The Weekly Hash – February 17 – 21

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.

  See below all the important happenings this week in the world of crypto, presented by the experts at Kraken:

  1. The Block: Vitalik Buterin Talks Ethereum 2.0, DeFi, and Community at ETHDenver
  2. The Block: The Libra Association is Weighing a Shift to a USD-Backed Stablecoin (Quick Take)
  3. Fcoin: Crypto Exchange FCoin Insolvent After Revealing Up to $130M Bitcoin Shortfall
  4. CoinDesk: Bitcoin Mining Unit Manufacturer MicroBT Nibbles at Bitmain’s Market Share
  5. UEFA: Over 1M UEFA EURO 2020 Tickets to Be Distributed to Fans Via Blockchain
  6. bZx: bZx Attacked Again, $645K in ETH Estimated to Be Lost
  7. Enjin: Enjin Platform: Now Live on Ethereum Mainnet
  8. People’s Daily Online: China—Blockchain Deployment Rises Amid Coronavirus Outbreak
  9. CoinDesk: US Presidential Contender Michael Bloomberg Proposes ‘Clear Regulatory Framework’ for Crypto
  10. CoinDesk: BitGo Acquires Harbor in Surprise Expansion Beyond Crypto Custody
  11. Lition: Microsoft Welcomes Lition to the Azure BaaS Ecosystem
  12. CoinTelegraph: Bank of Korea Seeks to Deploy Blockchain in Bond Market
  13. The Block: Sia Blockchain Developer Nebulous Releases Decentralized File Sharing Platform
  14. Decrypt: Warren Buffett’s Comments on BTC From Meal with TRON’s Justin Sun
  15. Copper: Copper.co Raises $8M to Expand Globally
  16. Gulf News: Dubai Economy and Six Banks Launch KYC Consortium
  17. Decrypt: We Tracked 133,000 Ethereum Names and Exposed Their Secrets
  18. WSJ: Morgan Stanley Is Buying E*Trade, Betting on Smaller Customers
  19. Banco Central do Brasil: Brazil’s Central Bank to Launch Instant, QR Code-Enabled Payments System This Year
  20. SEC: Statement on Continued Dialogue with Audit Firm Representatives on Audit Quality in China and Other Emerging Markets; Coronavirus — Reporting Considerations and Potential Relief
  21. CoinDesk: Tim Draper Buys 2.5% of Aragon Tokens, Becomes Governance Whale
  22. Bloomberg: Fortress Said to Increase Offer to Purchase Mt. Gox Claims
  23. SEC: ICO Issuer Settles SEC Registration Charges, Agrees to Return Funds and Register Tokens As Securities
  24. Riksbank: Testing for Sweden’s Central Bank Digital Currency Project Begins
  25. Shopify: Shopify Joins Libra Association
  26. Decrypt: Forbes Blockchain 50—Blockchain as a Service Is In, Mining Is Out
  27. Paxos: Paxos Settlement Service Begins Settling U.S. Securities Trades For Credit Suisse and Instinet
  28. The Block: Binance Is ‘Not Authorised’ to Operate in Malta, Says the Country’s Financial Regulator
  29. Decentraland: Ethereum-Based VR World Decentraland Has Launched
  30. The Block: IOTA Foundation Expects to Reactivate Network by March 2 Following $2M User Wallet Attack
   
  1. The Block: Vitalik Buterin Talks Ethereum 2.0, DeFi, and Community at ETHDenver
    • Speaking at ETHDenver, ETH co-founder Vitalik Buterin stated that as DeFi continues to grow, the simplest products will get the most users, “I think the DeFi applications that see the most use are the simplest ones…stablecoins, synthetic assets, decentralized exchanges.”
    • Buterin said he “definitely think ETH2.0 has been preceding quite quickly and regularly in the last few months,” adding that while ETH 2.0 is being tested and developed, new scaling solutions, such as rollups, are arising that can give more space for ETH to grow, “I hope that ETH2 gets released quickly…but even if it takes five years, rollups will give us some leeway until sharding [goes live].”
