South Korea Budgets Nearly $4.5B for Blockchain, Emerging Tech

16.08.2018 bitcoinbabeau 0

South Korean Bithumb Exchange Loses $30M in Latest Cryptocurrency Hack

South Korea is planning to invest nearly $900 million next year to accelerate the development of blockchain, artificial intelligence and other emerging technologies.

In an August 14, 2018, press release from the 5th Ministerial Meeting entitled Growth through Innovation, Deputy Prime Minister Kim Dong Yeon is summarized as saying “The government has decided to work on a platform economy, whose impact is powerful and far-reaching.”

“There have been discussions among ministries and private sector experts on how to develop a platform economy, and we have come up with the four projects in which we will continue to invest with a long-term perspective,” the statement continued.

The projects that he outlined included:

  • building a digital platform for big data and AI, along with promoting blockchain technology to secure data transactions and the sharing economy;

  • setting up a hydrogen fuel cell supply chain; and

  • developing an education program to meet the demand for a qualified workforce for these industries in the future.

While the release did not specify how the funds will be allocated, a total of five trillion won (approximately $4.5 billion) will be spent in 2019 on eight pilot projects for the digital platform economy, an increase of over two trillion won ($1.75 billion) from 2018. Over the next five years, Yeon anticipates that a total of nearly 10 trillion won ($9 billion) will be spent on the projects.

The news follows an announcement in June of this year from The Ministry of Science and ICT which revealed a blockchain technology development strategy aimed at securing a global competitive edge in the emerging technology. The ministry will invest in six pilot projects across an array of industries to kick start the process. The government also announced its intentions to establish a blockchain technical support center to help improve the technological competitiveness of private companies and to provide facilities where companies can test their blockchain platforms and services.

This article originally appeared on Bitcoin Magazine.

Pantera Capital’s Third Venture Fund Raises $71M, Eyes $175M

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pantera capital

Blockchain investment firm Pantera Capital recently launched its third cryptocurrency fund. Known as Venture Fund III, the company completed all necessary filings with the U.S. Securities and Exchange Commission (SEC) last Wednesday, and the event is already making impressive headway in the cryptocurrency space. So far, the fund has garnered over $71 million from roughly 90 different investors.

But this capital is just a small fraction of what the fund’s executives feel it can accrue. Firm partner Paul Veradittakit explains that the company expects to bring in approximately $175 million in funding, which would be the highest monetary allocation in Pantera Capital’s history. Veradittakit explains that the target amount is a “function of how fast the space is moving, the talent coming in, the opportunities, and the sizing of rounds.”

“With more interesting later-stage investments [on our radar] too, we want to be flexible and able to move with the market,” he continued.

Pantera representatives say they’re planning to use the money to invest in Bakkt, a new platform from the Intercontinental Exchange (ICE). Set to launch this November, Bakkt’s primary goal is to assist retailers in buying, trading and selling digital currencies. Pantera’s work with Bakkt would make it a founding investor.

Pantera Capital has developed an impressive reputation in the cryptocurrency space. During its five year lifespan, the company has recorded over 10,000 percent returns. Some of the venture’s most successful and popular investments include Ripple, Circle, Korbit and Bitstamp.

CEO Dan Morehead recently commented that bitcoin investors were “overreacting” to the news that the SEC had pushed its decision regarding the VanEck SolidX bitcoin ETF to September 30, and that platforms like Bakkt deserved everyone’s focus and attention, as they would have greater, more positive impacts on the market.

“I still think it will be quite a long time until an ETF is approved,” he says. “The last asset class to be approved for ETF certification was copper, and copper has been on Earth for 10,000 years. The main thing to remember is that bitcoin is a very early-stage venture, but it has real-time price feed, and that’s a unique thing. People get excited about the price and overreact … The ETF rejection is the same story we’ve had for five years. The SEC has been very cautious with an ETF,” the CEO expressed.

This article originally appeared on Bitcoin Magazine.

U.S. Investors Can Now Buy a Bitcoin Exchange-Traded Note

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etn

American investors can now invest in bitcoin Exchange Traded Funds (ETF) through an Exchange-Traded Note (ETN) called Bitcoin Tracker One on the Nasdaq Stockholm Exchange in Sweden, per a Bloomberg report.

