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Consortium of Swiss Investors Launch Blockchain Incubator with $100 Million Goal

Cointelegraph By Ana Alexandre — Thu, 20 Sep 2018 19:03:00 -0400

Swiss-based Crypto Valley Venture Capital has launched a blockchain incubator, aiming to collect up to $100 million and replicate the incubator in other countries

Binance, Coinbase on Hiring Spree Despite Bear Market, Sign of Rapid Growth

Joseph Young — Thu, 20 Sep 2018 19:01:33 -0400

Binance and Coinbase, two of the largest cryptocurrency exchanges in the world by user base and daily trading volume, are on a hiring spree despite the 80 percent correction the crypto market experienced throughout 2018. Speaking to Bloomberg, Binance’s Chief Financial Officer Wei Zhou stated that the company is hiring 50 new employees in its

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UN Women to Use Blockchain Technology in Refugee Work Program in Jordan

Cointelegraph By Ana Berman — Thu, 20 Sep 2018 18:10:00 -0400

A UN organization for gender equality and empowering women, UN Women, will apply blockchain technology for dispersing payments at Jordanian refugee camps

Innosilicon’s Impending ASIC Miner Could Challenge Bitmain’s Dominance

Colin Harper — Thu, 20 Sep 2018 18:04:41 -0400

As controversies surrounding Bitmain’s looming IPO spell uncertainty for the future well-being of the mining goliath, competitors are fast to move in on the manufacturer’s territory.

One of these competitors, Innosilicon, now claims to have a new ASIC miner for bitcoin in the works that will outperform any current hardware in speed, profitability and efficiency.

Speaking to Bitcoin Magazine, an Innosilicon representative, who asked to remain anonymous, said its upcoming ASIC, the Terminator3 (T3), “has been in development since February of this year.”

Founded in 2006, the technology company, which produces various IP and IT hardware, has made significant headway in the mining arena. With 12+ years of experience building ASICs under its belt, Innosilicon’s team has shifted its focus in recent years to engineering ASIC miners for Litecoin, Zcash, Decred and Dash. They’re prototyping a machine for Ethereum, as well.

Innosilicon began producing Bitcoin ASIC miners this year, and it was among the first manufacturers to implement overt AsicBoost into its hardware. Seeing as roughly 5 percent of Bitcoin blocks today are mined using overt AsicBoost, Innosilicon’s machines likely account for most of this activity.

Enter the T3

Scheduled for release in December of 2018, the company’s third generation Bitcoin miner builds on its predecessor’s architecture with some added improvements.

“We experimented with many different recipes and options in the T2 Turbo to learn the optimal points of the process and circuit architecture. So there’s a combination of improvements to circuit architecture and process options for the T3.”

Purportedly consuming only 44 watts of power per tera hash (44W/TH), the T3 could become the most energy-efficient miner on the market when it is released. With its single tube design and a power consumption of roughly 2100w, the miner achieves its efficiency with help from a processing chip similar to the groundbreaking design Samsung developed for its smartphones last year. The representative declined to specify whether it is an 8 or 10 nanometer chip, stating the exact specs will be revealed after production and before shipment.

This chip, and the low energy use it promises, should outfit the T3 with near-unmatched voltage, the source claimed. Like the T2 Turbo that came before it, the new model will be one of if not “the only ASIC design in the world to operate at approximately 0.35 volts.” To put this into perspective, the Apple and Intel processing chips that power most of the world’s computers and smart devices run at approximately 0.6 volts, and Bitmain’s s9 ASIC operates at 0.41.

Stacking Up

This same metric means that the T3’s hashrate will capitalize on its energy efficiency. At 43 tera hashes a second (Thash/s), our source claimed the T3 will sport the fastest hashrate on the market. If this promise holds up in practice, this would make the T3 “200 percent faster than Bitmain’s s9,” the representative said.

These specs would have the T3 outperforming top-shelf hardware from other rivals as well. Founded in 2016 by Yang Zuoxing, Bitmain’s former head of design, Bitwei claims that its WhatsMiner M10 will be the most energy efficient on the market. But even with its still-impressive 66-68 W/TH — a figure that Innosilicon’s T2 Turbo-32T matches — the WhatsMiner M10 could lag behind the T3 if Innosilicon’s forthcoming product lives up to its potential. As described by our source, the T3’s design positions it most closely to Bitfury’s newly released ASIC chip. The Bitfury Clarke, as it’s called, is a 14 nanometer chip that promises a power efficiency of 55 milijoules per giga hash (mJ/GH) and a voltage requirement of 0.3v.

The circuit architecture behind the T3 was built from the ground up, the representative said, though Innosilicon took notes from Samsung’s manufacturing process. The South Korean electronics company made its entrance into the cryptocurrency space this year when it revealed it was producing ASIC processing chips for Halong mining.

“Samsung is our manufacturing process provider, not our design partner. We used some of their production line to experiment different combinations, so we use their nanometer chip process to invent and architect our own circuits. The circuit design is ours; the process model is mostly from them with our own data calibration.”

The representative indicated that the T3 will likely cost the same as the T2 Turbo ($1,568), if not “slightly higher,” continuing to say that the company will gauge production “depending on demand.”

In a bid to produce the most efficient hardware on the market, Innosilicon will continue to seek out innovative technologies. Our source believes that the recent bear market exposes the need for such innovations. Not only do they help miners retain profit potential, but they also push manufacturers to produce greener products to guide the community toward more sustainable solutions.