    • When asked whether ETH can survive without him, Buterin shared two views: from a tech perspective, ETH “definitely can” survive due to the influx of new contributing researchers, but from a social perspective, Buterin was a bit uncertain
    • Buterin added that he has been off-hands for most debates in the community such as whether to unlock funds stuck in Parity’s multi-sig wallet, “I’ve tried to let the community debate […] There is definitely evidence that the community is able to resolve [its issues].”
  2. The Block: The Libra Association is Weighing a Shift to a USD-Backed Stablecoin (Quick Take)
    • Sources familiar with the matter claim that the Libra Association is considering whether to abandon the currency-and-asset basket model in favor of a USD-based model for its Libra stablecoin project
    • The move could ostensibly mollify regulatory concerns
  3. Fcoin: Crypto Exchange FCoin Insolvent After Revealing Up to $130M Bitcoin Shortfall
    • FCoin founder and former Huobi CEO Jian Zhang said FCoin may default on 7,000 – 13,000 BTC ($67M – $125M) of user funds due to a “data error” and “decision error,” adding that “the biggest problem that FCoin currently faces is not the problem that the system cannot be restored, but the problem that the capital reserve cannot be paid by users. The internal problems and technical difficulties we face are the results of financial difficulties.”
    • Zhang will handle withdrawal requests via email and expects the process to continue for 2-3 months; meanwhile, he plans to start a new project to use its profits and his personal funds to cover losses, “I will be responsible for this till the end of my life.”
    • Launched in May 2018, FCoin accumulated huge trading volumes overnight via a controversial business model, named “trans-fee mining,” in which it issued its own exchange tokens, FT tokens, and distributed 51% of them publicly by reimbursing tx fees to incentivize users to transact as frequently as possible; 80% of the exchange’s daily revenue from tx fees were then paid back to users
    • In the first few months, Zhang personally gained $150M – $200M, and on some days the revenue payouts were as high as 6,000 BTC
    • Zhang admitted that the platform was unable to build out a solid technical platform that could sustain the hype at the time
    • To calm users’ when FT token price collapsed in mid-2018, Zhang used company funds plus all its personal gains to buy back FT tokens; however, since some users were exploiting FCoin’s weak backend system to receive more dividends, the buyback continued to drain the company’s and the team’s personal funds until the FCoin platform was shut down recently
    • Zhang asked Huobi founder Lin Li for help, although he declined Zhang’s request, “I told him the real reason (but not as detailed as this article), and then we explored possible rescue solutions. The results were exactly the same as I expected. Because I know that if Li Lin agreed to rescue, Huobi would not have today or tomorrow. If I were in his position that day, I should and would have made the same decision,”
    • The exchange destroyed all of the unissued FT tokens and decided to burn all 720M tokens held by the team
    • Coverage by CoinDesk & The Block
  4. CoinDesk: Bitcoin Mining Unit Manufacturer MicroBT Nibbles at Bitmain’s Market Share
    • BTC miner maker MicroBT sold ~600,000 units of its flagship WhatsMiner M20 series in 2019, which each generate a computing power of ~60 TH/s amounting to a total of +30 EH/s (1 EH = 1M TH)
    • The firm’s various models in its M20 product line are generally priced between $24 – $30 per TH
    • Because the network’s two-week average computing power more than doubled from 40 EH/s at EOY 2018 to ~100 EH/s at EOY 2019, nearly half of BTC’s computing power growth in 2019 may have come from MicroBT
    • BTC’s computing power stands at 110 EH/s, meaning MicroBT may account for ~30% of BTC mining power sold right now and is one of the largest and fastest-growing miner makers in the world
    • Crypto research firm Coinshares estimated that Bitmain’s dominance of sold BTC hash rate was ~65% as of Dec. 12, down from 75% in 2018 (this figure is outdated because total BTC hashrate grew +20% since)
    • Zhang noted that MicroBT has resumed its production in China following stagnation due to the spread of the coronavirus, “Currently, part of the logistics has also gone back to work. … So now the supply of miners is not a big issue but not every mining farm is physically accessible […] Large scale of investments may be affected because investors may not be able to do physical due diligence on facilities.”
