Bitcoin and cryptocurrency round-up 21 September
Is a bitcoin breakout coming? Zaif exchange gets hacked and New York AG accuses biggest exchanges of poor integrity. Here's your daily crypto wrap.
Lots going on in the markets right now -- with quite a few altcoins out-performing bitcoin.
Bitcoin has now broken through the $6500 mark, though.
According to technical analysis from CoinDesk, traders will be sitting on their hands a while longer, as there's still no clear indication of a break until around the $6,600 level, which is identified as the next target
And as this chart shows, Bitcoin pretty much sideways over last 30 days.
XRP has been performing strongly all week, but has spiked over 40% in the last 24 hours.
Changing hands for 46 cents USD at press time -- up from 28 cents a week ago.
Earlier this week, Ripple's head of regulatory relations for Asia-Pacific and the Middle East Sagar Sarbhai told CNBC that we will likely see real-world adoption of the company's xRapid product -- which actually uses XRP -- in the next month or so.
Block.one has released the latest version of eos.io. Version 1.3 contains an improvements to speed via new features for block producers, as well as a new SDK for smart contracts in C++, something that sets EOS apart from competing blockchains like Ethereum.
They have also announced the release of BancorX, which we reported on several days ago via a leaked blog post. BancorX will allow for cross-chain trading between EOS and Ethereum.
EOS is currently up by about 9% in the last 24 hours at $5.74 USD.
VeChain Thor, the token of the VeChain network which is aimed towards supply chain management and dApp development, is enjoying a nice little boost off the back of it's fourth financial report.
The report details what how funds have been spent, as well as how much. That kind of transparency is relatively rare in cryptocurrency, so it's no surprise trader sentiment is positive.
VET is currently up about 6%.
Crypto news update
Japanese exchange Zaif hacked, $60 million lost
Japanese exchange Zaif has been hacked, losing about $60 million worth of cryptocurrency across bitcoin, Bitcoin Cash and Monacoin.
The attack seems to have been planned to take place right at the end of the work week, occurring Friday evening which meant that the exchange operators were unaware of anything being wrong until Monday - discovering the funds lost on Tuesday - and not reporting it till Thursday.
The funds were taken from one of the exchange's hot wallets. Two-thirds of funds belonged to users, with the remaining third belonging to the exchange.
News: Attorney General's report prompts accusations
The drama rolls on today with the release of a report by the New York State Attorney General, which sought to investigate integrity of cryptocurrency exchanges and their practices. The results of the report, named Virtual Markets Integrity Initiative have since ignited arguments between government and exchanges in both directions.
Before we go on, a bit of background on the report and how it works.
The initiative invited 14 exchanges who ostensibly operate in New York to complete a questionnaire about their organisation's practices.
4 exchanges declined to participate, saying they didn't trade in New York. The 4 exchanges were then investigated to see if this was true.
The report now alleges that 3 of those 4 exchanges were not telling the truth. They have now been reported to the Department of Financial Services for potential violations of New York's strict virtual currency regulations.
The exchanges reported were Binance, Kraken, Gate.io.
The rest of the report received voluntary information from major exchanges like Coinbase, Bitfinex, Gemini, Bittrex, Poloniex, BitStamp.
Together, with the 4 exchanges that were investigated, which also included Houbi, these exchanges accounted for staggering $76 billion of trade in the last 30 days, according to CoinMarketCap's adjusted volume data.
So we're dealing with some seriously big firms here, and unfortunately the feedback wasn't good at all. We have a few quotes from the report here, which shows at atmosphere of distrust by the Attorney General's office
"substantial potential for conflicts between the interests of the platform, platform insiders, and platform customers"
The report noted this was due to exchanges offering their own currency which is traded against others on the platform, Eg, Binance Coin, and exchanges having investments in cryptocurrency which are traded on the platform.
"Trading platforms have yet to implement serious efforts to impede abusive trading activity"
Some exchanges have taken steps to police the fairness of their platforms, the report notes, but most haven't.
"Protections for customer funds are often limited or illusory"
According to Franklin Bi - associate director at Wachsman Strategic Advisory Group and former blockchain strategy lead and VP for JPMorgan - the findings will have ripple effects over the next six months to a year. He says;
"The ramifications of this report will play out over 6-12 months, at least. The New York Attorney General’s Office leads the nation on these types of issues and this is as clear as it gets. Today is also vindication for everyone who sounded the alarm on how much improvement is needed across cryptocurrency market infrastructure. It may be tempting to dismiss this report as a one-off event, but it could be the beginning of a series of actions at the federal and state level."
The crypto industry are hardly ones to lay-down and take it from the government. Like I said before, this report has prompted accusations in both directions.
Kraken has come out of the gates swinging. For context it is one of the exchanges that provides trade data to CME to calculate its bitcoin futures contracts. CBOE are the second firm in America offering those same futures contracts.
So with that in mind, Kraken is now suggesting that the release of the report - one day before the expiration of CBOE futures contracts - is not dissimilar to an attempt at insider trading by someone within New York State Attorney General's office.
Certainly a big accusation. Although it may have been more of a tongue-in-cheek way of highlighting the potential for abuse in markets beyond cryptocurrency, rather than a serious accusation. "Quis custodiet ipsos custodes?" as Kraken said.
Kraken's stance toward the inquiry was clearly established months ago when the inquiry first began, and hasn't shifted since. This is what Kraken had to say back in April when it was asked to participate.
"We encourage regulators to resist the temptation to just swing at whatever's within arm’s reach. Think about your long-term strategy. If you make life too difficult for your neighbors, they might move away. And then you will be attempting to protect your consumers from the guys across the ocean, who couldn’t care less about your strong right hook," Kraken said. "Whether you think you have us by the balls or not, approaching us with some basic respect and having a conversation is always going to make the interaction smoother and help you get what you want faster than storming in with your 'or else' list of demands."
Strong words from the Kraken camp.
Blockchain can help the environment
Before we go let's move onto something more positive.
The World Economic Forum (WEF) has revealed a new study which has revealed over 65 different ways in which blockchain can help some of the most pressing issues facing environment.
Six key areas were specified as benefiting from the new technology, including;
• Climate change
• Water security
• Clean air
• Weather and disaster resilience
A pretty comprehensive list there. A few specific uses cases were given, like:
• Ensuring sustainability in supply-chains
• Funding mechanisms for low-carbon and sustainable economies
• Green energy trade (much like Power Ledger are already doing)
Pretty incredible considering it all started with a single whitepaper published by an anonymous forum user.
Here's an inspiring quote from Celine Herweijer, a partner at PwC UK, who published the report
"There is an opportunity for fresh ideas to harness this nascent technology to help deliver big gains for our environment. From transparent and trusted clean and ethical supply chains, to incentivising sustainable consumption and production, or underpinning the much needed transition to low carbon decentralised energy, water and mobility systems."