The Weekly Hash – December 16 – 20

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. Federal Reserve: Statement Regarding Repurchase Operations
  2. Cointelegraph: Cardano’s Shelley Testnet Starts Off With More Than 5 Billion Staked ADA
  3. Xinhua Net: Chinese Courts Increasingly Use Blockchain Technology To Settle Cases
  4. Profit&Loss: Basel Committee Consults on Crypto Regulation
  5. Decrypt: Brave Surpasses 350,000 Publisher Milestone
  6. Riksbank: Riksbank Develops an E-Krona in a Test Environment
  7. AMD Investor Relations: AMD and Industry Partners to Develop New Blockchain-based Gaming Platforms
  8. The Block: Bitcoin is ‘Winning;’ Currency Without Government is ‘Great,’ says Nassim Taleb
  9. Kraken: Kraken OTC Acquires Circle Trade
  10. The Block: Fed’s Brainard—Stablecoins Like Libra Could ‘Put Consumers at Risk’ Without Safeguards
  11. Monero: Monero’s Lead Maintainer ‘Fluffypony’ Steps Down After 5 Years of Heading the Project
  12. BitGo: BSV Deprecation
  13. Ledger Insights: ECB Explores Anonymity for Central Bank Digital Currencies
  14. The Block: Fortress Investment Group Extends New Buyout Offer to Mt Gox Creditors
  15. Cointelegraph: Thailand Integrates Blockchain to E-Visa System for Higher Security
  16. Libra: Libra Core Roadmap #2
  17. The Block: Crypto Companies Reportedly Face Questions at Meeting With Shenzhen Finance Regulator
  18. Ledger Insights: Boerse Stuttgart, SBI Group Collaborate for Digital Assets
  19. Ripple Insights: Ripple Caps Record Year with $200 Million Series C Funding
  20. Forbes Contributor: Congress Considers Federal Crypto Regulators In New Cryptocurrency Act Of 2020
  21. The Next Web: That $2B Ponzi Scheme Caught Dumping Bitcoin Just Moved its $105M Ether Stash
  22. AP News: Iran Leader Urges Deeper Muslim Links to Fight US ‘Hegemony’
  23. AMF: The AMF Grants its First Optional Approval to an Initial Coin Offering (ICO)
  1. Federal Reserve: Statement Regarding Repurchase Operations
    • The Fed will conduct at least $425B in repo operations by Jan. 14, 2020, “In accordance with the most recent FOMC directive, the Desk will conduct repo operations to ensure that the supply of reserves remains ample and to mitigate the risk of money market pressures around year end that could adversely affect policy implementation”
    • The Fed will continue offering two-week term repos twice per week, four of which span year end, as well as a longer-maturity term repo that also spans year end; the amount offered in this operation will be +$50B
    • Overnight repos will continue to be held each day, however on Dec. 31  and Jan. 2, 2020, the overnight repo will increase to +$150B
    • Additionally, on Dec. 30, the Fed will offer a $75B repo that settles on Dec. 31 and matures on Jan. 2, 2020
  2. Cointelegraph: Cardano’s Shelley Testnet Starts Off With More Than 5 Billion Staked ADA
    • More than 5B ADA (~$195M) was staked within 24hrs of Cardano’s Shelley testnet launch
    • More than 240 staking pools have gone online since Shelley went live, ~120 of which began staking on the first day of operation; according to the Shelley roadmap, IOHK is on track to reach its target of 1,000 staking pools
    • Testnet participants can earn real ADA rewards, which they will receive by the end of the testnet period
    • Shelley mainnet will launch in early 2020
  3. Xinhua Net: Chinese Courts Increasingly Use Blockchain Technology To Settle Cases
    • More than 3.14M litigation activities from March-October 2019 were settled through China’s blockchain and AI-powered smart internet courts
    • To date, 1.16M people and 73,200 lawyers have registered in smart courts
    • Smart internet courts allow citizens to communicate with non-human, virtual, AI-powered judges in front of multiple screens, which negates the need for them to physically appear in court and creates the possibility for citizens to receive their court decisions by text or through major messaging services
    • Coverage by Cointelegraph
  4. Profit&Loss: Basel Committee Consults on Crypto Regulation
    • The Basel Committee on Banking Supervision, a unit of the BIS which includes banking regulators from the U.S., U.K., Japan, and several other countries, believes that crypto has the potential to raise financial stability concerns and increase risks faced by banks, “If banks are authorised, and decide, to acquire crypto-assets or provide related services, the Committee is of the view that they should apply a conservative prudential treatment to such exposures, especially for high-risk crypto-assets”