    • Mining pool BTC.com estimates that BTC’s mining power is poised to decrease by -1.78% in ~8 days due to the coronavirus’s impact on mining facilities in China
  5. UEFA: Over 1M UEFA EURO 2020 Tickets to Be Distributed to Fans Via Blockchain
    • The Union of European Football Associations (UEFA) will use a blockchain-powered mobile app to distribute +1M tickets to soccer fans’ mobile phones for the UEFA Euro 2020 soccer tournament
    • The system will prevent the replication and duplication of tickets, as the mobile tickets’ QR codes are only activated via Bluetooth once fans are near to the stadium, and will allow fans to use the system to transfer tickets to guests
    • All tickets bought from Dec. 2019 onward will be logged on the blockchain
    • Coverage by CoinTelegraph & Decrypt
  6. bZx: bZx Attacked Again, $645K in ETH Estimated to Be Lost
    • After $350,000 in ETH was stolen on Feb. 14, bZx founder Kyle Kistner said the DeFi lending protocol was exploited once again, this time for ~2,388 ETH (~$645,000), “This attack appears to be an oracle manipulation attack. We can neutralize this like we did last time.”
    • bZx tweeted that the tx occurred using flash loans and trading on Synthetix, “It does not impact the Synthetix system though it did involve sUSD.”
    • The mechanism of the hack: 1) an attacker took out a 7,500 ETH flash loan, bought 3,518 ETH worth of sUSD for ~$1 and subsequently deposited it to bZx as collateral; 2) they then used 900 ETH to market buy sUSD on Kyber and Uniswap and therefore manipulate sUSD price to +$2, allowing the attacker to take out a larger loan than they were supposed to because the collateral appeared bigger than it was; 3) with this collateral, the attacker borrowed another 6,796 ETH on bZx and used it (as well as the remaining ETH balance) to repay the original loan
    • The attacker netted 2,388 ETH in profit (~$645,000) – the bZx ETH pool lost ~$1.8M while the sUSD pool gained $1.1M
    • Robert Leshner, founder of a DeFi lending protocol Compound, commented, “The bZx team has repeatedly demonstrated that it isn’t capable of protecting user funds, and should immediately cease operations until the platform can be thoroughly and completely audited.”
    • Coverage by The Block, CoinTelegraph & Decrypt
  7. Enjin: Enjin Platform: Now Live on Ethereum Mainnet
    • Enjin launched its game development platform on Ethereum mainnet to allow game engineers to take advantage of decentralized inventory, to integrate blockchain-based gaming and non-gaming assets, and to manage economic game play mechanics
    • Enjin CEO Maxim Blagov said, “Our platform is designed to integrate seamlessly into new and existing games alike, providing a competitive edge to studios of all sizes and across all genres.”
    • The Enjin Platform is a suite of tools and services based on a web interface that enables developers to integrate both fungible and non-fungible tokens (NFTs) in a single smart contract
    • The platform uses the firm’s ENJ token, which is used as a “minting resource” to back the value of in-game assets
    • So far more +2,500 projects have already been created on the testnet and Enjin expects to release a blockchain SDK for Godot, its open-source game engine, in 2Q2020
    • Coverage by CoinDesk
  8. People’s Daily Online: China—Blockchain Deployment Rises Amid Coronavirus Outbreak
    • Amid the ongoing coronavirus epidemic, China is increasing blockchain deployment to manage medical data, track supply of virus prevention materials and consult the public
    • China saw the launch of ~20 blockchain-based apps designed to help fight the coronavirus outbreak in the first half of February, most apps are used to manage citizens’ personal data
    • Coverage by CoinTelegraph
  9. CoinDesk: US Presidential Contender Michael Bloomberg Proposes ‘Clear Regulatory Framework’ for Crypto
    • Presidential candidate Michael Bloomberg published a financial reform plan that proposed creating a regulatory framework for crypto, advocating for greater consumer protection measures and a stronger financial system
    • The proposal suggests requiring financial institutions to monitor risk exposure, recording all financial txs in a centralized database, strengthening the Consumer Financial Protection Bureau, creating a regulatory sandbox for startups and “providing a clear regulatory framework for cryptocurrencies”
    • The proposal goes on to say, “Cryptocurrencies have become an asset class worth hundreds of billions of dollars, yet regulatory oversight remains fragmented and undeveloped. For all the promise of the blockchain, bitcoin and initial coin offerings, there’s also plenty of hype, fraud and criminal activity.”