The product, which started trading in 2015, is currently available to American investors despite being listed and regulated under Swedish law after being listed in U.S. Dollars for the first time on Wednesday, August 15, 2018.

Crypto ETF Through the Back Door?

For several months, investors have eagerly awaited approval from the SEC and CFTC to trade ETF products proposed by CBOE Global Markets, the Winklevoss Twins, SolidX Partners and VanEck Associates, among others. Each of these proposals has either been refused out of hand or delayed to a future date for a concrete decision.

Crypto ETFs potentially allow investors to trade crypto without holding crypto assets because they are cash settled. For potential crypto investors who do not want to actually buy crypto assets, the regulatory delay in the U.S. has effectively prevented them from getting into the market.

Until now, investors could only buy into the Swedish ETN product using Euros or Swedish Kora, but, with the listing of Bitcoin Tracker One in U.S. Dollars, a substantial upsurge of interest in the product is expected to take place as American investment jostles to get a seat at the table.

ETN as an ETF Alternative

An exchange-traded note differs from an exchange-traded fund in that unlike the latter, it is backed by its issuer, which is usually a bank, instead of an asset pool. Its market strategies are also substantially different from those of a fund. In practice, what this means to American investors is that, regardless of their government’s regulatory position, they now have access to a foreign-listed crypto market asset denominated in USD.

Investors are now able to buy F shares, meaning that U.S. dollars are used to execute trades, while settling, clearance and custody takes place in Sweden.

Ryan Radloff, CEO of CoinShares Holdings Ltd., the parent of XBTProvider, the company offering the ETN, told Bloomberg that the development “is a big win for Bitcoin.”

“Everyone that’s investing in dollars can now get exposure to these products, whereas before they were only available in euros or Swedish krona,” he added.

Bitcoin Tracker One is down 51 percent in 2018 amidst a general crypto market slump, but it is expected to welcome an inflow of cash from American institutional investors. This latest development could also create a more compelling case for U.S. regulators to approve a crypto ETF by establishing a positive example of regulated crypto trading.

This article originally appeared on Bitcoin Magazine.

Square’s Cash App Now Supports Bitcoin Trading in All 50 States

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cash app

Mobile payment company Square is expanding its bitcoin trading support to all 50 states through its Cash App. This means that residents in all corners of the U.S. can utilize the platform to purchase and sell the digital currency.

The company was co-founded in 2009 by tech entrepreneur Jack Dorsey, who also heads Twitter. Last March, Dorsey was quoted as saying that bitcoin will likely serve as the world’s “single currency” in roughly 10 years.

Square’s announcement is particularly intriguing in that most bitcoin- or crypto-trading apps do not offer their services in every state. Robinhood, for example, only offers bitcoin and ether trading in 19 states including Arizona, California, Florida, Utah, Mississippi and Indiana, while other apps, such as Coinmama and CEX.io, are available in 23 and 24 states respectively. Entities like itBit — which also holds a New York–issued BitLicense — operate in every state except Texas.

Square originally launched bitcoin-trading capabilities on its app in November 2017 to only a handful of users. In January of this year, the company expanded the app’s trading services to virtually every state except Wyoming, Georgia, Hawaii and New York due to restrictions that placed limits on cryptocurrency transactions. In June, the company acquired a BitLicense to operate in the Big Apple and later announced that it had more than doubled its crypto-based income between quarters one and two from $34 million to $70 million.

“We are thrilled to now provide New Yorkers with Cash App’s quick and simple way to buy and sell bitcoin. Square and the New York State DFS share a vision of empowering people with greater access to the financial system and today’s news is an important step in realizing that goal,” stated Brian Grassadonia, head of Square’s Cash App, yesterday regarding the venture’s new relationship with New York.

Cash App downloads have grown three times faster than its competitors and later surpassed the company’s figures for the first time. The app now boasts an impressive 33.5 million users — about 3 million more than Venmo. It is also expected to top $100 million in sales by the year 2020.

This article originally appeared on Bitcoin Magazine.

BitAngels Founder Sues AT&T for $224 million Following Wallet Hacks

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at&t

BitAngels founder Michael Terpin has filed a $224 million lawsuit against telecoms provider AT&T, alleging that its negligence led him to lose about $24 million worth of cryptocurrency to fraudsters, according to a CNBC report. In a 69-page deposition to the Los Angeles U.S. District Court on August 15, 2018, Terpin claims that AT&T “willingly” cooperated with hackers who co-opted his identity and thus gained access to his crypto wallets.