“I’d like to emphasize that currently there is a landscape change in terms of cryptocurrency mining because of the bear market and more focus on technological innovations. Previous products have been in the product for too long, and these are becoming defunct because they can’t pay the electric bill. It is important to pick the right product in the future to be more green, to sustain the growth of the bitcoin mining industry. For us, our goal is to keep innovating and to keep supporting the blockchain community.”

This article originally appeared on Bitcoin Magazine.

Cryptojacking is up 459% in 2018, and it’s the NSA’s Fault

Conor Maloney — Thu, 20 Sep 2018 18:02:53 -0400

A report from the Cyber Threat Alliance (CTA) indicates a massive 459% increase in the rate of illegal cryptojacking, through which hackers hijack computer processing power to mine cryptocurrencies like bitcoin and monero. As CCN recently reported, the Indian government was recently targeted in a cyberattack which hijacked processing power from government website servers to … Continued

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Newest Crypto Exchange Offers Multiple Currencies Via One Book

Nick Marinoff — Thu, 20 Sep 2018 17:05:52 -0400

The crypto world is welcoming its newest digital currency exchange. Known as BTSE, it’s a platform designed primarily to look after markets and OTC trading. The system is unique in the sense that it offers multiple currencies through one book, and entities like the U.S. dollar, the euro and the Japanese yen all share the same liquidity pool.

Co-founder Jack Li spoke with Bitcoin Magazine about how the exchange works and what its overall purpose is in offering a multi-currency platform.

“Even though there has been some consolidation amongst the existing exchanges, the industry is still largely fragmented and localized,” he commented. “Our goal in offering a multi-currency platform looks to address some of these issues through the aggregation of liquidity.”

Upon registering with BTSE, a user can select their base currency from a list of 18, which includes USD, EUR, KRW, MYR, PHP and many others. Users can then transfer any currency to the platform or trade in their base currency for crypto, while all liquidity is sourced from the same USD orderbook.

“Other exchanges that offer multiple books often struggle with liquidity in their secondary books,” Li stated. “This innovation aims to resolve that issue. If a deposit is sent in a currency we do not yet support, it will automatically be covered at system rate.”

BTSE also has a marketplace where verified merchants can offer their services and users can choose to engage directly. Li says this provides faster turnaround times for deposits and withdrawals while empowering users with greater flexibility. Users can also engage in bilateral transactions amongst themselves.

“At launch, we aim to offer a fully escrowed DVP [delivery versus payment] functionality where users can determine the terms of their transactions (prices, quantities, types of assets or currencies, etc.), and we’ll take care of the settlement within our highly encrypted and trusted environment,” Li said.

At press time, the company is in the process of applying for a VFAA (Virtual Financial Assets Act) class 4 cryptocurrency exchange license from the Republic of Malta and has already received principle approval to operate within their sandbox environment. Furthermore, BTSE has been granted a general commercial trading license and a payment services provider license from the Dubai government in the United Arab Emirates.

“As a platform tailored towards fulfilling the needs of professional traders and institutional investors, usability and reliability are at the core of BTSE’s ethos,” Li said. “Some of the features you will find on our platform include hidden orders, index pegged orders, and of course, our very own BTSE 5 (core coin), BTSE 10 (altcoin), and the BTSE Single Token indexes, which cover prices for currencies like bitcoin, ether, bitcoin cash and litecoin. In the future, we also plan to offer full-fledged capital market services, as well as structured products once the relevant licenses are in place.”

BTSE 5 is an index covering the values of the top five largest cryptocurrencies, while the BTSE 10 index does the same for the industry’s top 10 performing altcoins.

This article originally appeared on Bitcoin Magazine.

SEC Begins Reviewing Physically-Backed Bitcoin ETF, Will Examine 1,400 Comments

Josiah Wilmoth — Thu, 20 Sep 2018 16:57:11 -0400

The U.S. Securities and Exchange Commission (SEC) announced on Thursday that has begun a formal review process for the physically-backed bitcoin ETF proposed by VanEck and SolidX. According to the order dated Sept. 20 and published on the SEC’s website, the regulatory agency will now consider whether, pursuant to federal securities guidelines, it should approve … Continued

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Streaming Platform for Gamers Starts Public Beta Testing of Its Own Blockchain

Cointelegraph By Kira Egorova — Thu, 20 Sep 2018 16:55:00 -0400

Earning money on streaming games may become easier not only for streamers or organizers but for viewers as well. A platform launches its own blockchain to give all participants the option to monetize on streaming #SPONSORED

In First Half of 2018, Japan Counts $540 Million Lost to Crypto Thefts

Amy Castor — Thu, 20 Sep 2018 16:45:51 -0400

When Tokyo-based Mt. Gox got hacked to the tune of 650,000 bitcoin in 2014, Japan learned early on the tough lessons of cryptocurrency theft. Yet, to this day, despite the country’s ongoing efforts to educate investors and ramp up oversight of crypto exchanges, it still feels the sting of hackers.

On September 20, 2018, on the heels of the Osaka-based Zaif heist, which amounted to $60 million in losses, the country’s National Police Agency (NPA) issued a report of cryptocurrency thefts involving exchanges and individual crypto wallets for the first half of 2018. Japanese news outlet Asahi Shimbun was the first to report on the information.

According to police authorities, during the first six months of 2018, cyber thieves made off with a startling $540 million (60.503 billion yen) in cryptocurrency. Of the stolen money, $58 million came from exchanges, while the remaining $22 million was taken from individual crypto wallets.