    • The plan recommends clarifying which agencies are responsible for overseeing the space, creating a framework to clarify when tokens are securities, protecting consumers from crypto-related fraud, clarifying the tax regime, and defining the requirements for financial institutions in the space
  10. CoinDesk: BitGo Acquires Harbor in Surprise Expansion Beyond Crypto Custody
    • Crypto custodian BitGo, which allegedly processes 15% of all global BTC txs and conducts ~$15B in txs every month, acquired security token platform Harbor to expand beyond custody and become what CEO Mike Belshe calls the first “full-stack” service provider in the digital securities space
    • Harbor’s subsidiaries, which include a FINRA-regulated broker-dealer and an SEC-supervised transfer agent, are included in the acquisition; Belshe said this marks the first time a single crypto entity holds broker-dealer, transfer agent and a qualified custodian licenses (FINRA and the SEC must approve the broker-dealer and transfer agent transfers to BitGo, which Belshe said is already underway)
    • The CEO added, “As we build the market infrastructure for crypto there’s a lot of pieces to put together. At the end of the day the existing market has this huge advantage in having built up its structure over decades and we’re trying to replicate that in a short period of time.”
    • Harbor’s CEO Josh Stein stated, “One piece that we’ve been missing is custody. We’ve had a partnership with BitGo and so when you’re under the same roof things become possible, you make things more integrated than you could before, we’re exploring that now with BitGo, we’re trying to figure out what exactly the roadmap looks like.”
    • Stein is joining BitGo, but his exact role has not yet been defined
    • Belshe noted that BitGo plans to expand the number of assets it supports, particularly with security tokens, “We’re significantly decreasing the barrier to entry by pulling all of these things together. This gives us full capabilities around issuing and trading and transferring of security tokens.”
  11. Lition: Microsoft Welcomes Lition to the Azure BaaS Ecosystem
    • Microsoft has integrated Lition as a blockchain-as-a-service provider on Azure, “Organizations and businesses worldwide can now develop, test, and deploy Lition sidechains and applications easily and efficiently using Microsoft’s Azure cloud computing infrastructure.”
    • Lition’s CEO Richard Lohwasser said, “Lition is committed to providing an accessible onramp to blockchain for all organizations. We believe that making integration as seamless as possible is vital to bridging the gap to adoption. Azure will be a tremendous asset for our customers. We are excited to bring Lition to their marketplace and show people just how easy it is to put blockchain to work for their business.”
    • Lition’s vision is to be “the go-to solution for commercial use cases that handle private data in a legally compliant manner”
  12. CoinTelegraph: Bank of Korea Seeks to Deploy Blockchain in Bond Market
    • According to Yonhap Infomax, the Bank of Korea has been seeking a blockchain services provider to build a blockchain-based bond system
    • The central bank launched a trial in late 2019 to move bond tx records maintained by the Korea Securities Depository to a blockchain-powered base of records accessible by multiple nodes operated by South Korea’s regulatory authority, the Korea Fair Trade Commission, the Bank of Korea and other financial institutions
    • South Korea’s financial authorities have been testing the potential of blockchain in issuing state bonds to record txs, “We are using government bonds to record securities and cash transactions in a distributed ledger and test whether a real-time simultaneous payment trading system is possible.”
    • The blockchain research regarding the bond market is being conducted with reference to the purported first blockchain bond tx handled by the World Bank and the Commonwealth Bank of Australia in 2018
  13. The Block: Sia Blockchain Developer Nebulous Releases Decentralized File Sharing Platform
    • Nebulous, Sia’s (SC) parent firm, launched a decentralized platform built on top of Sia, dubbed Skynet, that enables high-speed, low-cost content distribution and file sharing
    • Sia has reportedly onboarded 1,000 – 2,000 users who have collectively stored +4M GB of data across +1M storage smart contracts
    • Nebulous CEO David Vorick said DApp developers can use Sia instead of centralized solutions, like AWS, for storage, “Anyone can run a server that allows them to touch the link. It’s not like Amazon’s cloud or Apple’s cloud, and the person who uploaded the file doesn’t need to seed the file. What it means is that you have this substrate for data where so long as a single person thinks that a file has a right to exist, that file is available to the entire world,” adding that users have “complete sovereignty over what you publish to the world.” 