Crypto Wallet Hack

According to the filing, Terpin suffered two separate hacks within seven months of each other, with the second hack resulting in a loss of nearly $24 million in token funds.

He says that a fraudster successfully obtained his phone number by cooperating with an insider, escaping the otherwise mandatory identity check that would be required to get such information. After obtaining the phone number, according to the complaint, the fraudster was able to gain access to Terpin’s crypto wallet and steal his funds.

An excerpt from Terpin’s complaint reads as follows:

“What AT&T did was like a hotel giving a thief with a fake ID a room key and a key to the room safe to steal jewelry in the safe from the rightful owner.”

In its emailed response to the media, AT&T maintained its innocence, stating that it disputes the allegations and looks forward to presenting its case in court. Terpin is seeking a payout of $200 million in punitive damages in addition to $24 million in compensatory damages.

The event once again brings into focus the lingering security issues within the crypto space, coming on the heels of news that John McAfee’s “unhackable” BitFi wallet has allegedly been breached for the second time in as many weeks.

As one of the industry’s pain points, crypto fund security has long been identified as an existential threat to the entry of traditional financial institutions into the space. A number of solutions like Coinbase Custody and a proposed Goldman Sachs crypto custody solution have been mooted as potential solutions to the problem.

Alongside Roger Ver and Brock Pierce, Terpin currently runs BitAngels, an angel investment group specifically directed at bitcoin and cryptocurrency entrepreneurs, and the BitAngels/DApps Fund which focuses on digital currency.

This article originally appeared on Bitcoin Magazine.

Vietnamese Government Bans Mining Hardware Imports

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Vietnam

Following a high-level proposal in July to ban the importation of all cryptocurrency mining equipment into Vietnam, the Vietnamese Customs Department has announced a total ban on all mining rig imports, according to a local news outlet.

The ban comes at a time when the country is dealing with the fallout of July’s Sky Mining scandal, which saw the CEO of a crypto mining firm abscond with more than $35 million in company and investor funds.

Zero Tolerance Stance

According to data from the Ho Chi Minh City Customs Department, crypto mining equipment imports were shuttered by officials in July 2018. Before the restriction, private individuals and firms in the country brought in more than 3,664 mining rigs between January and June. These imports mostly consisted of Bitmain’s Antminer ASIC rigs.

Last year, more than 7,000 mining rigs were imported into the country despite the government’s noted anti-crypto stance. Following the Sky Mining scandal last month, however, local Vietnamese news outlets report that the Vietnamese Customs Department almost instantly imposed total import restrictions on miners, indicating that the government’s negative stance on crypto has morphed into open restriction.

Government Regulation

Prior to the policy change, Vietnam’s government had a reputation for being unwilling to regulate the cryptocurrency industry, bluntly declaring last year that bitcoin and other cryptocurrencies are not “lawful means of payment.” It also explicitly stated that issuing or using crypto as a means of payment within Vietnam is forbidden, indicating that it had no intention of officially engaging with crypto finance, whether the government has the resources to suppress it or not.

Despite the rhetoric, crypto mining persisted as a big business in Vietnam, with port authorities in Hanoi and Ho Chi Minh City issuing clearance for thousands of mining rigs intended to mine bitcoin and litecoin in 2017.

Officially, dealing with cryptocurrency trading has carried with it the risk of criminal prosecution and a fine of up to $9,000, but, until recently, the government generally seemed to turn a blind eye to crypto mining.

In May, the government decided to fine bitcoin.vn, a popular Vietnamese crypto exchange. The following month, Sky Mining investors who were already spooked by regulatory aggression toward crypto businesses noticed people claiming to be “maintenance personnel” clearing out the company’s mining facility. The personnel transported the mining rigs to an unknown destination while investors were left with no information other than a Facebook post by CEO Le Minh Tam, where he apologized and promised to declare bankruptcy.

This article originally appeared on Bitcoin Magazine.

Wyre Adds MakerDAO Stablecoin Pairing for Global Money Transfers

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MakerDao

Blockchain money transfer company Wyre has announced a partnership with MakerDAO, creator of the Dai stablecoin, to offer Dai as part of a fiat-crypto trading pair in more than 30 countries across the world including the U.S.

