The Weekly Hash – December 9 – 13

This digest is prepared for informative purposes only and does not represent an investment recommendation or investment advice. Please see our full disclaimer at the bottom for more information.

  1. Kraken: New Options for GBP Funding
  2. Huobi US: Important Notice – HBUS Cease to Operate
  3. CoinDesk: China’s Central Bank Likely to Pilot Digital Currency in Cities of Shenzhen and Suzhou
  4. Microsoft Azure: Accelerating Blockchain Adoption in the Enterprise
  5. Avon Ventures’ Investor Alex Thorn: Bitcoin Wallet Addresses Reach New All-Time High
  6. The Korea Times: Gov’t Seeking to Levy Taxes on Virtual Currency
  7. CoinDesk: Ethereum’s Istanbul Hard Fork Is Now Live
  8. Bloomberg: Money Laundering Battle Drives Japan Banks to JPMorgan’s Payments Network
  9. Bloomberg: Bitmain Chief Plots Crypto Comeback After Co-Founder Ouster
  10. Partners with Lukka to Offer Crypto Asset Solutions
  11. Decrypt: How MakerDAO Plans to Fix Potential $340M Cryptocurrency Exploit
  12. Cointelegraph: Bank of China Uses Blockchain to Issue $2.8B Worth of Financial Bonds
  13. The Block: Deutsche Bank Says Crypto Could Replace Cash by 2030 as Fiat System Looks ‘Fragile’
  14. Kraken: Earn a 6% Return Staking Tezos, Available on Kraken December 13
  15. Kraken Security Labs: Flaw Found in Keepkey Crypto Hardware Wallet
  16. CoinDesk: SEC Taking ‘Measured’ Approach to Digital Asset Regulation, Jay Clayton Tells Senate Committee
  17. The Block: Elliptic Builds a Solution for Banks to Help Them Decide Which Crypto Exchanges To Do Business With
  18. NYDFS: Proposed Guidance Regarding Adoption or Listing of Virtual Currencies
  19. Keybase: The Big Stellar Space Drop
  20. Square Crypto: Square Crypto Offers Grant to Pseudonymous Bitcoin Developer
  21. The Block: Nike Receives Patent to Tokenize Shoes on Ethereum
  22. Reuters: China’s Bitcoin Miners Scoop Up Greater Production Power
  23. U.S. DOJ: Four Men Arrested in $722 Million Cryptocurrency Fraud Scheme
  24. Kraken: New Kraken Trading Pair Adjustments on Dec. 19
  25. NBC: Twitter Plans to Build a ‘Decentralized Standard’ for Social Networks
  26. CoinDesk: Circle Confirms New Round of Layoffs Following Co-CEO Departure
  27. Reuters: ING Working on Digital Assets Custody Technology
  28. NL Times: Netherlands Plans to Punish Crypto Scammers With Up to 6 Years in Jail
  29. Bloomberg: Crypto Exchange BitMEX Is Hit With $300 Million Investor Lawsuit
  30. Bitmain: Bitmain Strengthens Global Reach—Names Bit5ive and Fastblock Official Distributors of Antminers in South America
  31. The Block: Crypto Bank SEBA Expands to 9 New Markets, Including Singapore and Hong Kong
  32. Ledger Insights: State Street: 92% of Large Asset Managers Bullish on DLT, Digital Assets More Variable
  33. Reuters: Electronic Swiss Franc? Not So Fast, Government Says
  34. Fintech Policy: The Libra White Paper Has Been Edited, With Notable Changes
  35. Forbes: Anthem Will Use Blockchain To Secure Medical Data For Its 40 Million Members In Three Years
  36. VeChain Foundation: VeChain Foundation Loses $6.6M in VET to Hacker in Attack on Buyback Wallet
  37. CoinDesk: New York Attorney General Calls Bitfinex’s Legal Stance ‘Deeply Perverse’ in New Filing
    • In collaboration with UK-based payments services firm Clear Junction, Kraken added GBP D/W funding options via the UK’s Faster Payments Service (FPS/BACS) or the CHAPS network
    • FPS is significantly cheaper than CHAPS, which is intended for large payments that need a guaranteed arrival
    • FPS/BACS txs typically arrive on the same day, although this isn’t guaranteed, while payments issued over CHAPS are guaranteed to arrive on the same day if issued before the daily 14:00 UTC cutoff
    • Roughly a month after Huobi Group froze all U.S. accounts to comply with regulations, Huobi’s U.S. affiliate HBUS announced it will shut down trading services on Dec. 15 “so that it can return in a more integrated and impactful fashion as part of its ongoing strategic layout […] Customers will continue to be able to access their accounts to withdraw funds until January 31, 2020”
    • Customers with insufficient balances to meet the minimum withdrawal requirements “are encouraged” to convert their assets into another crypto/fiat to try to meet alternative minimum requirements, according to a FAQ