    • The price of storing data on Skynet is ~$5 per TB per month, roughly 1/5 of monthly storage costs on AWS 
    • The current development kit supports Python, Nodejs and Go, and allows users to upload and download
    • The team is building out additional features, including instant migration from the InterPlanetary File System (IPFS)
  14. Decrypt: Warren Buffett’s Comments on BTC From Meal with TRON’s Justin Sun
    • According to a video posted by the Tron Foundation, Warren Buffett explained why he wouldn’t buy BTC at his recent meal with Tron CEO Justin Sun, “[Buffett] believes people get protection from stocks and equity. Bitcoin is simply a changing hands activity with no value added.”
    • Buffett believes BTC doesn’t have enough “practical value” as it only derives worth from trading and is incapable of storing value – making it “no different from a seashell”
    • The video concluded, “Bitcoin cannot capture the value of blockchain. Just because something has value doesn’t make it a good investment. Mr. Buffett says blockchain has its value. There are a lot of incredible companies in the payment market and it has huge demands. He believes blockchain technology will have a disruptive effect on the future of payment.”
  15. Copper: Copper.co Raises $8M to Expand Globally
    • Crypto custodian Copper raised $8M in a Series A funding round from investors such as Target Global, MMC Ventures and LocalGlobe, to expand its commercial team and launch new products for institutional clients
    • Copper uses a Walled Garden’s custody solution, which gives clients access to 15 crypto exchanges without moving funds out of custody
    • Copper founder Dmitry Tokarev said the Walled Garden covers 96% of global crypto liquidity and is seeing ~$650M in txs each month “with that figure growing steadily […] our Walled Garden and Prime Brokerage infrastructure truly looks after the security and trading needs of institutions, regardless of their investment strategies and goals. We are seeing volumes increase as our clients see the advantage of our prime brokerage solution, which allows them to make transactions across many trading venues securely and efficiently.”
    • Coverage by The Block
  16. Gulf News: Dubai Economy and Six Banks Launch KYC Consortium
    • The UAE’S Dept. of Economic Development (DED) of Dubai has established the KYC Blockchain Consortium with six major banks – Dubai gov’t-owned bank Emirates NBD, HSBC, Emirates Islamic, RAKBank, Abu Dhabi Commercial Bank and Commercial Bank of Dubai – for sharing KYC data between banks and licensing authorities in the region
    • The consortium, which is scheduled to launch in 1Q2020, is designed to accelerate processes like exchange of digital customer data and documents while ensuring security, as well as to bring a unified platform of KYC efforts among existing and future ecosystem members like qualified financial institutions and licensing authorities
    • DED Deputy Director General Ali Ibrahim said, “Our strategic alliance with banks to launch the first KYC blockchain platform in the UAE is an important step towards continuing to attract investors to this market. The platform will offer a digital ‘Instant Bank Account’ functionality, allowing for faster and less cumbersome onboarding journey with banks and significantly improving the experience of new investors looking to establish themselves in the UAE.”