Under the new framework, Wyre’s regulated money transfer infrastructure will be used to facilitate the instantaneous movement of “fiat currency directly into and out of Dai,” thereby removing the unpredictability of “speculative cryptocurrencies like Ethereum and Bitcoin” and benefiting from the speed and security of the blockchain, a press release for the announcement states. The arrangement is designed to give customers a quick and secure money transfer protocol that offers full regulatory compliance.

“Pairing Dai to Wyre’s trading engine and global fiat on-ramps and off-ramps will enable nearly-instant movement of funds across borders. By decreasing the amount of time it takes to clear payments, businesses can increase the number of payment cycles, therefore increasing revenue. Remittance platforms or crypto services can also settle instantly in Dai rather than using international wires which can take up to 48 hours,” the release continues.

Through the partnership, Wyre now offers prospective users an Access Point Interface (API) to connect their bank accounts to the blockchain through Dai, while taking care of KYC/AML compliance and onboarding concerns. Using the API, users can now trade Dai against many of the world’s major fiat currencies and cryptocurrencies including USD, GBP, EUR and more.

Speaking with Bitcoin Magazine, Rune Christensen, CEO of MakerDAO, said the alliance would be beneficial to API developers who can leverage Wyre’s experience as a regulated money service business and focus on creating access from local currency to Dai to fulfill global transactions.

“Through this partnership, we are now helping API developers leverage Wyre’s experience in banking and compliance so they can take advantage of the stability of Dai stablecoin to build and engage their communities, cutting through the red tape, and leaving the off-chain complications to a regulated money services business,” he stated.

“As it relates to the supply chain, organizations that may have been hesitant to engage in crypto transactions can now go directly from fiat currency into Dai stablecoin without having to take the middle step of converting fiat to ETH and then to Dai.”

For his part, Wyre CEO Michael Dunworth indicated that the partnership offers users around the world a cost-effective means of breaking through bureaucratic red-tape in a compliant manner. In his own interview with Bitcoin Magazine, he said, “We’re committed to developing partnerships with leaders like MakerDAO to enable the blockchain ecosystem to evolve at a faster pace.”

Since its launch in 2017, Dai has maintained its advertised USD valuation, which has earned it the respect and esteem of the crypto community. Unlike other popular stablecoins like Tether and TrueUSD, which are backed by fiat, Dai is crypto-collateralized, backed by coins like ether and bitcoin.

This article originally appeared on Bitcoin Magazine.

Distributed Dialogues: Weighing In on Privacy Implications

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Distributed Dialogues: Weighing In on Privacy Implications

At the recent Distributed 2018 conference in San Francisco, Rick Lewis and Dave Hollerith from the Let’s Talk Bitcoin Network interviewed a host of different personalities in the blockchain space about digital privacy.

First, the team interviewed David Chaum, one of the forefathers of cryptocurrency as we know it today. Starting from these humble beginnings, Chaum describes a brief history of the earliest days of digital money, as he built much of the enthusiasm for cryptography himself. His brief account of his work in the field gives a huge amount of insight into the culture and passion for privacy that eventually birthed modern cryptocurrency.

Reuben Yap, chief operating officer of ZCoin, spoke about some of the cultural challenges in being the first real private cryptocurrency in Malaysia.

Yap believes that the most important way to emphasize this concept of digital privacy to a skeptical audience is by putting the issue in financial terms. As Yap puts it, people expect a higher degree of privacy from banks regarding the value of their assets, and he believes that he can tap into this expectation on a greater scale. The platform of ZCoin ultimately seeks to give crypto financial systems an equal expectation of privacy that regular banks would, and this ambitious goal sets it apart.

Finally, Patrick Byrne, founder and CEO of Overstock.com, talks about the path that led him to cryptocurrency as well as what he’s observed entering the space as a mainstream investor. Seeing the overreach that many investment firms are capable of in securities trading, Byrne envisions a model of using blockchains to make transactions much more equitable. His experience provides a firm basis for a mistrust of current Wall Street practices, and a way to use blockchain smart contracts to enforce regulations on privacy.

These interviews and more will be periodically available on the Let’s Talk Bitcoin Network over the next several days as the team from Distributed Dialogues releases interviews on a great number of topics in the crypto space from the Distributed 2018 conference.

This article originally appeared on Bitcoin Magazine.

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