    • Caijing reported that the People’s Bank of China (PBoC) is “expected” to pilot its digital yuan central bank digital currency (CBDC), dubbed digital currency electronic payment (DCEP), in Shenzhen and Suzhou (other places may also see trials)
    • The tests will likely include the participation of state-owned partners, including the “Big Four” commercial banks (Industrial and Commercial Bank of China, Bank of China, China Construction Bank and the Agricultural Bank of China) and three telcos (China Telecom, China Mobile and China Unicom)
    • Partner banks will be able to design their own trials scenarios for DCEP, which will be applied in real-world scenarios such as transportation, education and healthcare
    • The first of two pilot phases will be smaller scale and start at the end of 2019, while the second will start later in 2020 and will be a larger-scale effort in Shenzhen; if all goes well, a full launch of DCEP is expected soon after the pilots
    • A PBoC official said the DCEP is designed to replace physical cash in circulation and will meet “the needs of portability and anonymity”
    • Microsoft Azure launched the preview of the Azure Blockchain Tokens service, which simplifies the ability to define, create, and manage compliant tokens that are built on industry standards, as well as the preview of blockchain data manager, a new feature of Azure Blockchain Service that captures blockchain ledger data, transforms it (including decoding encrypted event and property state data), and then delivers that data to multiple sources via Azure Event Grid to off-chain databases like Azure Cosmos DB or Azure SQL Database
    • Azure Blockchain Tokens provide pre-built templates for common scenarios and will support a gallery of templates created by partners in the future, “With this latest offering, we can now offer customers an end-to-end experience of easily creating and managing tokens for physical or digital assets via Azure Blockchain Tokens (preview), in addition to managing the blockchain network itself via Azure Blockchain Service”
    • Blockchain data manager supports both public and private tx data and simplifies the cumbersome task of integrating existing applications with data that sits on a blockchain, “In addition to simplifying blockchain data integration into existing applications, providing choice and flexibility is central to our investments in Azure Blockchain Service”
    • According to data from Coinmetrics, the number of BTC addresses (with any balance) hit an ATH at 28.39M, eclipsing a previous high of 28.38M in January 2018
    • Because many addresses can be associated with one individual and many users store their BTC with third-parties that may use single omnibus addresses to hold customer funds, the “addresses w/ any balance” metric shouldn’t be understood to equal the total number of individual BTC users; however, because such a large number of individuals hold their funds on exchanges, this metric likely undercounted the total number of BTC users
    • An official of the South Korean Ministry of Economy and Finance said the gov’t wants to impose capital gains taxes on virtual currency txs, “The revised bill will be drawn up by the first half of next year”
    • A similar bill on enhancing the transparency of virtual asset trading awaits passage at sub-committee level; if the bill passes, it will go into effect one year after the regulation is promulgated
    • The gov’t is seeking to include CGT on virtual currency regardless of the bill’s passage
    • The government must decide if it will consider gains from the virtual asset trading as the type of gains coming from stock trading or real estate txs; if this is the case, the gov’t needs to obtain trading records from exchanges to levy taxes accordingly
    • The bill on trading of virtual assets requires exchange operators to identify traders and retain separate records for each trader
    • Ethereum underwent the Istanbul hard-fork at block #9,069,000 on Dec. 7; the hard fork represents Ethereum’s eighth hard fork, six of which were to catered around the implementation of Ethereum Improvement Proposals (EIPs)