    • The committee published a discussion paper proposing several measures to bring in “prudential” regulatory treatment of crypto and is inviting comments from stakeholders until March 13, 2020
    • Coverage by The Block
  5. Decrypt: Brave Surpasses 350,000 Publisher Milestone
    • The Brave browser hit a milestone of 350,000 registered Brave rewards publishers this month, making an +820% increase since January’s figure of 38,000 users
    • The increase in Brave publishers has been driven primarily by an increase of creators on platforms like YouTube (231,865 publishers), Twitch (19,370 publishers), and other websites (38,819 publishers)
  6. Riksbank: Riksbank Develops an E-Krona in a Test Environment
    • Sweden’s central bank Riksbank will partner with Accenture for an e-krona pilot project, a retail central bank digital currency (CBDC), “The primary objective of the e-krona pilot project is to broaden the bank’s understanding of the technological possibilities for the e-krona”
    • The assignment will likely involve multiple iterations, and the first phase will run to Dec. 31, 2020, but it could extend the effort for an additional six years
    • Riksbank has not yet made a decision to issue an e-krona
  7. AMD Investor Relations: AMD and Industry Partners to Develop New Blockchain-based Gaming Platforms
    • AMD joined the Blockchain Game Alliance and partnered with blockchain-based gaming marketplaces Robot Cache and Ultra to provide “high-performance computing technologies” that could “potentially transform the way games are created, published, purchased and played”
    • Both blockchain gaming platforms will use AMD’s Ryzen processors and Radeon graphics cards for “optimal” cryptographic computing performance
    • Joerg Roskowetz, Head of Blockchain at AMD,  said, “Blockchain technology brings broader choice, security and flexibility to both gamers and publishers. Next-generation blockchain game platforms will give gamers access to exclusive online content, and provide new ways for them to truly own it”
    • The hardware manufacturer’s mining business accounted for as much as 10% of its 1Q2018 revenue of $1.65B, however, revenue began decreasing over the next two quarters and disappeared by 4Q2018; its latest 3Q2019 earnings call doesn’t mention anything about crypto mining
    • AMD aims to enable several new blockchain-powered applications, services and use cases, “AMD is in a unique position to offer the best combination of high-performance CPUs [central processing units] and GPUs [graphics processing units] for demanding blockchain workloads”
    • Coverage by The Block
  8. The Block: Bitcoin is ‘Winning;’ Currency Without Government is ‘Great,’ says Nassim Taleb
    • Speaking at the Times Networks’ India Economic Conclave, best-selling author Nassim Nicholas Taleb said he believes that people of some countries, such as Lebanon, have “lost faith” in gov’ts and banking systems, “I am realizing Lebanon is in a situation where there is an implied currency control but the government cannot control bitcoin which is a good thing because people have no trust and the ability of the central bank which really causes the ponzi style collapse and the bitcoin does not have that”
    • Taleb said that BTC is “winning” and a currency that isn’t controlled by gov’t is “great,” adding that he has an institute which now accepts payments in BTC, “I am very glad that we have cryptocurrencies…Of course, you are going to have frauds and ponzi schemes and all that with bitcoin and cryptos but when you see governments like in Lebanon, doing the ponzis you tell yourself what is better […] You cannot ignore the cryptocurrencies, particularly the bitcoin story and blockchain”
    • Speaking about capital controls imposed by Lebanese banks, Taleb tweeted, “The most potent case for cryptocurrencies: banks are never there when you need them. And they are trying to bully the public so they avoid accountability and profit disbursements. Bankers are legal crooks”
  9. Kraken: Kraken OTC Acquires Circle Trade
    • Kraken’s OTC Desk is acquiring Circle Trade, one of the most recognized OTC desks in crypto, and will now expand to 20+ global professionals
    • This acquisition will also provide new trading partners around the world (particularly in Asia) deeper liquidity, tighter spreads across all supported assets, and improved automation and advanced tools for traders designed to streamline the trade process from quote to settlement
    • Circle co-founders Sean Neville and Jeremy Allaire said, “We have known and admired Jesse and his team at Kraken for many years, and we have every confidence and expectation that Circle Trade customers and partners will continue to find best-in-class OTC liquidity service and responsiveness through Kraken going forward. Circle Trade represents an enormous success for the industry as well as for Circle, and we’re excited to see Kraken grow it further”