During this time period, there were 158 instances of theft — triple the number for the same period last year. In fact, the entirety of 2017 saw 149 breaches, amounting to losses of only $6 million.

NEM coin accounted for the share of the hacked funds, with the majority being taken in the Coincheck breach earlier this year. Bitcoin losses of $7.66 million resulted from 94 breaches. Ripple (XRP) accounted for $13.5 million of the losses and 42 instances of theft.

Finally, 14 cases of theft involved ether, the native cryptocurrency of the Ethereum platform, totalling losses of about $542,000.

Sixty percent (102 incidences) of the 158 total reported incidences were due to individuals using the same ID and password for their cryptocurrency accounts as they did for email and online shopping — a no-no for anyone trying to safeguard online assets.

Lessons were learned in the Coincheck heist. After the rattling event, Japan’s financial watchdog, the Financial Services Agency (FSA) kicked up efforts to bring exchange operators in line with newer security measures, brought on by laws that went into effect in April 2017.

Between January 2018 and March 2018, 76 percent (120 cases) of crypto thefts were reported. After that, due in part to the NPA encouraging people to use better passwords, the number of crypto thefts dropped. And between April 2018 and June 2018, only 38 cases were reported.

Tech Bureau Corp, the company that operates Zaif cryptocurrency exchange, received two warnings from the NSA this year for its lax security measures and is likely to receive another, as regulators do their utmost to reduce cryptocurrency losses in the country.

This article originally appeared on Bitcoin Magazine.

SEC Moves to Make Decision on VanEck-SolidX Bitcoin ETF Proposal

Nikhilesh De — Thu, 20 Sep 2018 16:43:03 -0400

The U.S. Securities and Exchange Commission (SEC) is now weighing whether to approve the nation's first bitcoin-based exchange-traded fund.

Congressional Committee Calls for Clearer Crypto Tax Code in Letter to IRS

Colin Harper — Thu, 20 Sep 2018 16:35:24 -0400

In an open letter to the Internal Revenue Service (IRS), the U.S. House’s Committee on Ways and Means argues that the tax collection body is leaving investors in the lurch with its vague cryptocurrency tax codes.

Authored by congressional representatives Kevin Brady, Lynn Jenkins, Darin LaHood, David Schweikert and Brad Wenstrup, the letter, addressed to Acting Commissioner David Kautter, calls on the IRS to devise a more concrete cryptocurrency taxing scheme than the one it currently enforces.

Opening with reference to a similar letter the Committee sent to the IRS on May 17, 2017, the lawmakers opine that, more than a year later, the IRS has done little to guide taxpayers through the process of paying capital gains taxes on their cryptocurrency investments, even though it’s been ramping up enforcement all the while.

“... the IRS continues to expand its enforcement activities without issuing any further guidance for taxpayers. We, therefore, write again today to strongly urge the IRS to issue updated guidance, providing additional clarity for taxpayers seeking to better understand and comply with their tax obligations when using virtual currencies,” the letter reads.

It continues to argue that, since the inception of bitcoin, the IRS has “struggled” to formulate a taxation strategy to accommodate cryptocurrencies. Noting that the agency said cryptocurrencies would be taxed as property in 2014, something the IRS Commissioner at the time called “preliminary guidance,” the lawmakers claim that “to date, the IRS has not issued any additional guidance that taxpayers may rely upon to better understand their tax obligations.”

And the legislators state that they are not alone in their concerns. Since 2016, the letter indicates, multiple organizations have contributed to the conversation, alluding to calls-to-action by The Association of International Certified Professional Accountants, the American Bar Association and the Treasury Inspector General for Tax Administration for the IRS “to develop a comprehensive virtual currency tax strategy.”

The authors state that the IRS, despite lack of a clear strategy, has made cryptocurrency taxation a focal point of enforcement. In 2016, for instance, the agency issued Coinbase a John Doe Summons to collect information on nearly half a million Americans who invested in cryptocurrencies from 2013 to 2015. In addition to this action, in July of 2018, it launched a campaign to target those who have not complied with its mandates.

By failing to help investors properly navigate new ground, the letter draws the conclusion that the IRS “severely hinders taxpayers' ability to [comply].” As such, it calls for “the IRS to expeditiously issue more robust guidance clarifying taxpayer obligations,” arguing the agency has had “more than adequate time” to do so.

In its final paragraphs, the letter requests that the agency provide the Committed additional information toward this end no later than October 17, 2018. It also states that the Committee will request the Government Office of Accountability to audit the situation to glean a better understanding of the matter.

This article originally appeared on Bitcoin Magazine.

IBM Patent Eyes Blockchain for Drone Fleet Security

Josiah Wilmoth — Thu, 20 Sep 2018 16:27:51 -0400

Computing giant and prolific blockchain researcher IBM has applied to patent a system that would use distributed ledger technology (DLT) to address privacy and security concerns associated with the increasing usage of drones in both commercial and recreational applications. According to documents made public on Thursday by the US Patent and Trademark Office (USPTO), IBM … Continued

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5 Members of Congress ‘Strongly Urge’ IRS to Update Bitcoin Tax Guidelines

Josiah Wilmoth — Thu, 20 Sep 2018 15:41:26 -0400

A group of U.S. legislators has asked the Internal Revenue Service (IRS) to provide updated guidelines on how taxpayers should report profits associated with investing in bitcoin and other cryptocurrency assets. Republicans Criticize IRS for Enforcing Tax Law without Clear Guidance In a letter dated Sept. 19 and published on the House Ways and Means … Continued

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Major Russian Banks Highly Interested in ‘Working With Crypto,’ Local Sources Say

Cointelegraph By Ana Berman — Thu, 20 Sep 2018 15:35:00 -0400

Major Russian banks admit high demand for crypto, even as a lack of clearly defined regulations prevents them from entering the market, local sources report

Enigma Delays Release of 'Discovery' Protocol on Ethereum Mainnet

David Floyd — Thu, 20 Sep 2018 15:30:08 -0400

The next stage in the privacy protocol's roadmap will no longer occur in Q3, according to the company.

