recruitment

As blockchain technology and cryptocurrency give birth to new jobs, business models reliant on third-party involvement may become increasingly outdated. The bottom line is that smart contracts — decentralized, digitized commercial agreements — control the fulfillment of obligations by all parties and manage all essential financial flows. As a result, the third-party services of various kinds of intermediaries may no longer be required. Meanwhile, mediation services constitute a large segment of the modern economy. After all, in traditional contracts used by banks, brokers, authorities, realtors and others, it is the intermediary that describes the terms of the transaction, draws up the document template, monitors the execution of an agreement, and appropriates a significant part of the payment.

Smart contracts automatically coordinate and ensure the interests of all parties, almost instantly and free-of-charge. Moreover, the inability to change information in the blockchain provides the highest level of security to all participants in the transaction, eliminating the possibility of data manipulation and deception. Basically, one smart contract can replace a room full of corporate lawyers, realtors, recruiters, risk managers and other professionals whose work essentially boils down to the formal assessment of documents.

In addition to regulating labor relations inside the company, blockchain technology can become a magic pill for the freelancing industry. During the past couple of years, the scale of remote work around the world has increased significantly, and the sector is expected to continue to expand. Former U.S. Secretary of Labor Robert Reich calculated that in a couple of years, 40 percent of the U.S. workforce will be freelancers. However, this could lead to a number of issues since freelancers are not considered to be full-time employees, which means that they remain outside the scope of health insurance, pensions and other social benefits. Moreover, they are forced to use the services of aggregator sites, which primarily focus on the interests of the customer, and not the freelancers themselves. In addition, such platforms like Upwork charge up to 20 percent for a bill, and payments for the work performed are often delayed.

Some projects use the advantages of blockchain technology to solve the problems that currently plague the freelance economy. Some provide freelancers with service where blockchain is leveraged to ensure paid vacation and sick pay when needed. Other solutions offer a blockchain-based system for resolving disputes between customers and freelancers. Some platforms are deploying blockchain-powered Human Resource Bank to allow p2p matching of potential employers with contractors on the basis of verifiability of all user data, and excluding the possibility of falsification. The use of blockchain technologies in social networks and internet sites for freelancers demonstrates the high demand of the industry for new solutions using advanced technologies and cryptocurrencies. The exclusion of intermediaries, direct communication, reputation systems is what the blockchain brings to the labor industry.

What's next

The pace of development and the integration of blockchain and cryptocurrency in everyday life will likely depend on the position and attitude of national governments. Countries with a friendly position on cryptocurrency are already leaders in the use of blockchain technology. Florida residents pay for property taxes, driver's licenses, ID cards and car numbers in cryptocurrencies — Bitcoin and Bitcoin Cash — using the BitPay payment system. The corresponding decree has been approved by the State Department of Taxes.

Meanwhile, in 2017, China banned cryptocurrency trading, ICOs and cryptocurrency exchanges, and the result was a tenfold decrease in the circulation of cryptocurrencies. According to the country's central bank, the yuan's share in the Bitcoin market fell from 90 percent to 1 percent, and 88 crypto exchanges and 85 blockchain startups that had been operating in China since autumn 2017 left the country. In such conditions, the numbers of those who want to receive a salary in Bitcoin may also gradually drop.

Another factor, which may impact the adoption of cryptocurrency in the labor market, is the price of digital currency. As of now, most cryptocurrencies are volatile, and that dramatically cools the enthusiasm of workers regarding the payments of wages in digital currency. As the sector continues to develop, mature and adhere to government-mandated regulations, the number of workers choosing to receive their wages in Bitcoin, Ether and other cryptocurrencies may become more and more common. Raj Mukherjee, senior vice president of products at Indeed,

told Cointelegraph:

“While over the last few years, Indeed saw a steady rise in job-seeker interest for roles related to cryptocurrency, our data shows that job searches for these roles really picked up around the time when the cost of Bitcoin was at its highest. Since then, job-seeker interest has gone down, but still remains strong.”

On the other hand, the demand for specialists capable of solving specific tasks will grow. Stephane Kasriel,

CEO of Upwork said:

“In just a few years, more than 30 percent of the workforce’s essential skills will be new. We’re seeing that shift take place on Upwork, where new and emerging skills like blockchain surface on a monthly basis."

Large corporations like IBM and Microsoft have been willing to invest for the long term in blockchain by expanding hiring over the last year. The trend of mid-2018 will likely continue moving to smaller companies, as experts predict. Though the overall number of applications posted by job-seekers has declined by 3 percent since last year, the continuous fall in cryptocurrencies’ prices hasn’t affected the interest that companies seeking blockchain specialists have demonstrated.

Article Produced By
Julia Magas

Julia is good at analysing cryptocurrency and blockchain market, as well as finding the deep and most demanding information, even when it's practically impossible. Julia writes for a number of digital information resources, raging from music to technology and game reviews. Practices some trading for experimental and analytical purposes.


Properties of Resveratrol: In Vitro and In Vivo Studies about Metabolism Bioavailability and Biological Effects in Animal Models and Humans

Properties of Resveratrol: In Vitro and In Vivo Studies about Metabolism, Bioavailability, and Biological Effects in Animal Models and Humans


Multiplicity of effects and health benefits of resveratrol.

Resveratrol is mainly found in grapes and red wine, also in some plants and fruits, such as peanuts, cranberries, pistachios, blueberries and bilberries. Moreover, nowadays this compound is available as purified preparation and dietary supplement. Resveratrol provides a wide range of benefits, including cardiovascular protective, antiplatelet, antioxidant, anti-inflammatory, blood glucose-lowering and anticancer activities, hence it exhibits a complex mode of action. During the recent years, these properties have been widely studied in animal and human models, both in vitro and in vivo. This paper is intended to present information published during the recent years on the biological activities and multiple effects of resveratrol.