    • The sale of Circle’s OTC desk is part of its “sharpened 2020 product roadmap,” in which the will focus effectively on its stablecoin platforms by reducing complexity, tightening its product portfolio, and reorganize its teams to execute with greater agility
  10. The Block: Fed’s Brainard—Stablecoins Like Libra Could ‘Put Consumers at Risk’ Without Safeguards
    • Fed Governor Lael Brainard said Facebook’s Libra must overcome “a core set of legal and regulatory challenges” before it can launch as a global stablecoin, adding that the associated risks are particularly high due to the project’s proposed scale, speed of adoption, and its chief backer Facebook
    • She said nearly one-third of the population are active on Facebook and Libra’s potential adoption would fundamentally transform the global payment system, “Stablecoin networks at global scale are leading us to revisit questions over what form money can take, who or what can issue it, and how payments can be recorded and settled”
    • Brainard added that Facebook needs to address if and how Libra will be tied to an asset, whether it will operate on a permissioned or permissionless network, and whether its target users will be commercial banks or regular consumers in order to determine its practical implications when it comes to consumer protection and AML/CFT, “Without requisite safeguards, stablecoin networks at global scale may put consumers at risk. Cryptocurrencies already pose a number of risks to the financial system, and these could be magnified by a widely accepted stablecoin for general use”
    • The governor also noted that BTC still contains a significant malicious user base, “Only a third of the most popular exchanges require ID verification and proof of address to make a deposit or withdrawal. This is troubling, since a number of studies conclude that cryptocurrencies support a significant amount of illicit activity […] One study estimated that more than a quarter of bitcoin users and roughly half of bitcoin transactions, for example, are associated with illegal activity”
    • Coverage by Cointelegraph
  11. Monero: Monero’s Lead Maintainer ‘Fluffypony’ Steps Down After 5 Years of Heading the Project
    • Riccardo “Fluffypony” Spagni, XMR’s lead maintainer since its launch in 2014, stepped down from his position and will have Snipa, a “longtime” contributor to Monero, take his role
    • Fluffypony will continue as a backup maintainer to relieve Snipa during times when he is busy or on vacation
    • It is not clear why Fluffypony has resigned
    • Coverage by The Block
  12. BitGo: BSV Deprecation
    • BSV’s genesis hard fork on Feb. 4, 2020 will make Pay-to-Script-Hash (P2SH) outputs invalid; because BitGo’s BSV wallets use P2SH-based multisig addresses, the fork will render BitGo BSV wallets unable to receive funds, including txs from a BitGo wallet attempting to return change back to the same wallet
    • Bitgo said clients need to either convert BSV holdings to BTC or move BSV funds to an external wallet, “If you continue holding BSV in your BitGo wallet after February 4th, you will only be able to sweep the wallet and most functionality will be disabled”
  13. Ledger Insights: ECB Explores Anonymity for Central Bank Digital Currencies
    • The European Central Bank (ECB) published a paper outlining a proof-of-concept (PoC) in collaboration with R3 and Accenture for central bank digital currencies (CBDCs), which are aimed at balancing anonymity with AML/CFT requirements
    • The ECB used R3’s Corda to develop the PoC featuring four parties (two intermediaries, a central bank and an AML authority)
    • As part of the PoC a solution for AML/CFT compliance procedures was developed on behalf of the central, which kept user identities and tx histories anonymous, i.e. neither the central bank nor intermediaries other than those chosen by the user could see the data
    • The report added, “To protect users’ privacy, the notary has no access to data such as transaction values, users’ addresses or states’ histories. The proof of concept shows that it is possible, using the Corda platform, to build a simplified CBDC payment system that safeguards users’ privacy for lower-value transactions, while still ensuring that higher-value transactions are subject to mandatory AML/CFT checks”