US Lawmakers Say IRS Too Focused on Enforcement, Should Provide Clarity for Crypto Taxation

Cointelegraph By Marie Huillet — Thu, 20 Sep 2018 14:15:00 -0400

U.S. lawmakers have urged the Internal Revenue Service (IRS) to issue clear and “comprehensive” crypto taxation guidance, saying it is overly focused on enforcement

Quick Brew? Bitfury's Coffee Machine Accepts Bitcoin Via Lightning Network

Nikhilesh De — Thu, 20 Sep 2018 14:00:12 -0400

A Bitfury-led engineering team has created a coffee vending machine capable of accepting bitcoin payments through the Lightning Network.

Kraken CEO Powell ‘Thanks’ New York AG For Its Crypto Research

Lester Coleman — Thu, 20 Sep 2018 13:25:32 -0400

Jesse Powell, CEO of Kraken, doesn’t like the way the New York State cryptocurrency regulators have treated him, but he doesn’t think their research is without its merits. After calling the regulators abusive in an earlier tweet today, he followed up by tweeting that the agency’s research in a recently released report has saved his

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Just a Cycle? Big Bitcoin Miners Stay Positive in Face of Market Slump

Wolfie Zhao — Thu, 20 Sep 2018 12:45:36 -0400

Executives from several bitcoin mining firms have said at Consensus Singapore that they are not concerned by current low crypto prices.

Another Cryptocurrency Exchange Hack Hits Japan

Amy Castor — Thu, 20 Sep 2018 12:30:35 -0400

Another cryptocurrency heist has shaken Japan. This time, 6.7 billion yen ($60 million USD) worth of company and user funds have vanished from Japanese cryptocurrency exchange platform Zaif.

Tech Bureau Corp, the Osaka-based company that operates Zaif, estimates the heist occured on September 14, 2018, between 5 p.m. and 7 p.m. local time. The exchange detected the breach on September 17, 2018, and reported the event to authorities the following day.

Of the stolen money, the hacker siphoned 4.5 billion yen (about $40 million USD) from user accounts and 2.2 billion yen (just under 19.5 million USD) from the company’s own assets. The three virtual currencies stolen include bitcoin, monacoin and bitcoin cash. Of those, $37.8 million were bitcoin funds (5,966 BTC).

Tech Bureau Corp will be able to tell the exact number of bitcoin cash and monacoin stolen once it gets its servers back up. All the cryptocurrency was taken from a server managing its hot wallet. A hot wallet refers to a wallet that remains online for immediate transactions. In contrast, a cold wallet represents more secure, long-term storage that is kept offline.

Japan’s Financial Services Agency (FSA) has already issued two business improvement orders (one in March 2018, the other in June 2018) to Tech Bureau Corp for its lax management structure. Now the financial watchdog is considering issuing a third warning, reports the Japan Times.

The exchange has suspended all services for now but plans to get back online once it has secured its network. It also intends to pay back its customers and has already secured a 5 billion yen ($44.5 million) loan from Fisco Digital Asset Group. In addition, Tech Bureau Corp will sell a majority stake of its company to Fisco, which owns its own exchange. According to Japan Times, Fisco will send in directors and an auditor while Tech Bureau’s own managers will resign over the incident.

The hack represents another setback in a country that has been trying to regulate its cryptocurrency exchanges with the same level of oversight it does banks. Early this year, Tokyo-based Coincheck saw a loss of $530 million worth of NEM tokens. That hack represented one of the largest financial losses since the introduction of bitcoin. Coincheck has since been acquired by Monex.

Since April 2017, Japan has required all of its crypto exchanges to be licensed. Both Coincheck and Tech Bureau Corp were founded in 2014, before the new laws went into effect. Coincheck was not fully licensed at the time it was hacked, but Tech Bureau Corp is a registered exchange.

This article originally appeared on Bitcoin Magazine.

Charlie Lee Defends Litecoin Against ‘FUD’ from Short-Sellers

Josiah Wilmoth — Thu, 20 Sep 2018 12:28:24 -0400

Litecoin creator Charlie Lee is striking back at what he calls a “concerted effort to suppress” the LTC price on the party of bearish traders and hedge funds who are attempting to short the coin. Writing in a thread posted on Twitter, Lee — who created LTC in 2011 and now develops it full-time — … Continued

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Why Your Financial Advisor Won't Talk to You About Bitcoin

Eric Jansen — Thu, 20 Sep 2018 12:18:02 -0400

Bitcoin is in the news, and we’ve all seen the stories about early investors who’ve made millions and driven away in new lambos. So it’s only natural that people who haven’t invested already are wondering if they should. Unfortunately, when they turn to their financial advisors for help, they’re often let down by professionals who can’t or won’t discuss it. Why won’t more financial advisors talk to their clients about bitcoin and other cryptocurrencies? Here are several explanations.