    • ConsenSys said the main issues addressed by the EIPs are DDoS attack resilience (EIP 1344), interoperability with equihash-based PoW cryptos such as ZEC (EIP 152), and gas costs (EIPs 1108, 2028, 2200)
    • The lowered gas costs enabled by Istanbul’s EIPs are meant to increase bandwidth on the blockchain and foster zero-knowledge privacy tech such as zk-SNARKs
    • JPMorgan Chase Executive Director Daizaburo Sanai said 80+ Japanese banks are willing to join the bank’s blockchain-based payments network, the Interbank Information Network (IIN)
    • While Japan has been accused of having weak AML measures, Sanai said these banks may be seeking to use the platform to bolster AML measures because it makes the screening of cash recipients “faster and more efficient”
    • When a payment is flagged for confirmation on the platform, several parties can request and share info simultaneously
    • JPMorgan has begun implementing IIN outside of Japan and plans to go live in the country as soon as January
    • Takashi Endo, a Treasury Operations Dept. Officer at Sumitomo Mitsui Trust Bank, a Tokyo-based bank that’s among the lenders that have signed a letter of intent to join the platform, said minimizing delays caused by inquiries between banks could enable “quick collaboration with law-enforcement authorities, which is an effective way” to fight money laundering
    • Coverage by Yahoo! Finance & CoinDesk
    • Bitmain Co-founder Jihan Wu hosted a client meeting in Chengdu, China, marking his re-emergence as CEO and sole chairman of the firm and his first appearance since a power struggle 6wks ago with fellow Co-founder Micree Zhan Ketuan
    • In an effort to restore Bitmain’s waning market dominance, the company announced new sales initiatives to lure customers, including a promise to seek deposits as low as 20% for bulk purchases of mining equipment, which usually require 50% or full payment in advance
    • Bitmain will offer a co-mining agreement that runs +1yr for mining farm operators to rent its flagship AntMiner S17 or T17 products; Bitmain would cover the year-round electricity cost at $0.05/kWh while operators remain responsible for maintenance, and in return, Bitmain will retain 75% of the mining profits and operators will take the remaining 25% (If the mining revenue is less than the electricity cost, all the mined coins would go to Bitmain)
    • Bitmain will also give out put options to those who make bulk product orders (e.g., for users who purchase 1,000 units of AntMiner S17 Pro, worth ~$1.5M, the firm will give away 62 put options, worth 1% of the order amount with each option salable into BTC at $5,000 on Mar. 27)
    • Coverage by CoinDesk
    • partnered with crypto asset software and data solutions provider Lukka to launch ‘LukkaTax for Professionals,’ a virtual currency tax preparation tool built specifically for accountants, in mid-January
    • While the program initially will focus on the tax offering, other capabilities for valuing digital assets and providing assurance services around blockchain will eventually be included
    • President & CEO Erik Asgeirsson said, “Through our annual Blockchain Symposium, we have been framing the discussion around blockchain use cases. The need for firms to understand the crypto asset category was greatly accelerated with the IRS issuing thousands of compliance letters recently. The combination of an institutional-grade solution from Lukka with our firm enablement capabilities will help firms address these complex client needs”
    • This alliance was formed because it is estimated that between 8% and 14% of the U.S. population own crypto assets, according to recent polls by Harris Insights/Gem and Finder Inc., respectively
    • Lukka Founder & CEO Jake Benson added, ”We know that every CPA will need to pose the virtual currency question to their clients. With tens of millions of crypto asset holders in the United States, thousands of these CPAs will then have to deliver accurate crypto tax calculations. It’s challenging and you absolutely have to be correct”
    • MakerDAO is polling the community over a potential solution to a $340M exploit, which will conclude on Friday, Dec. 13
    • Software developer Micah Zoltu disclosed the exploit yesterday, claiming that a bad actor with 40,000 MKR (~$20M) could seize the entirety of funds retained within the Maker DAO (+$340M worth of ETH)