Article Produced By
Department of Biochemistry, Medical Academy, Lithuanian University of Health Sciences, Kaunas, Lithuania; Laboratory of Molecular Neurobiology, Neuroscience Institute, Medical Academy, Lithuanian University of Health Sciences, Department of Drug Technology and Social Pharmacy, Medical Academy, Lithuanian University of Health Sciences

Properties of Resveratrol: In Vitro and In Vivo Studies about Metabolism, Bioavailability, and Biological Effects in Animal Models and Humans

Plants containing resveratrol have been used effectively in traditional medicine for over 2000 years. It can be found in some plants, fruits, and derivatives, such as red wine. Therefore, it can be administered by either consuming these natural products or intaking nutraceutical pills. Resveratrol exhibits a wide range of beneficial properties, and this may be due to its molecular structure, which endow resveratrol with the ability to bind to many biomolecules. Among these properties its activity as an anticancer agent, a platelet antiaggregation agent, and an antioxidant, as well as its antiaging, antifrailty, anti-inflammatory, antiallergenic, and so forth activities, is worth highlighting. These beneficial biological properties have been extensively studied in humans and animal models, both in vitro and in vivo. The issue of bioavailability of resveratrol is of paramount importance and is determined by its rapid elimination and the fact that its absorption is highly effective, but the first hepatic step leaves little free resveratrol. Clarifying aspects like stability and pharmacokinetics of resveratrol metabolites would be fundamental to understand and apply the therapeutic properties of resveratrol.

1. Background

Resveratrol (3,5,4′-Trihydroxystilbene) is a natural polyphenol with a stilbene structure. Its chemical structure was characterized in 1940 by Takaoka, who isolated it from the root of Veratrum grandiflorum. However, it has been present in medicinal preparations, such as darakchasava or manakka [2], for more than 2000 years. Its basic structure consists of two phenolic rings bonded together by a double styrene bond, which forms the 3,5,4′-Trihydroxystilbene (molecular weight 228.25 g/mol). This double bond is responsible for the isometric cis– and trans-forms of resveratrol. It is worth mentioning that the trans-isomer is the most stable from the steric point of view.

Chemical structures of trans-resveratrol and cis-resveratrol.

There are many synthetic and natural analogues of resveratrol, as well as adducts, derivatives, and conjugates, including glucosides . The synthesis of resveratrol decreases regularly during the grape ripening process, which explains the increasing susceptibility of mature fruits to infection by Botrytis cinerea. Resveratrol is a phytoalexin. These chemicals are characterized by their low molecular weight and their ability to inhibit the progress of certain infections. The accumulation of these substances in plants is produced by a mechanism of resistance to parasites and other adverse conditions, like fungal infection, UV radiation, chemical substances and, in general, stressful factors for the plant. In fact, resveratrol is produced by more than 70 species of plants in response to such stressful situations.

The concentration of resveratrol in plants depends on various factors. For example, in vines, the two most important factors are the weather and presence of fungus. Resveratrol can be found in some fruits, which are part of the human diet, such as blueberries (Vaccinium spp.), blackberries (Morus spp.), and peanuts (Arachis hypogaea). However, red wine is the main source of resveratrol in the Mediterranean diet. Resveratrol content in red wine comes from grapes (Vitaceae). In particular, the richest sources are the skin, seeds, petioles, and woody parts. For that reason, red wine is richer in resveratrol than white wine, because during the production of red wine, parts of the grape where resveratrol is concentrated are macerated. This does not happen in white wine. Alcohol formation during grape fermentation facilitates its solubility and thus its extraction. Cis– and trans-isomers coexist in plants and in wine. However, cis-resveratrol has never been found in grape extract. The trans-isomer appears to be the more predominant and stable natural form. Cis-isomerisation can occur when the trans-isoform is exposed to solar  or artificial light or ultraviolet radiation at a wavelength of 254 or 366 nm

Although less important in our culture, the richest source of resveratrol is the Polygonum cuspidatum herb, whose root extract has played a very important role in Japanese and Chinese traditional medicine. In fact, it is the main active ingredient in ko-jo-kon, which is used in the treatment of several cardiovascular diseases . Veratrum grandiflorum has a high content of resveratrol in leaves, when the plant is damaged by any chemical treatment. Furthermore, the roots and rhizomes of Veratrum formosanum are also rich in resveratrol and, in fact, a preparation of this plant has been traditionally used in east Asia to treat hypertension

Article Produced By
Department of Physiology, Faculty of Medicine, University of Valencia, INCLIVA, Department of Physiotherapy, Faculty of Physiotherapy, University of Valencia, Sports Research Centre, Miguel Hernández University of Elche, University Avenue

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Mercedes-Benz to Use Blockchain Tech for Sustainable Transaction Book Supply Chains

Mercedes-Benz to Use Blockchain Tech for Sustainable Transaction Book, Supply Chains


German automobile brand Mercedes-Benz Car has developed a platform

based on blockchain technology to increase transparency and sustainability in complex supply chains, according to press release published on Feb. 25. Mercedes-Benz, a division of Daimler AG, a German multinational automotive corporation, has partnered with United States-based software company Icertis for cooperating in the development of blockchain tech for supply chain use.

Mercedes-Benz has announced that that they have jointly developed and programmed a prototype with Icertis based on blockchain technology that allows for the storage of documentations and contracts in complex supply chains. The project allows for the creation of a transparent and sustainable mapping of sorted documents across the entire supply chain, the press release notes. The parties have now entered the testing phase of the pilot project. Underlining the complexity of the modern supply chains, Wilko Stark, a member of the divisional board of Management Mercedes-Benz, states that blockchain tech could affect “nearly the entire value chain,”


"Blockchain technology has the potential to fundamentally revolutionize our procurement processes […] With our Blockchain-prototype, we are in the first step testing one of diverse possible applications with the aim of increasing transparency beyond our direct suppliers."

As Cointelegraph wrote on Sep. 26, Porsche AG, another major German automobile manufacturer, announced their plans to increase investments in blockchain-related startups in order to “gain access to trends, new technologies and business models.” Earlier this month, one of largest general trading company in Japan, Itochu Corporation, officially announced the start of a proof-of-concept aimed at developing a blockchain-backed traceability system that would allow buyers and sellers to record transaction details about supply chains through a smartphone app, as Cointelegraph reported on Feb. 1.

Article Produced By
Max Yakubowski

Max Yakubowski has a Ph.D. in Linguistics and Anthropology, with a focus in innovative technology and its cultural and social influence. He joins Cointelegraph after working as a freelance copywriter and blogger.