    • The UAE Central Bank and Smart Dubai authority will monitor operations of the consortium
    • Coverage by CoinTelegraph
  17. Decrypt: We Tracked 133,000 Ethereum Names and Exposed Their Secrets
    • Decrypt analyzed 133,000 Ethereum names and their respective balances in the Ethereum Name Service (ENS), a platform that attempts to improve crypto UX by allowing users to send/receive crypto with a name attributed to their ETH address (similar to how email addresses tried to remove clunky code)
    • The researchers found that it was possible to identify several high-profile people and and their business deals even if real names weren’t used
    • The security flaw can even expose a user’s location if their identity is exposed and they purchase event tickets with crypto
    • ENS lead developer Nick Johnson said 6,235 ETH ($1.7M) has been spent purchasing ETH domain names (e.g., decrypt.eth)
    • The service also doxes prior wallet addresses associated with the ETH address used to register on ENS
    • Inside the 15,000 unique addresses that bought the 133,000 names, there is a combined total 364,000 ETH ($100M), and potentially millions of dollars of ETH-based tokens too (e.g., ERC-20)
    • ETH names make it trivially easy for criminals to create a list of people that have the most amount of ETH and likely have a hardware wallet in their home
    • Johnson added, “It’s well known that public ledgers like Bitcoin and Ethereum lack privacy, and that as a result it’s easy to track transactions made on these public blockchains. ENS makes it easier to exchange addresses for Ethereum and other cryptocurrencies, which makes them more generally useful to everyone. It doesn’t attempt to address the privacy issues inherent in public ledgers […] Ongoing research into privacy in distributed ledgers has led to breakthroughs such as ZCash and Tornado Cash. We strongly recommend people take care with what activities they expose on public ledgers, and take advantage of these solutions where appropriate.”
  18. WSJ: Morgan Stanley Is Buying E*Trade, Betting on Smaller Customers
    • Investment banking giant Morgan Stanley is buying crypto-friendly discount broker E*Trade Financial Corporation for $13B in all-stock deal, making it the largest acquisition by a U.S. bank since the 2008 crisis
    • Morgan Stanley’s CEO James Gorman said, “We’ll take on Schwab. We’ll take on Fidelity. This isn’t about legacy-building; it’s about getting [Morgan Stanley] ready for prime time.”
    • E*Trade has previously stated that they’re  preparing to offer trading in BTC and ETH
    • Coverage by The Block
  19. Banco Central do Brasil: Brazil’s Central Bank to Launch Instant, QR Code-Enabled Payments System This Year
    • Roberto Campos Neto, president of the central bank of Brazil, said the bank will launch an instant payments system enabled via QR codes by Novemberin response to crypto adoption, “If we think about what has happened in terms of the creation of bitcoins, cryptocurrencies and other encrypted assets, it [PIX] comes from the need to have an instrument with such characteristics.” 
    • The bank said the PIX system will “make it faster and easier to carry out transactions, which will be performed with a QR Code or by entering simple information such as cell phone number, email or taxpayer identification.”
    • Licensed financial institutions will have to mandatorily participate in PIX, “These institutions must provide their customers with all the functionalities for initiating and receiving instant payments.”
    • PIX is the “centralized” settlement infrastructure and will be operated and managed by the central bank
    • Coverage by The Block
  20. SEC: Statement on Continued Dialogue with Audit Firm Representatives on Audit Quality in China and Other Emerging Markets; Coronavirus — Reporting Considerations and Potential Relief
    • The SEC urged publicly-listed companies to factor coronavirus risks in their financial reporting disclosures because companies may have “significant” operations in China and other jurisdictions that may be affected by the coronavirus or may have their suppliers, distributors and/or customers in those regions
    • Firms should work with their auditors to ensure that their financial reporting and auditing processes are “as robust as practicable in light of the circumstances in meeting the applicable requirements”
    • According to Worldometer, +2,000 people have died from the coronavirus as of Feb. 20, while +75,000 cases have been confirmed in 30 countries and territories
  21. CoinDesk: Tim Draper Buys 2.5% of Aragon Tokens, Becomes Governance Whale
    • VC Tim Draper bought a 1M ANT stake (~$760,000) in Aragon, a decentralized governance project that began on Ethereum, and now controls ~2.5% of Aragon’s total token supply
    • The Switzerland-based Aragon Association is attempting to build a digital judicial system for decentralized autonomous organizations (DAOs) and its own Aragon network, dubbed Aragon Court, which any ANT holder with 1,000 tokens can participate in
    • Aragon Association Executive Director Luis Cuende said Draper came on board after seeing the Aragon court go live, “I think the recent launch of Aragon Court and the realization that Aragon can be to governance what bitcoin (BTC) is to money” prompted Draper to join
    • Draper will also sit on Aragon’s advisory board
  22. Bloomberg: Fortress Said to Increase Offer to Purchase Mt. Gox Claims
    • According to a source familiar with the matter, private-equity & hedge-fund firm Fortress Investment Group increased its offer to purchase creditor claims from defunct crypto exchange Mt. Gox in the wake of this year’s +40% BTC rally to +$10,000
    • The offer was increased +72% from $755 to $1,300 per BTC, or 88% of its estimated account value
    • Fortress managing director Michael Hourigan said the firm is making the discount offer “due to the likely timeline (3 to 5 years) and financial risk of the ongoing litigations” involved in getting money from Mt. Gox
  23. SEC: ICO Issuer Settles SEC Registration Charges, Agrees to Return Funds and Register Tokens As Securities
    • The SEC settled charges against blockchain startup Enigma MPC for conducting an unregistered offering of securities in the form of a $45M ICO in 2017
    • Enigma agreed to return funds to harmed investors via a claims process, register its tokens as securities, file periodic reports with the SEC, and pay a $500,000 penalty
    • SEC Associate Director for Enforcement, John T. Dugan, said, “All investors are entitled to receive certain information from issuers in connection with a securities offering, whether it involves more traditional assets or novel ones. The remedies in today’s order provide ICO investors with an opportunity to obtain compensation and provide investors with the information to which they are entitled as they make investment decisions.”