    • Zoltu added that the network would be powerless to stop such an attack because the governance delay in Maker’s latest Multi-Collateral Dai release is 0 seconds, giving those on the network no time to react to a malicious attack, “It is worth noting that Maker Foundation could attack the system in this way right now if they wanted. What is worse, [venture capital firm] a16z has enough MKR on hand right now to execute the attack the patient way!”; if passed, it would change the delay to 24hrs
    • Just 31 people have voted thus far (4% of MakerDAO community), with 99% in favor of adding the delay
    • Sina Finance reported that the Bank of China issued 20B CNY ($2.8B) in blockchain-based special financial bonds to issue loans to Chinese small and micro-sized companies (i.e., micro firms have <10 employees and small firms have up to 50 employees) to support their continued development in the economy
    • As of September EOM, the Bank of China issued ~404B CNY ($57.7B) to 410,000 small and micro enterprise customers, a +35% increase YoY
    • Deutsche Bank reported that crypto could replace fiat by 2030 because the current fiat system looks “fragile,” particularly due to “decades of low labor costs” and inflation, “If one of the GAFA [Google, Apple, Facebook and Amazon] (or their Chinese counterparts BATX [Baidu, Alibaba, Tencent and Xiaomi]) for example are able to overcome regulatory hurdles…this would broaden the appeal of cryptocurrencies, hasten their adoption, and give them the potential to eventually replace cash […] demand for alternative currencies, from gold to crypto, could take off [in the next decade]”
    • The benefits of crypto such as security, speed, minimal tx fees, ease of storage, “relevance in the digital era,” and privacy could help drive mass adoption in the years to come, “Nearly two thirds of consumers prefer dematerialised to cash payments and a third are concerned by anonymity. These are the two things that cryptocurrencies do best”
    • Crypto needs to become legal in the eyes of gov’ts and regulators to become widespread, which would bring price stability, allow for global reach and see increased interest from companies in the payments industry
    • DB believes plastic cards could die out as smartphones make physical cards obsolete, “Whether it is through the eager adoption by millennials or the increased digitalisation of countries’ infrastructure, the plastic card could be on its way out over the next decade while people will still be paying with humble notes and coins”
    • The report added that gov’ts and banks are also moving towards a cashless society
    • Based on current trends, the number of blockchain wallet users is expected to increase to 200M by 2030
    • Kraken is launching support for XTZ staking starting Dec. 13, allowing users to earn a fixed rate of 6% annually (paid out every Mon. & Thurs.) with no waiting or lockup periods
    • Staked tokens are inaccessible for trading or withdrawal
    • Kraken assumes liability for any loss of staked tokens except for the events described in the Staking User Agreement
    • Additional tokens will be available for staking in the future
    • Kraken Security Labs discovered a vulnerability in a KeepKey hardware wallet; all that is required to extract the wallet’s encrypted seed is 15 minutes of physical access and a consumer-friendly glitching device that can be created for ~$75 
    • Because the attack takes advantage of inherent flaws within the microcontroller that is used in the KeepKey, it’s difficult for the KeepKey team to do anything about the vulnerability without a hardware redesign
    • KeepKey is already aware of similar attacks but claims “KeepKey’s job is to protect your keys against remote attacks” 
    • In order to remain protected, prevent physical access to your KeepKey and enable your BIP39 passphrase with the KeepKey client
    • Read more
    • Testifying before the Senate Committee on Banking, Housing and Urban Affairs, SEC Chair Jay Clayton said his agency is taking a “measured” regulatory stance on “promising” blockchain tech and has been dedicating “a significant amount of attention and resources on digital assets.”