Dow Jones’ watchlist of 24 million high-risk clients has leaked

Dow Jones’ watchlist of 2.4 million high-risk clients has leaked


A watchlist of risky individuals and corporate entities

owned by Dow Jones has been exposed, after a company with access to the database left it on a server without a password. Bob Diachenko, an independent security researcher, found the Amazon Web Services-hosted Elasticsearch database exposing more than 2.4 million records of individuals or business entities. The data, since secured, is the financial giant’s Watchlist database, which companies use as part of their risk and compliance efforts. Other financial companies, like Thomson Reuters, have their own databases of high-risk clients, politically exposed persons and terrorists — but have also been exposed over the years through separate security lapses.

A 2010-dated brochure billed the Dow Jones Watchlist as allowing customers to “easily and accurately identify high-risk clients with detailed, up-to-date profiles” on any individual or company in the database. At the time, the database had 650,000 entries, the brochure said. That includes current and former politicians, individuals or companies under sanctions or convicted of high-profile financial crimes such as fraud, or anyone with links to terrorism. Many of those on the list include “special interest persons,” according to the records in the exposed database seen by TechCrunch.Diachenko, who wrote up his findings, said the database was “indexed, tagged and searchable.”

From a 2010-dated brochure of Dow Jones’ Watchlist, which at the time had 650,000 names of individuals and entities. The exposed database had 2.4 million records. (Screenshot: TechCrunch)Many financial institutions and government agencies use the database to approve or deny financing, or even in the shuttering of bank accounts, the BBC previously reported. Others have reported that it can take little or weak evidence to land someone on the watchlists.The data is all collected from public sources, such as news articles and government filings. Many of the individual records were sourced from Dow Jones’ Factiva news archive, which ingests data from many news sources — including the Dow Jones-owned The Wall Street Journal.

But the very existence of a name, or the reason why a name exists in the database, is proprietary and closely guarded. The records we saw vary wildly, but can include names, addresses, cities and their location, whether they are deceased or not and, in some cases, photographs. Diachenko also found dates of birth and genders. Each profile had extensive notes collected from Factiva and other sources. One name found at random was Badruddin Haqqani, a commander in the Haqqani guerilla insurgent network in Afghanistan affiliated with the Taliban. In 2012, the U.S. Treasury imposed sanctions on Haqqani and others for their involvement in financing terrorism. He was killed in a U.S. drone strike in Pakistan in August 2012. The database record on Haqqani, who was categorized under “sanctions list” and terror,”

included (and condensed for clarity):

Killed in Pakistan's North Waziristan tribal area on 21-Aug-2012.


Eye Color Brown; Hair Color Brown; Individual's Primary Language Pashto; Operational Commander of the Haqqani Network


Additional information from the narrative summary of reasons for listing provided by the Sanctions Committee:

Badruddin Haqqani is the operational commander for the Haqqani Network, a Taliban-affiliated group of militants that operates from North Waziristan Agency in the Federally Administered Tribal Areas of Pakistan. The Haqqani Network has been at the forefront of insurgent activity in Afghanistan, responsible for many high-profile attacks. The Haqqani Network's leadership consists of the three eldest sons of its founder Jalaluddin Haqqani, who joined Mullah Mohammed Omar's Taliban regime in the mid-1990s. Badruddin is the son of Jalaluddin and brother to Nasiruddin Haqqani and Sirajuddin Haqqani, as well as nephew of Khalil Ahmed Haqqani.

Badruddin helps lead Taliban associated insurgents and foreign fighters in attacks against targets in south- eastern Afghanistan. Badruddin sits on the Miram Shah shura of the Taliban, which has authority over Haqqani Network activities.

Badruddin is also believed to be in charge of kidnappings for the Haqqani Network. He has been responsible for the kidnapping of numerous Afghans and foreign nationals in the Afghanistan-Pakistan border region.


Other information: Operational commander of the Haqqani Network and member of the Taliban shura in Miram Shah. Has helped lead attacks against targets in southeastern Afghanistan. Son of Jalaluddin Haqqani (TI.H.40.01.). Brother of Sirajuddin Jallaloudine Haqqani (TI.H.144.07.) and Nasiruddin Haqqani (TI.H.146.10.). Nephew of Khalil Ahmed Haqqani (TI.H.150.11.). Reportedly deceased in late August 2012.


Entities and individuals against whom there is evidence of involvement in terrorism.

Dow Jones spokesperson Sophie Bent said: “This dataset is part of our risk and compliance feed product, which is entirely derived from publicly available sources. At this time our review suggests this resulted from an authorized third party’s misconfiguration of an AWS server, and the data is no longer available.” We asked Dow Jones specific questions, such as who the source of the data leak was and if the exposure would be reported to U.S. regulators and European data protection authorities, but the company would not comment on the record. Two years ago, Dow Jones admitted a similar cloud storage misconfiguration exposed the names and contact information of 2.2 million customers, including subscribers of The Wall Street Journal. The company described the event as an “error.”

Article Produced By
Zack Whittaker

Security editor

Zack Whittaker is the security editor at TechCrunch.


Blockchain Post-Trade Platform Vakt Partners With Majority of North Sea Oil Market

Blockchain Post-Trade Platform Vakt Partners With Majority of North Sea Oil Market


Vakt, a blockchain-based post-trade platform

for oil, has signed up four new clients, according to a statement published on the platform’s website on Feb. 25. As per Etienne Amic, Vakt’s recently appointed CEO, the company has partnered with four new clients prior to its official launch at International Petroleum Week, which starts in London today, Feb. 26. The new users of the platform join major industry players that initially backed Vakt, including BP, Shell and Total, along with traders Gunvor and Mercuria, the press release notes. Other Vakt investors reportedly include industry giants Chevron, Equinor and Reliance Industries. The new contracts mean that Vakt will be used in about two-thirds of all oil deals in the North Sea region. According to Amic, the significant level of adoption in the energy sector could motivate others to

examine blockchain solutions:

“We felt that we needed about 60 to 70 per cent of a market to reach ignition point [that would] incentivise other people to join.”