    • Enigma consented to the order without admitting or denying its findings
  24. Riksbank: Testing for Sweden’s Central Bank Digital Currency Project Begins
    • Riksbank, Sweden’s central bank, has begun piloting its central bank digital currency (CBDC), the e-krona; the pilot will last until Feb. 2021
    • If the e-krona formally launches for use by the public, it will drive conventional payments and banking activities throughout the country
  25. Shopify: Shopify Joins Libra Association
    • E-commerce giant Shopify has joined the Libra Association, “As a member of the Libra Association, we will work collectively to build a payment network that makes money easier to access and supports merchants and consumers everywhere.”
    • Shopify added, “Our mission is to make commerce better for everyone and to do that, we spend a lot of our time thinking about how to make commerce better in parts of the world where money and banking could be far better […] This is one step, but not the only step we’ll be taking to be a part of the solution to this global problem.”
  26. Decrypt: Forbes Blockchain 50—Blockchain as a Service Is In, Mining Is Out
    • Forbes released its annual Blockchain 50 list of the top-50 firms integrating DLT into their business and found that the number of mining companies has declined while blockchain-as-a-service (BaaS) is growing
    • To make the list, members must be generating >$1B in revenue annually or be valued at >$1B
    • Despite BTC miners generating a reported $5B in mining rewards in 2019, the number of mining-related firms making the list has halved since last year
    • Notably, the UN, which currently has several different blockchain efforts underway and plans to use the tech to help its Sustainable Development Goals, made the list
    • Crypto mining hardware manufacturer Bitfury is the only mining company to be listed, while Fidelity was cut despite their large mining operation
    • The majority of the firms on this year’s list tend to use blockchain for the same restricted set of use-cases, including the tracking of goods in the supply chain, cross-border payments and redundant data storage
  27. Paxos: Paxos Settlement Service Begins Settling U.S. Securities Trades For Credit Suisse and Instinet
    • Paxos launched the Paxos Settlement Service – a private, permissioned blockchain solution designed to allow bilateral settlement for select U.S.-listed equity trades between broker-dealers Credit Suisse and Instinet (subsidiary of Nomura Bank); the service was launch under No-Action relief from the SEC
    • French multinational investment bank Société Générale will soon begin settling with Paxos Settlement Service as the third participant
    • Paxos will apply for clearing agency registration with the SEC in 2020 so that it can offer the new service to all street side broker-dealers
    • Paxos co-founder Charles Cascarilla stated, “Launching Paxos Settlement Service under No-Action relief is the first step in our journey to transform post-trade infrastructure in the securities industry. We’ve worked closely with Credit Suisse and Instinet to build a solution that can deliver long-term cost benefits and together we will refine the system in a live environment. Our upcoming application for clearing agency registration demonstrates our dedication to modernizing market structure on a large scale.”
  28. The Block: Binance Is ‘Not Authorised’ to Operate in Malta, Says the Country’s Financial Regulator
    • The Malta Financial Services Authority (MFSA) said Binance “is not authorized by the MFSA to operate in the crypto currency sphere and is therefore not subject to regulatory oversight by the MFSA,” adding that recent media reports referred to Binance incorrectly as a “Malta-based cryptocurrency firm.”