    • Clayton went on to say, “Overall, I believe we have taken a measured, yet proactive regulatory approach that both fosters innovation and capital formation while protecting our investors and our markets”
    • Clayton noted that the SEC has been enforcing securities rules on digital asset firms that stray over the line, “This past year, the Commission has brought actions against a number of issuers of digital assets for allegedly engaging in fraud and for violating the registration provisions of the federal securities laws. The Commission also filed charges related to the unlawful promotion of initial coin offerings (ICOs) and the unlawful operation of a digital asset trading platform”
    • Ostensibly referencing the SEC’s ongoing court action against Telegram, Clayton said the commission took “emergency action to block an alleged unregistered, ongoing, public digital token offering in the United States that has raised more than $1.7 billion of investor funds”
    • Blockchain analytics firm Elliptic launched the “Discovery” solution, a database of 200 global crypto exchanges, including info about their corporate entities, jurisdiction, regulatory status, and compliance policies, as well as blockchain insights into the provenance of the cryptos they hold, that is designed to help banks decide which crypto exchanges to do business with
    • Elliptic Co-founder and Chief Scientist Tom Robinson said, “At the moment most banks cannot distinguish between compliant exchanges and those that pose money laundering or sanctions risks. Their reaction to this has been to simply cut off crypto businesses entirely […] Elliptic Discovery will allow them to instead take a risk-based approach, and use our insights and data to identify those crypto exchanges that they can safely do business with”
    • As of August this year, all crypto-serving banks based in the U.S. combined have less than $70B in total assets (which is less than 3% of JPMorgan Chase’s total assets)
    • Crypto-friendly banks have an average total assets of $5.2B and median total assets of  $1.6B, ~33% of which offer crypto custody as a supplemental service; large banks remain reluctant to provide banking to crypto businesses as the risks/costs outweigh the benefits
    • The NYDFS is modifying the approval process for listing new cryptos under its virtual currency licenses (i.e., BitLicense and trust charter) to accommodate for the “exponential and continued growth in the number of coins available in the market” since introducing the BitLicense in 2014, “To provide regulatory clarity and efficiency, and to ensure that our approach to regulating virtual currency businesses reflects the realities of an evolving market, we are reviewing our virtual currency regulations and the manner in which they are implemented”
    • Under the current regime, NYDFS approves every crypto offered within the state on a case-by-case basis with individual exchanges
    • DFS is seeking comments from the general public until Jan. 27 regarding the following two proposals: a DFS web-page with a list of all coins the regulator approves for listing in NY, without prior DFS-approval; and a model framework for a coin-listing or adoption policy that can be tailored to a VC licensee‘s specific business model and risk profile, which if approved by DFS, will enable the licensee to self-certify the listing or adoption of new coins, without DFS’ prior approval
    • Superintendent Linda Lacewell said, “It’s more than time to take another look at the virtual currency regulation given the passage of time, changes in the industry, maturation, sophistication and new business models. What tweaks and changes can we make should we make because, while it is our obligation to regulate, we only want to have enough regulation to get the job done and not a drop more,” adding that existing licensees won’t have to re-apply
    • The framework examines how an exchange approaches a coin’s governance, risk and monitoring, with each category including concerns the regulator would like addressed before approval
    • 24 crypto firms have been granted the BitLicense to date 
    • Starting Dec. 15, Stellar will conduct its final airdrop of 100 XLM ($5.3M) amongst registered users, bringing its total giveaway amount to 300M XLM (~$16M)
    • The announcement stated, “While this giveaway mostly worked, it’s clear that there will be decreasing returns and massively increased effort required […] hordes of fake people were beginning to come in, far beyond the capacity of Keybase or SDF [Stellar Development Foundation] to filter. It’s not in the Stellar network’s interest to reward those people; it is also not in Keybase’s interest to have them as Keybase users”
    • Square Crypto is giving a grant to part-time Bitcoin & Lightning Network developer “ZmnSCPxj” to work on LN/BTC full-time
    • ZmnSCPxj is known for his posts on the LN-development email lists, where he provides detailed analyses of existing proposals and comprehensive proposals of his own 
    • The firm added, “We don’t actually know where ZmnSCPxj lives, apart from somewhere in the GMT+8 timezone, which includes China, Brunei, Hong Kong, Macau, Taiwan, the Philippines, Malaysia, and Singapore. That’s it. That’s all he told us and that’s all we know”
    • Nike received a patent to tokenize shoes on Ethereum by generating unique IDs and creating ERC 721 tokens for them
    • Users can “unlock” these tokens by purchasing physical shoes and these tokens can then be linked with unique owner IDs to signify ownership
    • The token can record the “genotype info” of a digital shoe, including specific attributes, colors, styles, backgrounds
    • Users can exert more control over their shoes and shoe designs, including set limits on how many copies of their proprietary shoes can be cloned and produced, “surrogacy features” to grant others the right to mix shoe designs, and “parenting/nannying features” to allow third parties to take care of the shoes.