Your Advisor’s Firm Forbids Recommending Cryptocurrency

Merrill Lynch, Morgan Stanley, JPMorgan and Wells Fargo reportedly do not allow their financial advisors to make cryptocurrency recommendations to clients. Wells Fargo only allows advisors to give their clients research primers on digital currencies, and Merrill Lynch bans its advisors from trading bitcoin futures and Grayscale’s Bitcoin Investment Trust.

Other advisors who aren’t banned from discussing crypto with clients are hiding behind their “fiduciary” duties. That's hogwash. An advisor’s fiduciary duty requires them to act in their clients’ best interests.

In the case of cryptocurrency, that duty should mean providing well-informed, unbiased information, not refusing to discuss it or to make recommendations about potential investments. Adding an alternative asset such as bitcoin to an investment portfolio can provide an additional source of uncorrelated alpha, the holy grail of investment portfolio allocation.

Although bitcoin is a highly volatile and relatively nascent investment vehicle, speculative and alternative investments are used quite frequently in the investment world — think commodities, precious metals and master limited partnerships. Although bitcoin isn’t right for everyone’s portfolio, for those with higher risk tolerance levels, allocating a small portion to this emerging asset class should be, at a minimum, a discussion point with their financial advisor.

Some Financial Advisors Don’t Understand Bitcoin

Most financial advisors, like much of the population, have at least heard of bitcoin, but many have not taken the time to research it on their own; instead, they rely on watercooler conversations or the most recent sensationalist media story to form their opinions. While that approach may be fine for someone with just a passing interest in bitcoin, it’s not acceptable for someone who works in the world of money and investment management.

Although bitcoin and cryptocurrencies have a technical aspect that can be difficult to wrap your head around if you don’t have a background in cryptography or programming, there are plenty of other concepts that financial advisors generally learn about that aren’t always easy to understand either, such as options, futures, swaps, derivatives and short positions.

It may not be the perceived level of difficulty, then, that’s keeping financial advisors from learning about bitcoin. Rather, they might have bought into the narrative that bitcoin is a scam or a fad. Scams have been perpetrated, no doubt. Hackers have siphoned money from cryptocurrency exchanges, leaving customers with empty online wallets. Fraudsters have raised money through false initial coin offerings and then disappeared. But these events do not make investing in cryptocurrency a scam any more than Bernie Madoff’s pyramid scheme made investing in the stock market a scam. True, we don’t yet know whether bitcoin or any other cryptocurrency will have long-term value or whether someone who invests in bitcoin today will be thrilled with or devastated by that investment five years from now.

Beyond the technical aspects of bitcoin and the blockchain, its underlying technology, financial advisors need to take the time to understand why bitcoin was invented in the first place and what problems it was designed to solve with our current antiquated global monetary and payments system. As the world’s first truly borderless digital currency, its potential to disrupt the current status quo in banking and finance is only beginning to be understood.

Further to this point, like it or not, education in the field of cryptocurrency investment is about to become mandatory for financial advisors looking to obtain the coveted and difficult-to-earn Charter Financial Analyst Designation (CFA). The CFA Institute recently announced that, beginning in 2019, cryptocurrency and blockchain topics will be part of the exam, indicating that these topics are important enough that advisors who use its letters should understand them.

The Bitcoin–Blockchain Connection

What we do know is that bitcoin’s underlying blockchain technology is likely to be one of the biggest innovations of our time. Blockchain technology is considered to be on par with the internet regarding the impact it will have on our world. What we’re just beginning to experience is being called the fourth industrial revolution.

Forward-thinking companies — and these aren’t limited to startups — are implementing blockchain solutions to improve everything from supply-chain management to cross-border payments to securities settlements.

JPMorgan and Morgan Stanley, despite their mandates to their financial advisors, are investing in bitcoin-linked, exchange-traded notes, which Goldman Sachs and Barclays are also reported to have invested in. And Goldman-funded, blockchain tech startup company Circle has acquired a major cryptocurrency exchange, Poloniex. These are just a few examples.

Advisors should be able to speak intelligently with their clients about whether they might want to invest in companies that are ahead of the curve in developing and deploying this new technology. True, anyone who invests in an S&P 500 fund already has exposure to some of these companies, but many of the most promising use cases are being developed by lesser-known companies and numerous startups worldwide.

Well-informed advisors should be comfortable discussing not only the pros and cons of investing in bitcoin but in answering questions regarding investment opportunities in blockchain-focused ETFs, as well as individual companies and projects developing new and compelling blockchain use cases.

Your Financial Advisor May Be in Denial

Financial advisors may be in denial about these changes, partly due to its potential disruptive impact on the very way they make a living today, perhaps. Cryptocurrency and blockchain technology, combined with artificial intelligence, could change how financial advice is delivered and how financial products are sold and marketed. Financial advisors may have to work harder and find new ways to deliver value to their clients.

Providing investment management alone may not be sufficient, as that work is increasingly being done by algorithms that construct and manage portfolios for clients automatically. And individuals increasingly have direct access to diversified investments with rock-bottom fees, meaning they don’t necessarily need an advisor to place buy or sell orders for them.

These changes are already well underway, and advisors who don’t adapt in the next three to five years could become obsolete, especially as younger, tech-savvy consumers make up an increasingly larger part of the market. People skills like empathy and compassion, teaching and motivating, could become more important than the ability to analyze investments.

Furthermore, clients who continue to find value in one-on-one professional financial advice may be able to more easily transfer their assets from one advisor to another using blockchain technology, a shift that will require advisors to do more to provide exceptional service if they want to keep their clients.