    • The regulator continued, “The Authority is however assessing if Binance has any activities in Malta which may not fall within the realm of regulatory oversight. Admission of virtual financial assets to trading and/or for offering virtual financial assets to the public in and from Malta requires an MFSA licence in terms of the Virtual Financial Assets Act (CAP 590) of 2018.”
    • Binance CEO CZ replied, “There is a mix of truth, FUD & misconception. http://Binance.com is not headquartered or operated in Malta. This is old news & has always been the case, hence there is quite a bit of FUD turning this into a breaking story. The community’s comments show that understanding. There are misconceptions some people have on how the world must work a certain way, you must have offices, HQ, etc. But there is a new world with blockchain now. Again, some of our community understands this, and some don’t. Hence, lots of confusion. Binance has a number of regulated entities around the world, either operated by our partners or by http://Binance.com directly. We work closely with regulators and comply with the rules in the places where we operate.”
  29. Decentraland: Ethereum-Based VR World Decentraland Has Launched
    • Decentraland, an Ethereum-based virtual-reality world where users purchase virtual real estate in the form of a non-fungible token (NFT) called LAND, launched on Thursday
    • According to data tracker NonFungible, ~$1M in virtual land was sold in the past 10 days, making it by far the most traded asset on Ethereum
    • Developers can use Decentraland’s SDK to create interactive 3D scenes on their purchased lands without having to code and players can trade land, accessories, and avatar wearables & names on a marketplace 
    • Mark Murphy, COO of Digital Currency Group and investor in Decentraland and Mana, said, “We believe it’s inevitable that people will spend a significant amount of time in virtual worlds.” 
    • The project is already trading >10x more virtual property than CryptoKitties, which nearly brought Ethereum’s network to a  halt due to tx congestion in late 2017
    • Decentraland project lead Ari Meilich added, “The users are in control of the digital assets, which is something that hasn’t happened before. We think that over time players will gravitate toward games where they are more in control.”
    • Decentraland has used about half of the $20M ICO proceeds to pay >30 developers who have worked to build it out
    • Meilich said the community hopes to have several hundred thousand users within a year
    • Coverage by Bloomberg & The Block
  30. The Block: IOTA Foundation Expects to Reactivate Network by March 2 Following $2M User Wallet Attack
    • Following a ~$2M hack that prompted the IOTA Foundation to pause its mainnet, the team announced that by Mar. 2 they expect to resume its mainnet after they finish developing transition tools for users to transfer their funds from their existing accounts to new ones 
    • IOTA Foundation co-founder Dominik Schiener said the hacker exploited a vulnerability in MoonPay, a fiat on-ramp platform integrated with IOTA’s Trinity wallet software, and then distributed malicious SDK packages to users, “The biggest fault that we have made was to not integrate the NPM package and properly security auditing the integration. Human error and the pressure to release a new version ASAP ultimately lead to this mistake.” 
    • The team has been working with the German Center for Cybercrime and the FBI to investigate the attack, some stolen funds have already been transferred to exchanges
    • Schiener added that the team is will disclose its remediation plan to refund victims of the attack next week and that they’ve identified 50 victims so far, but it doesn’t know how many users received malicious SDKs
    • The Foundation asked all Trinity users to transfer their tokens to new accounts, “One important thing is obviously that this does not affect all IOTA users, but only affects Trinity users of the Trinity desktop wallet. So everybody else is safe and doesn’t have to worry about this.”
    • While the move to pause the mainnet was controversial because IOTA is supposed to be decentralized, IOTA Foundation co-chair David Sønstebø said the foundation believes this mechanism is essential to the network’s development during its early stages, “I know that is controversial in a space where decentralization is all that matters until something like DAO happened and you could roll back the blockchain anyway… this [pausing the network] was an extraordinary measure in response to an extraordinary event and it’s important to get across, at least from our perspective, that no one at the IOTA Foundation or the IOTA project is happy that we had to take such extreme measures […] But we are happy that we were able to. And that we’re taking the safe route.”

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