According to the announcement, the platform is planning to expand its blockchain services to barges of oil products in northern Europe and United States crude pipelines. Vakt, whose main goal is to improve the routine of commodity trading and eliminate unnecessary paperwork and contracts, was launched back in November 2018, boasting major oil firms and banks as partners. Earlier this month, Amic — formerly a JPMorgan Chase executive — was appointed as Vakt’s new CEO. As Cointelegraph reported, he will be responsible for commodities trading. A similar platform was launched last year in Switzerland by a group of major global banks, trading firms and a leading energy company. The venture, dubbed Komgo SA, oversees a blockchain-based platform for commodity trading financing.

Article Produced By
Ana Berman


Cowboys on the Block: Inside Wyoming’s Race for Crypto Prominence

Cowboys on the Block: Inside Wyoming’s Race for Crypto Prominence


In the first month of 2019, the state of Wyoming

has performed yet another series of power moves showcasing its continued commitment to becoming America’s new crypto hub, even despite recent changes in political leadership. The incoming governor, Mark Gordon, made room for some blockchain talk in his inauguration speech, celebrating the state’s innovative approach to regulation and touting a handful of homegrown startups. Over the next couple of weeks, Wyoming’s legislature erupted with a series of groundbreaking crypto-related bills that is only comparable to a similar wave in March of last year.

America’s least populous state, whose economy has been always skewed toward mining and agriculture, looks determined as ever to deliver on the promise to become the nation’s “crypto valley.” Consonant with this jaunty tune, blockchain startups have indeed started pouring into the area. Perhaps Wyoming’s biggest signing this year so far is the relocation of Iohk, the company behind the Cardano blockchain.

The sweeping changes that the Cowboy State’s lawmakers have recently passed or introduced as bills include defining three categories of digital assets and treating them as property; granting assets designated as virtual currencies the same legal status as money; authorizing banks to hold digital assets in custody; allowing corporations to issue certificate tokens that represent shares; and creating a regulatory fintech sandbox aimed at further diminishing any regulatory hurdles to industry startups. These developments look more radical than many of the other states’ recent blockchain-savvy moves, as they often explicitly challenge a variety of disparate federal approaches to crypto regulation.

Celebrating the news of another revolutionary piece of crypto legislation from Wyoming, one could wonder: Is this for real? Are they serious about this? What is it they are really shooting for? Putting Wyoming’s newfound crypto drive in a broader context could shed some light on how and why the state of ranchers and miners decided to boldly reach out to the crypto industry.

Courting the giants

It is not unprecedented for a small state far removed from traditional technology and financial hubs to be courting a burgeoning new industry amid regulatory uncertainty — something that often happens after the initial period of explosive growth. Once a state is willing to tweak its laws to provide a greenhouse level of care and protection to a particular class of enterprises, moving from the comfort of coastal urban areas into some windy plains doesn’t seem like

that much trouble any more.

An unlikely romance between Citibank and South Dakota provides a textbook example. In the early 1980s, when the initial gold rush of early credit card lending business began stalling under the weight of regulations — such as strict interest rate caps — policymakers in the Midwestern state saw their chance. Taking advantage of a Supreme Court ruling that allowed banks to charge the highest interest rate allowed in their home state, South Dakota introduced a batch of lax banking laws and invited banks to feel themselves at home. In 1981, Citibank was the first to respond to the call, bringing thousands of new jobs into the area. The city of Sioux Falls now has about 20,000 financial sector jobs, while South Dakota holds more bank assets than any other state.

Another place in the United States that definitely knows how to attract out-of-state enterprises is Delaware. Its hospitality extends beyond just tech businesses, or any specific kinds of businesses, for that matter — the state has long been known as a tax haven and is now home to almost a half of all U.S. public corporations. More recently, it has seen a surge in limited liability corporations (LLC) registration, thanks to relative ease of incorporation and a small flat LLC tax. Delaware also has a far-reaching statewide blockchain initiative, which apparently became the inspiration for one of the fresh Wyoming bills. Against the background of the already highly welcoming corporate climate, however, Delaware’s set of blockchain-friendly policies inevitably looks less salient than the Cowboy State’s legislative onslaught.

Underlying interests

So, how exactly does the influx of digital-money businesses promise to benefit Wyoming? Perhaps the simplest hunch is that the state is looking to capitalize on registration and incorporation fees. Delaware’s example is enticing: Once you have a steady stream of newcomers from all over the place, you can enter a virtuous circle by keeping the fees low and attracting even more enterprises. State Rep. Tyler Lindholm, who has been behind most of Wyoming’s key blockchain legislation, openly admitted to looking at the Northeastern state as a benchmark, and noted that his state was making about $30 million in fees, against Delaware’s $1.2 billion.

If there is one thing that is potentially more lucrative than attracting a whole new industry to your jurisdiction, it is harboring a new industry that barely exists elsewhere. This is basically what the digital asset custody bill does. By authorizing banks to administer digital assets under the new regulatory framework, Wyoming sets out to reach an ambitious goal of enabling them to comply with the Securities and Exchange Commission’s (SEC) regulations for “qualified custodians.” This is nothing less than a bid to establish a regulatory environment that would allow for the entirely new class of services to emerge within the state: digital asset custody.

It is worth noting that Wyoming’s attraction to blockchain technology is not a standalone phenomenon, but rather a part of a larger effort to diversify the economy. The official commitment to expanding the state’s technology sector is at least seven years old, while theEconomically Needed Diversity Options for Wyoming (ENDOW) program was established in 2017. It was the ENDOW executive council that included recommendations for legislative action on several technological initiatives last year, including a series of blockchain-related bills.

One more reason to double down on blockchain liberalization has been the flight of money transmitters from the state over the last few years — and the need to get them back.  Contrary to the proclaimed tech-friendly spirit, the Wyoming Money Transmitters Act, which was passed in 2011 and came into full effect in 2014, imposed cumbersome licensing requirements on crypto exchanges. This forced Coinbase and a handful of others to halt their operations in the state by 2015. The series of laws enacted last March included provisions that crypto exchanges be exempted from the money transmission laws. A few months later, Coinbase returned to Wyoming.