Your Advisor Doesn’t Earn a Commission or Fee on Bitcoin

Former long-term Merrill Lynch financial advisor Jack Tatar, the co-author of the book “Cryptoassets,” feels big brokerage firms are shortchanging clients by not discussing bitcoin with them. I couldn’t agree more. Why aren’t they discussing it?

In addition to the reasons stated earlier in this article, the real reason the financial services industry isn’t high on bitcoin is because they didn’t create it and aren’t set up to make money from it. Indeed, if your advisor were to recommend that you buy bitcoin, he or she would not earn a commission on the transaction. So why bother discussing it right? Wrong.

While many independent financial advisors are fee-only, registered investment advisors who could, if they so chose, offer fee-based consulting services to help clients better understand bitcoin, the options for buying it, safely storing it, etc., very few seem to be doing so. As a result, most individuals are not getting the advice they need and want when it comes to getting involved, or not, with bitcoin.

Conclusion

Financial advisors should be willing and able to discuss bitcoin and cryptocurrencies with their clients in the same way that they discuss other alternative investments such as gold, hedge funds and real estate investment trusts. Even if they don’t want to recommend investing in bitcoin, ether, litecoin and the like, they should at least inform their clients about how they work, the pros and cons of purchasing them, and where they can seek additional trustworthy information.

Not doing so is irresponsible. It’s easy to lose money on cryptocurrency if you don’t understand the risks, which go beyond the typical investment risks most people are familiar. With cryptocurrencies, you need to understand a whole new set of risk factors, including the risk of your digital assets being stolen if left on an exchange that gets hacked, and the risks associated with the loss or theft of your private keys, to name a few.

Individuals looking to invest in bitcoin or other crypto assets should seek out advice from financial advisors who are well versed in this arena and who can provide invaluable guidance in helping them safely navigate the complexities of investing in bitcoin and other crypto assets.

This is a guest post by Eric C. Jansen, founder, president and chief investment officer at AspenCross Wealth Management. It is provided for informational purposes and should not be construed as legal advice. Views expressed are their own and do not necessarily reflect those of Bitcoin Magazine or BTC Inc.

This article originally appeared on Bitcoin Magazine.

Op Ed: Why Your Financial Advisor Won't Talk to You About Bitcoin

Eric Jansen — Thu, 20 Sep 2018 12:18:02 -0400

Your Advisor’s Firm Forbids Recommending Cryptocurrency

Some Financial Advisors Don’t Understand Bitcoin

The Bitcoin–Blockchain Connection

Your Financial Advisor May Be in Denial

Your Advisor Doesn’t Earn a Commission or Fee on Bitcoin

Conclusion

This is a guest post by Eric C. Jansen, founder, president and chief investment officer at AspenCross Wealth Management. It is provided for informational purposes and should not be construed as legal advice. Views expressed are his own and do not necessarily reflect those of Bitcoin Magazine or BTC Inc.

This article originally appeared on Bitcoin Magazine.

Can Crypto Record a 1,000x Return and Reach $200 Trillion Market Cap?

Cointelegraph By Joseph Young — Thu, 20 Sep 2018 12:05:00 -0400

CZ, Vitalik Buterin, and prominent investors talk about the possibility of crypto market achieving $200 trillion in the long-term

RBS Blockchain Team Jumps Ship to Build New Startups Using R3's Corda

Ian Allison — Thu, 20 Sep 2018 11:35:37 -0400

A blockchain team from Royal Bank of Scotland (RBS) has left to start a "venture studio" called Chorum from which full-blown startups an be spun out.

Bitcoin Price Intraday Analysis: BTC/USD Gaining Towards $6500-Fiat

Yashu Gola — Thu, 20 Sep 2018 11:28:36 -0400

Bitcoin on Thursday improved its bullish bias by rising over 1.5 percent against the US Dollar. The BTC/USD on BitFinex is trading at 6421-fiat while continuing its bullish retracement from 6100-fiat, our intraday low. The pair kickstarted the Asian session while forming lows towards 6382-fiat. It consolidated sideways throughout the said session within a strict trading … Continued

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Kraken Joins Coinbase in Rebuking ‘Malicious’ Implications in New York Attorney General’s Exchange Report

Cointelegraph By William Suberg — Thu, 20 Sep 2018 11:25:00 -0400

Cryptocurrency exchange Kraken has come out fighting after a NY Attorney General’s report called certain aspects of its operations “alarming”

Up 13%: XRP Jumps By Double Digits for Second Time This Week

Sam Ouimet — Thu, 20 Sep 2018 11:24:33 -0400

XRP is a standout performer today in the cryptocurrency market as its price boasts double-digit percent gains for the second time this week.

Australian Financial Regulator Issues Warning on ‘Misleading’ ICOs

Cointelegraph By Ana Berman — Thu, 20 Sep 2018 11:15:00 -0400

Australian financial regulator urges investors to proceed carefully with ICOs, as they might be “misleading” and “deceptive”

“Someone’s Got to Be the Voice of Reason” — Kraken Responds to NY AG Report

Amy Castor — Thu, 20 Sep 2018 11:10:46 -0400

The New York Attorney General’s office has pointed a finger at cryptocurrency exchange Kraken for “potential” violation of state regulations. Now, the San Francisco–based exchange is firing back, saying it does not appreciate what it sees as implications of illegality.