    • Additionally, “breeding rights” for a digital shoe may be governed by one or more real-world manufacturing restrictions; ownership rights for each successive generation of a digital shoe may be tied back to the original, real-world shoe (e.g., wholly or partially; by percentage of genotypic contribution, etc.) via an encryption key to the originally associated virtual product”
    • CoinShares Head of Research Chris Bendiksen reported that miners in China control 66% of BTC’s global hash rate, up from 60% in June and a new all-time high  since tracking began ~2yrs ago, “This is beneficial to the Chinese mining industry. If you are the first to increase your proportion of the hashrate, and you can do that before your competitors, that’s generally good”
    • Bendiksen added that the gains may be due to China’s greater deployment of more advanced mining gear, however, the country’s share may fall as more Chinese-made, next-gen gear makes its way into other markets
    • At bitcoin’s current price of ~$7,200, miners produce BTC worth ~$4.7B every year
    • The network’s hashrate has risen +80% since June, in part because of strong profitability of miners and more powerful machines
    • The most significant crypto mining hubs are in China’s Yunnan, Xinjiang, Inner Mongolia and Sichuan provinces, with the latter accounting for over half the global hashrate – other centers are spread from the U.S. to Russia and Kazakhstan
    • U.S. Attorney Carpenito announced that four men were arrested in connection with a crypto mining scheme, dubbed “BitClub Network,” that defrauded investors of $722M, “The indictment describes the defendants’ use of the complex world of cryptocurrency to take advantage of unsuspecting investors. What they allegedly did amounts to little more than a modern, high-tech Ponzi scheme that defrauded victims of hundreds of millions of dollars. Working with our law enforcement partners here and across the country, we will ensure that these scammers are held to account for their crimes”
    • The defendants are being indicted with conspiracy to commit wire fraud and sell unregistered securities, two remain at large and their identities are under seal
    • Kraken is adding 10 new pairs and removing 5 existing pairs with low trading volumes on Dec. 19
    • The following pairs will be added: USDT/EUR, USDT/CAD, USDT/GBP, XBT/USDT, ETH/USDT, XBT/DAI, MLN/USD, MLN/EUR, XDG/USD, and XDG/EUR
    • The following pairs will be disabled: ZEC/JPY, XTZ/CAD, ATOM/CAD, ADA/CAD, and QTUM/CAD
    • Twitter CEO Jack Dorsey plans to set up an independent research team to create an “open and decentralized standard” for social media networks, which Twitter plans to follow
    • Dorsey said centralized solutions are struggling to overcome new challenges faced by social networks, including large scale content moderation, adding that the standard won’t be owned by any single private corporation, “Centralized enforcement of global policy to address abuse and misleading information is unlikely to scale over the long-term without placing far too much burden on people”
    • Twitter CTO Parag Agrawal will hire a lead for the team, called Bluesky, however the project could take many years to complete
    • Dorsey believes blockchain can provide a model for decentralizing content hosting, oversight and even monetization of social media, “It will allow us to access and contribute to a much larger corpus of public conversation, focus our efforts on building open recommendation algorithms which promote healthy conversation”
    • One week after Circle’s Co-CEO Sean Neville announced he would step down from his role at EOY, a Circle spokesperson confirmed that the firm has now laid off ~10 employees, ”As we continue to focus on advancing our stablecoin business strategy, we’ve streamlined some departments and eliminated about 10 roles” 
    • Circle’s sale of Poloniex, which was sold to an unnamed Asian investment group in October for $400M, contributed to Neville’s decision
    • Neville will continue working with CENTRE, the company’s collaborative project with Coinbase which issues the USDC stablecoin
    • Coverage by The Block
    • According to people familiar with the matter, Dutch bank ING is developing custody tech for digital assets because it “sees increasing opportunities with regard to digital assets on both asset backed and native security tokens”
    • ING is particularly focused on developing blockchain tech to give its clients a compliant way to access the emerging sector
    • A review of 33+ projects involving large companies announced over the past 4yrs and interviews with 12+ executives involved with them showed many firms haven’t gone beyond the testing phase of blockchain