Wyoming Blockchain Coalition

If some important legislative developments have taken place somewhere in the U.S., probably someone has lobbied for it. Lurking behind all the news reports of Wyoming’s blockchain regulation advancements is the group called the Wyoming Blockchain Coalition, as well as the names of several of its prominent members. Among them, Caitlin Long is the undisputed headliner.

A Wyoming native with a passion for “honest ledgers,” Long spent more than two decades working for the likes of Morgan Stanley before heading the blockchain startup Symbiont. Having realized that she couldn’t legally donate to the University of Wyoming in crypto, Long got the idea that the state law could use some improvement. That’s how the Wyoming Blockchain Coalition came about. Consisting initially of Long and a few of her friends, the group eventually drew in many of the state’s forward-thinking notables. Their names can now be found among those who sponsored the groundbreaking bills.

Not only are some state politicians members of the coalition, they are also personally invested in local blockchain enterprises. Sen. Ogden Driskill became involved last year with BeefChain — a Wyoming-based startup that is building an immutable ledger designed to track free-range cattle. Another legislator who often makes headlines in crypto media, Rep. Tyler Lindholm, acts as the chief of ranching operations for the same company.

It appears that Wyoming’s impressive push for blockchain leadership relies on several major ingredients. There is evidently a consensus among the elites as to the urgent need for expanding and promoting the state’s technology sector — and somehow they decided that the trendy distributed ledger technology might be their best bet. There is also a tried and tested strategy for small states that are eager to get ahead: tailoring legislation to the needs of whomever they are betting on. Yet, even when all the structural factors are in place, things are unlikely to work unless there are leaders on the ground, who value and understand the innovation they are pushing for. With the blockchain-savvy ranchers of Wyoming, this seems to be the case.

Article Produced By
Kirill Bryanov

Kirill Bryanov is a PhD researcher at Lousiana State University. His scholarly interests center on political and societal implications of communication technology, with a focus on blockchain-powered decentalized architectures.


Initial Country Offering as Next Big Thing For ICOs: Expert Blog

Initial Country Offering as Next Big Thing For ICOs: Expert Blog


One week ago Belarus President Alexander Lukashenko

signed the Decree "On Digital Economy Development" that legalizes ICO, cryptocurrencies and smart contracts. Two months ago the Republic of Abkhazia announced its plans to raise $1 bln in an ICO. Abkhazia followed Venezuela, the first country to consider crypto as a funding mechanism, with its well-publicized plan to roll out an oil-backed token called “Petro.” Puerto Rico has had an awful decade and its government is more than $70 bln in debt. Recently cryptocurrencies’ capitalization was around $400 bln, now – more than $500 bln. What about ICO for $70 bln to make “crypto valley” in the US there?


In 1996, one of the founders of the Electronic Frontier Foundation, John Perry Barlow, wrote "A Declaration of the Independence of Cyberspace." A seminal text for its time,

it says:

"Cyberspace consists of transactions, relationships, and thought itself, arrayed like a standing wave in the web of our communications. Ours is a world that is both everywhere and nowhere, but it is not where bodies live."

Estonian e-government services can be run from anywhere. In the old days, a government in exile would quickly lose legitimacy. Sheltering in another country, it would lack the infrastructure to do its work. But today an Estonian government in exile could just carry on. It helps to clarify the differences between a nation, a state and a geographical country.

In general, a nation is a group of people within an area who perceive themselves as a unique entity, a country is that geographical area itself, and a state is a set of political organizations that those people agree to adhere to. By disconnecting the Silicon-based functions of the state from the actual soil-based country, Estonians are protecting their nation. But it's more than that. Estonians are successful in their efforts and they can build a digital state infrastructure that can be hosted anywhere. It doesn't have to be an officially recognized state – if we can deterritorialize a state, could we perhaps “state-ify” a nation? It could be backed up and turned off, reduced to a suitcase full of hard drives, only to boot back up again when the time is right.

Country-as-a-service – CaaS

You are probably familiar with SaaS – “software as a service.” It’s basically paying for software/hardware as you use them, rather than buying them. These services used to cost you a lot, but are now free or near enough. That’s where governance is going. Government services could become plug and play apps you stitch together to suit your business or lifestyle. There’s no logical reason why governance shouldn’t be delivered as SaaS (CaaS).

The most interesting (and promising) Blockchain-related industries are strictly outside of the cryptorealm – they include solutions for healthcare and logistics, land sale support, governmental and corporate workflow solutions. Estonia, a global leader in e-government, has recently launched a unified medical record database, accessible to hospitals and insurance companies, in partnership with the Blockchain startup Guardtime. Prescrypt works along the same lines in partnership with SNS Bank and Deloitte in the Netherlands, BitHealth – in the United States.

Swedish government together with ChromaWay and a partner bank is going to test Blockchain smart contracts for the land registry, to simplify life of buyers, sellers, and banks, using land as collateral on a regular basis. BitFury launches a similar initiative in Georgia, whereas BitLand enters Ghana and Honduras (and have plans to expand to Nigeria and Kenya). UAE launches Blockchain strategy to become paperless by 2020.

The state of Delaware, hosting numerous companies from other states and countries, is to introduce a Blockchain-based system of company registration, an issue of shares, recording of Board Resolutions, redistribution of shares as a result of purchase and sales transactions. British Everledger assists banks, insurers and open marketplaces in a reduction of risk and fraud by digitally certifying diamonds, art objects and high-end bottles of wine.

In comparison with the current focus on ICO-backed startups investments into Blockchain-based GovTech startups (to support their growth and building of the ecosystem of such services) looks very promising: Governance is the next big thing for ICOs and Blockchain world. This new ecosystem, such “borderless country in the cloud” could be like creation of Israel 2.0. Anyway, it seems short-sided to talk about geographical borders in the modern online-world, especially in terms of decentralized economy and Blockchain-community.

Article Produced By
Vladislav Solodkiy

Vladislav Solodkiy is a managing partner at Life.SREDA, Singapore-based fintech-VC, author of The First Fintech Bank’s Arrival book.