“Someone has to be the voice of reason,” Jesse Powell, Kraken’s outspoken co-founder and CEO, told Bitcoin Magazine. “If we all accept corrupt practices as the norm, without saying anything out of fear of unlawful retaliation, what the hell are we doing this for?”

In April 2018, as part of its Virtual Markets Integrity Initiative, the New York Attorney General’s office sent out a voluntary questionnaire to 13 exchanges as part of a “fact-finding inquiry.” Kraken and three other exchanges chose not to respond.

“If you want to talk to us, ask us for a phone call, fly yourself out to San Francisco, invite us for lunch at your office,” Powell said.

Fast-forward five months and the New York Attorney General’s office has now issued its report on the results of the questionnaire. Within the report is a paragraph stating that the office has “referred Binance, Gate.io, and Kraken to the Department of Financial Services for potential violation of New York’s virtual currency regulations.” The implication was that Kraken could still be allowing New York residents to trade on its platform without a proper license.

Three years ago, New York instituted a requirement that any company dealing with cryptocurrency in the state must have a BitLicense. Rather than apply for one, Kraken, based in New York at the time, hit the road, calling the law “a creature so foul, so cruel that not even Kraken possesses the courage or strength to face its nasty, big, pointy teeth.”

Now, safely tucked 3,000 miles away in the Bay State, Kraken still feels haunted by the Big Apple.

NY is that abusive, controlling ex you broke up with 3 years ago but they keep stalking you, throwing shade on your new relationships, unable to accept that you have happily moved on and are better off without them. #getoverit https://t.co/DC5S1WyRnp
— Jesse Powell (@jespow) September 19, 2018

After reading the New York Attorney General’s entire 42-page report, Powell asserts that there isn’t “any mention of evidence that we are still doing business with NY residents.” (In fact, the report mentions Kraken only twice, both times on page 2.) Instead, it appears that the New York Attorney General is tossing the matter over the wall to the New York State Department of Financial Services (NYDFS) to see if they can come up with anything.

Powell doubts they will. “We recently spoke to NYDFS; they are aware we are not serving New York,” he said.

Kraken uses a five-tiered system to identify clients. Tier 0, verified by email only, lets clients enter the site and poke around. If clients want to trade cryptocurrency, per Tier 1 requirements, they have to supply “full name, date of birth, country and phone number.”

At Tier 1, the exchange “does not collect identity documents,” Powell says, but it does do other checks, like look up a person’s IP address to deduce their location and verify phone and address. “If any of our checks fail or our info indicates that the user is in a prohibited geo, they are required to provide identity documents and undergo enhanced scrutiny,” he said.

Powell think the Attorney General’s report was good in that it highlighted important questions consumers should be asking exchanges. However, he thinks calling out the exchanges who chose not to respond to the questionnaire unnecessary.

“After all,” he said, “there are hundreds more exchanges which were never asked and are not named.”

Regulatory clarity in the U.S. is important to the growth of the cryptocurrency industry — as long as that regulation is reasonable, he said. “We operate in a global market and regulators must be careful not to stifle domestic business while giving foreign businesses a competitive advantage.”

As for Kraken, Powell claims his exchange operates with high standards. “Much of what the regulators imagine should be done is already being done voluntarily,” he said. “We push back only where we have a strong view that the regulator is getting the issue wrong, and where the consumer might actually be put in a worse position, or where a government agency is dramatically overstepping bounds.”

Powell summed up: Although Kraken is happy to work with regulators and law enforcement, “we will not stand by silently while rights are trampled on.”

Regardless, calling out regulators, who tend to wield a lot of power in the space, is a bold move for an exchange contemplating listing 1,600 new coins.

This article originally appeared on Bitcoin Magazine.

Japan: Crypto Thefts Have Tripled This Year, Totalling $540 million So Far

Cointelegraph By Marie Huillet — Thu, 20 Sep 2018 10:50:00 -0400

Japan’s National Police Agency says $540 million worth of crypto was stolen in the first half of 2018, with the number of reported crypto thefts already triple that of 2017

Ripple Soars as Wider Crypto Markets See Flush of Green

Cointelegraph By Marie Huillet — Thu, 20 Sep 2018 10:40:00 -0400

Ripple skyrockets over 15 percent, as virtually all of the large-market-cap cryptocurrencies see green today

Kraken Trolls NY Regulators, Accuses OAG of Manipulating Bitcoin Futures

Josiah Wilmoth — Thu, 20 Sep 2018 10:23:03 -0400

Cryptocurrency exchange Kraken is not backing down from its standoff with the New York attorney general’s office (OAG). Crypto Exchange Asks Whether OAG Employees Manipulated Bitcoin Futures In a series of tweets published over the last two days, the San Francisco-based company, which operates the world’s largest 16th-largest cryptocurrency exchange as measured by daily volume, … Continued

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US Lawmakers 'Strongly Urge' IRS to Update Crypto Tax Guidance

Nikhilesh De — Thu, 20 Sep 2018 10:06:04 -0400

U.S. lawmakers are calling on the Internal Revenue Service to provide clear guidance on how cryptocurrency-related taxes will be calculated.

Crypto Exchange Coinbase: We Don’t Engage in Proprietary Trading

Josiah Wilmoth — Thu, 20 Sep 2018 09:21:58 -0400

Cryptocurrency exchange operator Coinbase has denied that it engages in proprietary trading and that these activities account for a large percentage of the firm’s overall trading volume. CCN reported yesterday that an investigation into cryptocurrency exchange policies and operations, published this week by the New York attorney general’s office (OAG), found that proprietary trading, through

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Bitfury Reveals New Generation of Bitcoin ASIC Chips

Anna Baydakova — Thu, 20 Sep 2018 09:00:02 -0400

Bitfury Group unveiled a new generation of bitcoin mining ASICs on Wednesday, boasting greater efficiencies than previous models.