    • The Netherlands plans to increase the maximum jail term for scams involving banking apps and crypto from 1-4 years to 6 years in an effort to align penalties for fraud utilizing these newer payment methods with those involving traditional payments, which already have a 6 year maximum jail sentence
    • The legislation builds on the EU’s AML directive, according to another report from NOS
    • Justice Minister Ferdinand Grapperhaus, who is working on the bill, said fraud via these newer payments methods is increasingly commonplace and can target large numbers of people, adding that he hopes tougher penalties would act as a deterrent
    • The sentencing regime will also apply to crimes such as falsifying payment data, owning or selling falsified data, credit card forgery and phishing schemes
    • Coverage by CoinDesk
    • BitMEX and its founder Arthur Hayes are being sued for $300M by Frank Amato and RGB Coin Ltd., who claim to have been among the firm’s first seed investors in 2015, for allegedly giving false info about their investment deal
    • The plaintiffs claim their $30,000 investment was supposed to later be converted into equity, currently valued at +$50M, but they weren’t granted the equity; they now want to recoup the value of their equity, +$50M, and $250M in punitive damages
    • Coverage by Yahoo! FInance & The Information
    • Bitmain is strengthening its global reach by selecting crypto mining consulting firms Fastblock and Bit5ive as the company’s official distributors of Antminers in South America
    • Antminer Sales Director of NCSA Irene Gao said, “South America continues to be an important region for the cryptocurrency mining sector. Our collaboration with Fastblock and Bit5ive will help us to build on the relationships we have with the mining community on-the-ground and instill trust in the sales process of Antminers”
    • Bit5ive will distribute Antminers to 30+ countries in Latin, Central America and the Caribbean, while Fastblock will be the main distributor in Brazil
    • The companies were selected due to their capabilities in providing customers in those location further expertise and added solution services such as: Customer Clearance Service, Logistics Service, Mining Farm Hosting Services, Consultancy, and more
    • The news comes amidst reports that Bitmain’s market share by hash rate dropped from ~70% in June to 66% in early-December, according to data from CoinShares
    • Coverage by Cointelegraph
    • A month after launch, Switzerland-based crypto bank SEBA expanded to nine new countries – Singapore, Hong Kong, the U.K., Italy, Germany, France, Austria, Portugal, and the Netherlands; companies and institutional clients in those countries can now open accounts with the bank
    • The bank said, “More than 10 years after the invention of Bitcoin, there is still a tremendous gap between traditional banking on one side and decentralized finance on the other side,” adding that it aims to bridge the gap
    • State Street surveyed 101 North American asset managers to analyze growth in digital assets and blockchain for financial markets, 71% of which were funds with more than +$100B in AUM
    • ~65% of respondents agreed or strongly agreed that DLT is likely to improve future financing solutions, compared to 92% for asset managers  with more than +$500B in AUM
    • 62% of respondents said DLT would be integrated into their trading process in 2020 and 94% of respondents already hold digital assets or crypto-funds
    • 69% of larger asset managers (+500B AUM) plan to increase their allocation for digital assets, compared to 38% across the board; 45% of all AMs plan on maintaining their current weight
    • 62% of respondents said tokenization will improve risk management of traditional financial assets, which was the largest benefit cited; tied for second at 55% were enhancing security with tokenization and improved transparency, only 4% said they don’t see any benefits to tokenization
    • 55% of respondents believe tokenized assets carry inherent risks that are too big for widespread institutional adoption, but 45% believe tokenization of traditional assets will be a massive market disruption in the next five years
    • The Swiss gov’t said creating a central bank digital currency (CBDC), namely an e-Swiss franc, could do more harm than good and destabilize the financial system, “Universally accessible central bank digital currency would bring no additional benefits for Switzerland at present. Instead, it would give rise to new risks, especially with regard to financial stability”
    • While the Swiss National Bank has taken a skeptical view of a CBDC for use by the general public, it has been researching the broader use of CBDC’s alongside the BIS