ETH Futures Case: The Industry’s Feedback to CFTC Reviewed

ETH Futures Case: The Industry’s Feedback to CFTC, Reviewed


On Feb. 17, the United States Commodity and Futures Trading Commission (CFTC)

stopped accepting public comments regarding the Ethereum (ETH) mechanism. Previously, as 2018 was drawing to a close, the agency requested the feedback on the cryptocurrency to better understand the technology and how it compares to Bitcoin (BTC). The CFTC, which oversees the futures and options market in the U.S., has long determined that Bitcoin is a commodity, and therefore falls into its regulatory purview. In December 2017, the agency allowed two major regulated exchanges — the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE) — to list BTC futures on their platforms. Now, given that Ethereum, like Bitcoin, has been cleared of being classified as a security, the watchdog might be preparing to greenlight Ethereum futures contracts.

Around 30 public comments were submitted in response to the CFTC’s request: Coinbase, Circle and Craig Wright were among respondents

On Dec. 11, the CFTC announced it was seeking public comments and guidance regarding the Ethereum network. Specifically, the agency required the feedback to better understand the cryptocurrency and its underlying technology, as well as the differences and similarities between Ethereum and Bitcoin, including the “opportunities, challenges, and risks” associated with the altcoin.

Further, on Dec. 17, the regulator followed up on its initial statement and published a respective Request for Information (RFI) with the Federal Register in order to collect the information. The CFTC requested public comments on 25 different questions regarding Ethereum — namely its security and market features, as well as use cases of applications based on its network. The agency also noted that it oversees the commodity futures markets as per the Commodity Exchange Act (CEA), meaning that the CFTC will most likely use the comments to assess the possibility of approving Ethereum futures. The watchdog


“The Commission is seeking public feedback in furtherance of oversight of these markets and regulatory policy development. The input from this request will advance the CFTC’s mission of ensuring the integrity of the derivatives markets as well as monitoring and reducing systemic risk by enhancing legal certainty in the markets.”

Moreover, the CFTC noted that the results of the RFI will also be used by its fintech initiative dubbed LabCFTC. Founded in May 2017, LabCFTC is a dedicated hub for “engagement with the fintech innovation community,” aiming to examine “new regulatory fintech developments in the marketplace,” as previously explained by CFTC Chairman Christopher Giancarlo. Finally, the 60-day deadline was announced as well, as the document stated that comments must be sent not later than Feb. 17, 2019.

According to the CFTC website, a total of 43 entries were submitted by the public before the deadline. After taking a closer look, it becomes clear that 14 of those entries are either advertisements, generally irrelevant comments or identical copies of other statements. Hence, only 29 RFI entries represent comments on Ethereum submitted by the public. Those were filed by industry participants such as Coinbase, Circle, ConsenSys and Craig Wright, among others. Here is the list of selected, generalized questions proposed by the CFTC, along with answers from certain crypto companies and trading associations.

How do the current functionalities and capabilities of Ether and the Ethereum Network compare to those of Bitcoin?

The Ethereum Foundation: Switzerland-based nonprofit organization comprised of global team of developers

The Ethereum Foundation argued that, on the Bitcoin blockchain, each account simply stores a certain amount of Bitcoin as well as “a script in an ultra-minimal programming language that determines how to verify who has the right to spend these bitcoins.” Ethereum, on the other hand, supports the creation of smart contracts, the foundation argued. Smart contracts, in turn, are featured in applications that are “not financial in nature but simply use the blockchain as a source of high-assurance computation and data storage.”

Circle: Goldman Sachs-backed startup focused on making instant money transfers

Circle compared Bitcoin and Ethereum in the context of payment transactions, also explaining that, unlike Bitcoin, the Ethereum network supports additional tokens that utilize its

smart contracts feature:

"As with bitcoin, Ether can be used to pay for transactions and can be used for payments. Unlike bitcoin, tokens on the Ethereum network can be generated using smart contracts and can be used in smart contracts and transfers."

The Futures Industry Association: international trade organization for the futures industry with around 180 corporate members

The Futures Industry Association (FIA) also suggested that Ethereum is generally more versatile than Bitcoin, but warned the CFTC to measure additional risks caused by this difference.

The association stated:

"With the Ethereum Network’s architecture, risk management is potentially more complicated than for Bitcoin by orders of magnitude. Whereas Bitcoin is a payment unit on a shared and distributed ledger for transactions, Ether is a unit of work on a distributed functionality tool that offers super-computing power on the Ethereum Network, in exchange for value.”

Craig Wright: leader of Bitcoin SV, nChain chief scientist and self-proclaimed “Satoshi Nakamoto”

Craig Wright also reached out to the CFTC with a comment. Notably, in the introduction, he reiterated his previous claim that he is actually the original inventor of Bitcoin. Further, Wright harshly criticized Ethereum while arguing that Bitcoin can also support smart contracts in theory, but that ability was allegedly damaged by its

core developers:

"Ethereum is a poorly designed copy of bitcoin designed with the purpose of completing the promise of smart contracts and scripting that were delivered within bitcoin but which were hobbled by the core developers of bitcoin."

Would transitioning ETH to a proof-of-stake (PoS) consensus make it more prone to manipulation?

The Futures Industry Association Principal Traders Group: FIA’s lobby group that represents principal traders

The FIA’s Principal Traders Group suggested that, hypothetically, if Ethereum fully migrates to the PoS model, a participant could open up multiple validator accounts on its blockchain to their benefit. However, the community will still hold enough instruments to deal with such manipulation, the trading association argued, citing Vitalik’s views on

the proof-of-stake design:

“If a malicious group of validators attempted to prevent others from joining or executed a 51% attack, the community would simply coordinate a hard fork and slash the offending validators’ deposits. See Vitalik’s proof-of-stake design philosophy, where he addressed this issue, here.”

ConsenSys: blockchain tech company led by Joseph Lubin, Ethereum co-founder

ConsenSys argued that, “under the current proof?of?stake plans for the Ethereum Network,” the risk that someone succeeds in manipulating the Ethereum Protocol is low, and even lower than under the current proof-of-work

(PoW) system:

“In particular, any party that stakes ether to validate blocks on the Ethereum Network will have less of an ability to directly impact the network, even relative to their proportional ‘staked wealth,’ than miners on proof?of?work protocols relative to their proportional hash power. In fact, […] under the Ethereum Network’s planned proof?of?stake protocol, even if a validator controlled 1/3 of the entire ether staked in the protocol, the validator’s probability of obtaining enough control to do damage is less than one in one trillion.”