Ripple Surges by 36% in 48 Hours as Crypto Market Adds $2 Billion

Joseph Young — Thu, 20 Sep 2018 08:23:35 -0400

Over the past 24 hours, major cryptocurrencies in the global market including Bitcoin, Ethereum and EOS increased by 2 to 5 percent, as Ripple led the market with a solid 10 percent gain. Since September 18, within 48 hours, the price of XRP, the native cryptocurrency of the Ripple blockchain network, rose by more than

The post Ripple Surges by 36% in 48 Hours as Crypto Market Adds $2 Billion appeared first on CCN

One of Investors' Favorite Governance Blockchains Is Handing Over $20 Million

Brady Dale — Thu, 20 Sep 2018 08:00:16 -0400

Investors are looking forward to Decred's new approach to blockchain governance – in part, because its devs are opening up $20 million in tokens.

Poland’s Top Bank to Launch Blockchain Platform for Document Management Within ‘Days’

Cointelegraph By William Suberg — Thu, 20 Sep 2018 07:58:00 -0400

Poland’s largest bank, PKO Bank Polski to start issuing documents using

Coinbase Issues Statement Clarifying It Doesn't Engage in Proprietary Trading

Cointelegraph By Marie Huillet — Thu, 20 Sep 2018 07:50:00 -0400

Major U.S. crypto wallet provider and exchange service Coinbase clarifies that it does not engage in proprietary trading, in response to “inaccurate” media coverage

Japan Cryptocurrency Theft Cases Tripled in H1 2018, $530 Million Stolen: Police

Mark Emem — Thu, 20 Sep 2018 07:33:02 -0400

Barely before the ink had dried on the news that Japanese cryptocurrency exchange Zaif had been hacked and slightly less than US$60 million stolen, the National Police Agency (NPA) of Japan has released a report highlighting the vulnerability of Japan’s crypto space. According to the NPA, the number of incidents involving the theft of funds

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Bitcoin Price Sees High-Volume Recovery From Five-Week Lows

Omkar Godbole — Thu, 20 Sep 2018 07:00:38 -0400

Bitcoin's rebound from the five-week low of $6,100 has saved the day for the bulls and kept range-bound trading conditions intact.

Licensed Crypto Exchange Zaif Plans Compensation after 6,000 Bitcoins, $60 Million Crypto Theft

Samburaj Das — Thu, 20 Sep 2018 06:24:46 -0400

In the second major hack of a Japanese cryptocurrency exchange this year, some 6.7 billion yen ($60 million) in cryptocurrencies were stolen from the wallets of Zaif of which 4.5 billion yen ($40 million) belonged to customers. Tech Bureau, operator of cryptocurrency exchange Zaif, confirmed the hack occurred between 1700 and 1900 local time on … Continued

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Japan Lost $540 Million to Crypto Hacks in First Half of 2018

Daniel Palmer — Thu, 20 Sep 2018 06:00:39 -0400

Japan's police agency has released data revealing that cyberattacks leading to thefts of cryptocurrency rose sharply earlier this year.

Governing Decentralization: How On-Chain Voting Protocols Operate and Vary

Cointelegraph By Guest Author — Thu, 20 Sep 2018 05:58:00 -0400

Protocols as constitutions: the hows and whys of blockchain voting systems

Switzerland and Israel Collaborate on Cryptocurrency & Blockchain Regulation

Conor Maloney — Thu, 20 Sep 2018 05:20:32 -0400

The Swiss Minister for Finance Ueli Maurer recently visited Israel along with State Secretary for International Financial Matters Joerg Gasser, citing their goal as gaining bank access to Israeli markets to allow Swiss banks to trade there. Reuters reports that the two nations have now agreed to collaborate on financial technology, cryptocurrency, and blockchain regulation following their discussion

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Brazil Moves to Probe Banks After Crypto Exchanges Denied Services

Nikhilesh De — Thu, 20 Sep 2018 05:00:45 -0400

Brazil's antitrust watchdog is investigating major banks for potentially collaborating to prevent crypto brokerages from gaining banking services.

Australia’s Financial Watchdog Cracks Down on ‘Misleading’ ICOs & Crypto Funds

Samburaj Das — Thu, 20 Sep 2018 04:22:15 -0400

Australia’s financial regulator and watchdog is ramping up its scrutiny into ‘misleading or deceptive’ initial coin offerings (ICOs) and crypto-asset funds targeting retail investors. The Australian Securities and Investments Commission (ASIC) has confirmed it has identified “consistent problems” to ultimately shut down several initial coin offerings aimed at soliciting funds from retail investors. A radical … Continued

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Coinbase Refutes Claims in New York Attorney General's Exchange Report

Wolfie Zhao — Thu, 20 Sep 2018 03:50:38 -0400

Coinbase and other exchanges have hit back at claims of vulnerability to market manipulation in a report from the New York Attorney General's Office.

Coinbase Disputes Claims in New York Attorney General's Exchange Report

Wolfie Zhao — Thu, 20 Sep 2018 03:50:38 -0400

Coinbase and other exchanges have hit back at claims of vulnerability to market manipulation in a report from the New York Attorney General's Office.