    • The bank noted an array of issues that needed to be improved including reducing the amount of info visible to parties that are not involved in the TXS, and users’ ability to access or spend CBDC balances when the intermediary is unavailable
    • The ECB stated that privacy could be further improved by applying mechanisms such as rotating public keys, zero-knowledge proofs and enclave computing
    • The bank further noted that issues of scalability weren’t addressed or tested in the PoC and that interoperability with a real-time gross settlement system must also be researched
    • Coverage by Cointelegraph
  14. The Block: Fortress Investment Group Extends New Buyout Offer to Mt Gox Creditors
    • Fortress Investment Group is offering creditors of defunct Mt. Gox a 70% payment of their claims at $7,200 per BTC
    • Mt Gox holds 141,868 BTC (~$1B) on behalf of creditors, which constitute 15% of the 940,000 BTC (~$6.7B) originally lost
    • Fortress Managing Director Michael Hourigan cited the ongoing lawsuits filed by two large creditors, Mt Gox’s parent company Tibannee and BTC business incubator CoinLab, as a reason why creditors should sell, “These lawsuits threaten to delay and dilute distributions on your claim”
    • Creditors have until Dec. 31 to make a decision
  15. Cointelegraph: Thailand Integrates Blockchain to E-Visa System for Higher Security
    • Australian travel company ShareRing and Gateway Services partnered to apply blockchain to Thailand’s Electronic Visa On Arrival (eVOA) in an effort to speed up and protect the digital visa application process
    • Thailand will initially roll out the blockchain-enabled eVOA service with a focus on visitors from China and India
    • ShareRing CEO and Co-founder Tim Bos said the feature is expected to streamline the process of applying for Thailand’s visa as its existing VOA process is done at airports or land entry points, adding that the process is paper-based, requires travelers to bring multiple documents (e.g., copies of airline tickets, accommodation confirmation and photos), and usually takes around one hour to complete
    • Bos noted that ShareRing is eyeing further global expansion of its blockchain-based visa application system after successfully completing its initial pilots, “We see this as a blueprint for possible expansion to other countries. It’s not a process that will be rushed though, as we need to make sure we get it right here before entering other countries”
  16. Libra: Libra Core Roadmap #2
    • The Libra Association published its second roadmap for Libra Core, the software that underpins the Libra network
    • Developers finalized the design of most major features for the mainnet including full nodes and the team will now finish all features in priority order; their work will consist of creating a full set of Libra protocol architecture documents as well as building out the network’s APIs
    • Developers will work to define a number of metrics regarding Libra Core, the Libra protocol, wallet dependencies, among other items, which will be crucial for measuring success and identifying dependencies
    • The association is working to increase transparency and encourage the Libra community to contribute to the project
    • Libra’s team is currently sourcing product requirements around the Libra infrastructure and APIs directly from client developers
    • The association will provide updates on the project through the Libra Developer Blog and a GitHub scheduling system
    • Coverage by The Block
  17. The Block: Crypto Companies Reportedly Face Questions at Meeting With Shenzhen Finance Regulator
    • Reported by BBT News, eight crypto firms were questioned by local financial authorities in Shenzhen, China, two of which allegedly opened trading venues and six which allegedly conducted ICOs
    • A Shenzhen bureau staff member said, “We conducted our investigation through an initial online screening and subsequent offline questioning. Just because we haven’t questioned some companies doesn’t mean that they have no problems. The companies we questioned today are not necessarily problematic. We are still verifying their situations.”
    • Daniel Bar, founder of Shenzhen-based blockchain venture network Bitfwd, said that even though many businesses operating in Shenzhen are scams, the crackdown culture has intimidated legitimate crypto-related projects, “Even for legitimate projects, there are many layers of people involved. For people who conduct OTC deals, for example, if someone that they’re receiving an Alipay, Wechat Pay, or bank transfer from got flagged because of the government’s suspicion, it means that they can also get flagged and have their bank accounts frozen. These stories aren’t unheard of.”