Circle also agreed that the PoS-based network is generally safer than PoW, arguing that the community would notice any suspiciously rapid increase in

the token’s value:

“Additionally, there may not be enough of a given PoS-based token’s supply on exchanges, so sourcing the liquidity necessary to purchase a majority of tokens may not even be possible.”

Craig Wright

The self-proclaimed Satoshi Nakamoto argued that “there is no working proof of stake-model,” and that “all proof of stake mechanisms collapse into single-user control and allow alteration rather than the creation of an immutable record.” He cited his experience of testing “the equivalent a proof of stake mechanisms” in 2003-2007 to support those statements.

What impediments or risks exist to the reliable conversion of Ether to legal tender?

ErisX: Chicago-based, Wall Street-backed crypto exchange

ErisX noted that Ethereum owners face certain problems like price volatility and liquidity risk related to finding ready counterparties with offsetting interest when looking to cash out on their tokens, “which is similar to other assets that are not legal tender.” Further, the exchange compared Ethereum to gold in the sense that it is difficult to convert both of those assets into the legal tender physically, while future contracts significantly

simplify that task:

“The efficiency that futures contracts introduce into the gold market enables gold owners to convert their assets into legal tender more efficiently and at better prices than may otherwise be available in the absence of the futures contract. Regulated futures markets can be similarly expected to benefit the Ether market.”

Coinbase: major U.S. crypto exchange

Coinbase essentially used this question to remind the agency that most risks associated with the conversion of cryptocurrencies into legal tender exist due to the unregulated nature of the crypto market. Ideally, the exchange continued, all trading platforms must follow thorough Anti-Money Laundering (AML) and Know Your Customer (KYC) policies, among

other factors.

“As with any freely-traded asset, the price of Ether can fluctuate based on a variety of factors. The greater the percentage of volume trading on the exchanges with capabilities listed above, the more that the market price will reflect true supply and demand for the product.”


Circle appeared more confident about the conversion of Ethereum into legal tender:

“There are not many impediments or risks associated with converting Ether to and from legal tender. Ethereum is one of the most liquid crypto assets available on spot trading platforms, and there are numerous trading platforms that also contain fiat on-ramps, including Coinbase, Gemini, Kraken, Bitstamp, itBit, HBUS (Huobi), and others.”

How would the listing or trading of derivative contracts on Ether affect the cryptocurrency itself?


ErisX stressed that the introduction of a regulated futures contract on Ethereum “would have a positive impact on the growth and maturation of the market,”


“The introduction of standardized futures contracts […] may have the effect of making the market more accessible, at lower risk, with lower volatility, for a larger, broader diversity of actors. This includes the potential for greater liquidity, more effective price discovery, and more efficient risk transference. A higher quality market invites greater participation, which can lead to increased quality in a positive feedback loop.”


“Generally, we believe the listing and trading of derivative contracts would be orthogonal to the functionality of the Ethereum Network, as networks are designed to be used independent of the existence of trading markets for their respective tokens,” Circle noted. The startup, however, continued by stressing that, under sufficient scrutiny provided by the CFTC, the risks associated with Ethereum derivative contracts should be mitigated.


The U.S. exchange argued that financially settled futures products “would not likely have a substantial impact on the Ethereum network.” In fact, Coinbase added, it could reduce price volatility, which, in turn, could result in “greater commercial usage.”


CFTC received mostly positive comments, large crypto players ask to regulate the industry

Overall, the CFTC received mostly positive feedback from crucial crypto and futures industry participants. The negative comments were provided mostly by a private individual — who put “Ethereum Fraud” under his company name, arguing that listing ETH futures would “validate fraud,” among other things — and Craig Wright.

The message from major U.S. crypto players such as Circle and Coinbase was clear: The industry needs more definite regulatory measures from the watchdogs. Interestingly, last week, CFTC Commissioner Brian Quintenz suggested that participants in the cryptocurrency market should create a self-regulatory structure, citing the CFTC’s lack of crypto statutory oversight capability. As Cointelegraph previously reported, the CFTC’s progress in reviewing Ethereum could have been significantly delayed due to the U.S. government shutdown in January.

Article Produced By
Stephen O'Neal

Stephen O'Neal is a Sociology major from Leeds. He's passionate about crypto and all the stuff you can spend it on.


Blockchain and the City: New York State as a Tough Model of Crypto Regulation

Blockchain and the City: New York State as a “Tough” Model of Crypto Regulation


Recently the New York Department of Financial Services (NYDFS) 

granted statewide virtual currency licenses to two applicants: stock trading service Robinhood and cryptocurrency ATM operator LibertyX. The state’s regulatory regime, commonly known as BitLicense, imposes a set of strict disclosure and consumer-protection requirements on any business that offers cryptocurrency-related services to New York residents. Since the framework was introduced in 2015, only a handful of companies had their applications approved by the NYDFS: The elite club of BitLicense holders now counts just 16 entities, the two newcomers included.

The state has also demonstrated that it keeps close tabs on those who might be in violation of the compliance procedures: In September last year, the New York state attorney general's office published a report that raised concerns over price manipulations that were possibly taking place on cryptocurrency exchanges, and referred three of them to the state’s financial regulator.

While many American states strive to appeal to crypto businesses by implementing lenient policies and easing red-tape pressures on industry startups, New York has championed a regulatory approach more rigorous than that of most nation-states. Many influential figures in crypto community are cross with what they perceive as a vast governmental overreach, yet there seems to be no shortage of firms still ready to take on the pains of obtaining the license. But in the big picture, is this type of regulatory climate that exists in the world’s financial capital beneficial for the crypto industry, mainstream adoption and the Empire State itself?

Reasons to comply

For any company somehow related to finance, the benefits of doing business in New York and with New York residents are obvious. The number of powerful financial institutions per square foot is staggering, the Wall Street money is just a glance away, and a consumer market of almost 20 million people is no small deal, either. This is especially true if you are a prominent player in the nascent fintech industry longing for mainstream adoption.