    • The cabinet added, “The further development of central bank digital currency that is restricted to financial market players would appear to be a more promising strategy. This would not have the same far-reaching and fundamental implications as universally accessible central bank digital currency. A ‘wholesale token’ issued by the SNB could possibly help to enhance efficiency in the trading, settlement and management of securities”
    • Libra’s white paper was silently updated to remove dividends payable to those early investors (among other changes), “Interest on the reserve assets will be used to cover the costs of the system, ensure low transaction fees and support further growth and adoption. The rules for allocating interest on the reserve will be set in advance and will be overseen by the Libra Association. Users of Libra do not receive a return from the reserve”
    • Under the original white paper, Libra Association members would receive dividends for profits generated by assets in the reserve, creating an incentive for decision-makers to invest in risky assets for higher returns at the expense of the retail public
    • Link to PDF tracking the white paper revisions
    • U.S. health insurance giant Anthem is piloting a private blockchain with a group of ~200 employees to keep patient data private while increasing interoperability and trust between partners
    • Users will scan a QR code with an app on their phone and instantly grant different healthcare providers access to their health records; as soon as the appointment is over, users can revoke access and make their medical records private again
    • Anthem Chief Digital Officer Rajeev Ronanki said the firm plans to have more than 12 different uses for blockchain tech, ~40% of which are already live on Hyperledger Fabric, Burrow and Indy with tx volumes averaging 300,000 a week for patient health data, “We’re essentially creating a permission-based system that would allow consumers to own their healthcare data, and then make it available to providers as appropriate”
    • The firm plans to launch the feature to groups of members in the next few months, and to all 40M members in the next 2-3 years
    • A hacker compromised the VeChain Foundation buyback address and has stolen more than 1.1B VET (~$6.6M), or ~2% of the circulating supply, ”Security breach was most likely due to misconduct of one of the team members within our finance team, who have created the buyback account without thoroughly obeying The Standard Procedure approved by the Foundation, and our auditing team did not pick up this misconduct, due to human error […] the incident is in no way related to the effectiveness of the actual Standard Procedure or VeChain’s hardware wallet solutions”
    • All addresses associated with the hacker have been tagged on VeChainStats, which automatically updates as the hacker sends any funds from the original address
    • The NYAG defended its ongoing investigation against Bitfinex & Tether in a Dec. 4 filing, urging the Supreme Court to stand by its denial of Bitfinex’s appeal motions, “Eight months have now passed since Supreme Court issued the § 354 order, and respondents continue to evade producing the core materials that would establish (or disprove) their liability. No principle of law or rule of procedure allows a subject of an investigation to refuse to comply with that investigation in the face of a lawful court order”
    • The office said the firms “had, step by step, dissipated the cash backing tethers: first by going from actual cash in hand to $625 million in an inaccessible Crypto Capital account; and then by replacing even that questionable source of backing with nothing more than a $625 million IOU from Bitfinex,” adding that the debt “seemed unlikely to be repaid” as Bitfinex required the funds for withdrawals on its exchange
    • The NYAG said the firm’s arguments that “fault OAG for having insufficient evidence about tether’s status as a security or commodity and about respondents’ contacts with New York” are “deeply perverse,” as the office hasn’t and couldn’t have obtained due to the company’s non-cooperation
    • The new filing added that Bitfinex’s exchange token LEO could be a security under U.S. law, “While the motion to dismiss was pending, respondents conducted yet another large financial transaction, issuing nearly one billion ‘LEOs,’ a new virtual asset resembling a debt security”
    • The filing also alleges that a Bitfinex executive “assisted New York customers with trading activity”
    • Coverage by The Block


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