  18. Ledger Insights: Boerse Stuttgart, SBI Group Collaborate for Digital Assets
    • Boerse Stuttgart and Japan’s SBI Group collaborated to develop a blockchain-based digital asset ecosystem in Europe and Asia
    • SBI will invest an undisclosed amount in the Boerse Stuttgart Digital Exchange and plans to invest in Boerse Stuttgart Digital Ventures, both of which are Boerse Stuttgart’s digital-asset related subsidiaries
    • SBI Holdings’ President and Representative Director Yoshitaka Kitao said, “The SBI Group, including its crypto-asset trading platform and other related business operating companies, will fully make use of the collaboration with Boerse Stuttgart Group, to well-establish the actual demands of the digital asset throughout the world” 
    • Boerse Stuttgart’s Management Board Chairman Alexander Höptner said, “With the SBI Group, we have found an ideal partner to push forward our vision of a highly efficient, global ecosystem along the value chain of digital assets. Besides the exchange of knowledge and technology, possible fields of collaboration include the cross issuance and listing of digital assets, trading and brokerage as well as the creation of the first global custody bridge”
  19. Ripple Insights: Ripple Caps Record Year with $200 Million Series C Funding
    • Ripple raised $200M in a Series-C funding round led by alternative asset investment firm Tetragon to draw new int’l talent and “better serve” customers and partners
    • Japan’s SBI Holdings and VC firm Route 66 Ventures also participated in the round
    • Ripple CEO Brad Garlinghouse said, “We are in a strong financial position to execute against our vision. As others in the blockchain space have slowed their growth or even shut down, we have accelerated our momentum and industry leadership throughout 2019”
    • Highlighting its “strongest year of growth to date,” RippleNet payments network grew in 2019 to +300 clients
    • Coverage by CoinDesk
  20. Forbes Contributor: Congress Considers Federal Crypto Regulators In New Cryptocurrency Act Of 2020
    • Congress proposed the “Crypto-Currency Act of 2020” to clarify which Federal agencies regulate digital assets, as well as to require those agencies to notify the public of any Federal licenses, certifications, or registrations required to create or trade in such assets, among other things
    • The bill assigns a definition of ‘Federal Digital Asset Regulator’ or ‘Federal Crypto Regulator’ to three agencies – the CTFC, the SEC, and the FinCEN – and splits digital assets into three different categories: crypto-currencies, crypto-commodities, and crypto-securities
    • The CFTC, SEC, and FinCEN will regulate crypto-commodities, crypto-securities, and crypto-currencies, respectively
    • Each regulator is required to make available to the public and keep current a list of all Federal licenses, certifications, or registrations required to create or trade in digital assets
    • The bill also requires the Secretary of the Treasury, through FinCEN, to establish rules similar to financial institutions on the ability to trace crypto-currency txs
  21. The Next Web: That $2B Ponzi Scheme Caught Dumping Bitcoin Just Moved its $105M Ether Stash
    • PlusToken, a +$2B Chinese Ponzi scheme, moved 789,525 ETH (+$105M) amid rumors that those in command of the funds are looking to dump them on the market
    • Chainalysis claims that PlusToken laundered +$185,000 worth of BTC $1.3M worth of ETH, adding that there’s $134M in BTC controlled by PlusToken that’s reportedly ready to be dumped
    • The firm detected 800,000 ETH ($102M) sent from PlusToken’s wallets to individual addresses owned by the scammers themselves
  22. AP News: Iran Leader Urges Deeper Muslim Links to Fight US ‘Hegemony’
    • Iranian President Hassan Rouhani urged Muslim nations to improve financial and trade cooperation to fight U.S. economic hegemony
    • Rouhani proposed an Islamic financial payment with Muslim countries trading in local currencies and the creation of a Muslim crypto to cut reliance on USD and weather the effects of market fluctuation
    • He repeated his assertion that the U.S. used economic sanctions as the “main tools of domineering hegemony and bullying” of other nations, adding that the U.S. sought to cripple Iran with the “heaviest sanctions” but the country’s economy is recovering and moving away from reliance on oil
  23. AMF: The AMF Grants its First Optional Approval to an Initial Coin Offering (ICO)
    • France’s financial regulator Autorité des Marchés Financiers (AMF) approved crypto fundraising platform French-ICO as its first regulated ICO
    • The regulator can only approve public offerings for utility tokens, and an applicant must be a registered entity in France
    • Companies can still host an unregistered ICO in France but they aren’t allowed to promote the sale to potential investors
    • French-ICO’s $1.1M sale is scheduled to begin in March; however, the “ICO Visa” expires on June 1, 2020 if no sale occurs

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