New York legislators in Albany are well aware of their jurisdiction’s unique position as a major financial hub, and have been long acting accordingly. Martin Weiss, founder of Weiss Research and Weiss Cryptocurrency Ratings, explained that the tendency for strict state-level regulation has a

long history:

“Traditionally, Albany has been tougher than many other states in regulating — insurance, for example. They are the toughest state in regulating financial markets, too. They see themselves responsible for keeping the financial center.”

In the case of crypto, Weiss argued, New York’s centrality to the world’s financial system is a powerful enough factor to overcome the logic of crypto regulation applicable to almost

any other territory:

“Cryptocurrencies are, in essence, borderless. Regulation, in order to catch up, would also have to be borderless, crossing not only state boundaries but also national boundaries. New York is in a unique situation because it regulates a major financial center, the largest in the world. So as long as all those corporations want to remain domiciled in New York, legislators in Albany do have a jurisdictional reach that sticks. In most places in the world, if you try to regulate cryptocurrencies, they’ll just move to another jurisdiction. That is bound to happen with most of cryptocurrency institutions. But that’s not the case with New York.”

Vigilant New York state authorities became concerned with Bitcoin regulation fairly early: Ben Lawsky, the state’s Superintendent of Financial Services, first sketched the contours of what would become BitLicense in July 2014. Regulations came into full effect almost a year after, forcing both existing and incoming players to either comply or quit.


Hardly surprisingly, not everyone took the news well. During the summer of 2015, big names such as BitFinex and ShapeShift pulled out of the New York market; crypto exchange Kraken announced cessation of services to New York residents in a blog post that called BitLicense “a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.” Erik Voorhees and Jesse Powell, the bosses of ShapeShift and Kraken, respectively, remained BitLicense’s staunch critics, calling for the regulation’s repeal ever since.

Aside from decrying the redundancy of regulation, opponents often point out how the pace at which licenses get approved is dismally slow — it is not uncommon for a company to wait for three years to be approved, as it happened with Genesis Global Trading. This part of the process alone can put smaller companies at a disadvantage. As Kevin Hobbs, CEO of the blockchain consultancy Vanbex Group,

told Cointelegraph:

“We believe that these strict regulations hinders cryptocurrency innovation in the Empire State. BitLicense is particularly restrictive for small companies to bear. Since only the largest companies possessing ample resources able to comply with the strict regulations. The BitLicense became effective in New York on June 24, 2015 but in the three years since then, only five crypto-related companies have been approved for a BitLicense in the state. Indeed, these one-size-fits-all regulations ultimately stifles innovation.”

Pushback from the more regulation-averse flank of crypto community has also received some political support: Larry Sharpe, a Libertarian Party candidate in the 2018 New York gubernatorial election, argued that the BitLicense regime serves to entrench the incumbent’s dominance in the market, and proposed to eliminate the licensing process. His bid in the November 2018 election, however, was unsuccessful.

Maybe it’s not that bad?

Those who are on board with the New York authorities’ rigorous policies toward cryptocurrency usually speak in the language of benefits to institutional and mainstream adoption. The idea is that the robust, large-scale crypto enterprises that prove capable of complying with the licensing requirements could draw the whole ecosystem closer to the core of the incumbent financial system that New York embodies. Robinhood, the recent addition to the pool of BitLicense holders, could definitely play this role. As Sky Guo, CEO of smart contract platform Cypherium,

put it:

“A great part of Robinhood’s value to our space will be as a leader in quasi-institutional compliance. New York is the center of traditional finance, and the state's licensing process — for good reason — prioritizes the integrity of its complex systems. For these reasons, Robinhood will be a great bridge between the two communities. Because Robinhood aims to open public access to traditional finance mechanisms, the company has a natural affinity for crypto projects and the DLT space in general.”

In addition to institutional-level shifts, Robinhood is poised to help the cause by adding a share of its regular stock users to the ranks of crypto community, notes

Eric Ervin, CEO of Blockforce Capital:

“Long-time cryptocurrency believers may not be migrating over to the Robinhood crypto platform anytime soon due to its lack of certain features that are available on other crypto trading platforms. However, the increased trust instilled by the issuance of the BitLicense may be enough to convince current Robinhood users who are on the fence to give the service a try. Robinhood’s significant user base in the state of New York will open the door to new crypto investors.”

Finally, there are signs that the Empire State’s regulatory framework is evolving into something more flexible and dynamic. More companies have seen their applications for a crypto license approved in the last year than in the previous three.  A seemingly lighter version of the approval process is now applied to companies seeking permission to offer crypto custody. According to reports from inside the state legislature, a task force is being assembled to focus entirely on digital currency. Guy Hirsch, Managing Director of trading platform eToro US,

told Cointelegraph:

“We think that New York regulators are making a genuine effort to make the state competitive for the blockchain era. BitLicenses have been approved on a more regular basis recently. NYDFS have issued several novel approvals for crypto custody. They also have put together a very clear Q&A on their website that provides a coherent framework for companies to buy, sell, hold, and transmit cryptoassets in a compliant manner.

“A lot of us think that the financial services industry will run on a blockchain. If this assumption turns out to be true then New York, being the financial capital of the world, has a vested interest in making sure it remains as such in decades to come.”

New York has gravitated toward a tight regulatory model that, at least according to the majority of state representatives, fits its status of the global financial center the best. In the years to follow, this model will enter a competition with alternative conceptions of how to do it. Martin Weiss hopes that this competition will ultimately yield a uniform, globally enforced


“What you’ll find is various jurisdictions experimenting with regulation: Malta, UK, Russia, Belarus — some taking a much more liberal attitude, some taking stricter attitudes — and over time, the model that works the best will become the predominant model globally. We’ll hopefully see a global regulatory regime enforced by supranational organizations like the IMF [International Monetary Fund] or the BIS [Bank for International Settlements] or something like that. New York is establishing a tough model.”

Article Produced By
Kirill Bryanov

Kirill Bryanov is a PhD researcher at Lousiana State University. His scholarly interests center on political and societal implications of communication technology, with a focus on blockchain-powered decentalized architectures.


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