Central Banks Have No Use For Cryptocurrencies

Anna Webb
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Central Banks Have No Use For Cryptocurrencies

It’s not that central banks are against cryptocurrencies, they just don’t see how they could use them to improve the financial system.

That seems to be the opinion of many of the world’s leading central bankers after a discussion at Money 2020 in Amsterdam.

The summit was attended by Dr Thomas Moser, of the Swiss National Bank; Dr Marius Jurgilas, of the Bank of Lithuania; Martin Etheridge, from the Bank of England; and James Chapman, representing the Bank of Canada, among others.

They agreed that tokens may have a role in unlocking new sources of finance for businesses – and by tokens the bankers mean cryptocurrencies like Bitcoin and Ethereum.

The topic followed on from other central bank discussions earlier in the year, like the IMF World Bank meeting and confirmed central bankers just don’t have an opening that cryptocurrency would improve.

Spending digital currencies

The Bank of England, among others, argues that the success of a digital currency is not the value in the marketplace but how easily consumers can spend the token in a shop and the confidence consumers have in holding the currency.

This week’s blitz against the value of Bitcoin following a multi-million dollar hack in South Korea is just one recent example of a lack of confidence consumers have in digital currencies.

So what will a global digital currency look like?

It’s likely to start out as a hybrid of something between a fiat currency, like the Pound or US dollar with a digital infrastructure like the blockchain underlying Bitcoin and Ethereum.

Implementing the blockchain

One issue is the value of the single currency against local currencies.

The world has already seen how a weak economy with a currency pegged to a strong economy can lead to problems.

The economies of Greece, Spain, Ireland and Portugal all suffered because the governments had no room to manoeuvre within the Eurozone, while the economies of Germany and France powered on.

And how much will someone in Venezuela experiencing 1000% inflation get for their bolivars compared with someone in the US with a fistful of dollars?

Calling for a global digital currency is one thing, but fairly implementing the system is another.

How To Buy A Lambo In 30 Minutes

Anna Webb
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How To Buy A Lambo In 30 Minutes

If you have a few million dollars stashed as Bitcoin or other cryptocurrency, the chance is you will want to lavish some of your cash on gifts for yourself and your loved ones.

But liquidating that cash you need to buy a Lambo is not always that easy.

Switching the altcoin to hard cash is often the easy bit.

Negotiating high transaction charges on exchanges, low daily exchange limits and picking the best time to liquidate in the rollercoaster world of digital currency values can be a challenge that takes some weeks to unravel.

But Elizabeth White and her corporation – The White Company– says she can help put you behind the wheel of that Lambo a lot quicker.

Speedy deals

Think weeks rather than days before you can drive off in that aspirational sports car.

“I just knew I could get these people a Lambo a lot quicker than most people,” said White.

“We had a very large sale to a buyer in China from a seller in California for a US$4 million car. The negotiation was very quick. It took less than a week and the settlement took about 30 minutes.”

White says her company can put together speedy deals in a mix of fiat and digital currencies with the help of hedge fund Apis Capital Management.

“We’re able to quickly convert someone’s holdings at any moment,” she said. “I can take these large amounts of money and purchase the items for my client, and then re-ingest their cryptocurrencies back into the fund.”

Stepping stone

If you are a cryptocurrency millionaire aspiring to the lifestyle of the serious wealthy, then White’s company has switched digital currency into suites at the Super Bowl, yachts, dream honeymoons, luxury clothing and furnishings and jewellery.

“It all goes back to offering cryptocurrency holders something they need,” said White. “They need the ability to purchase something in the real world with their digital wealth.”

Now, White is considering her own easy to exchange cryptocurrency as a stepping stone for digital currency millionaires who want to spend some of that cash.

The aim is to develop a coin that can be spent instantly on a cup of coffee or a Lamborghini wherever you are in the world.

Bitcoin Whales Sitting On $37 Billion Crypto Investment

Anna Webb
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Bitcoin Whales Sitting On $37 Billion Crypto Investment

A clandestine group of cryptocurrency investors are sitting in the shadows controlling a third of the market.

Bitcoin ‘whales’ are a network of 1,600 investors holding $37 billion of the digital coins – which is almost a third of the Bitcoin available to trade on the market.

Blockchain research company Chainalysis revealed how Bitcoin wealth is concentrated in the hands of a relatively few wealthy investors.

In a snapshot of the market, the company found 1,600 Bitcoin wallets containing at least 1,000 Bitcoin.

The data also suggests the whales sold another $30 billion of the digital currency to speculative investors in the run up to the Bitcoin price peak of nearly $20,000 in December.

Whales at odds with Bitcoin ethos

“New speculators with accounts connected to the same user or entity with activity within 10% of the of the blockchain have pushed the supply of Bitcoin available for trading up 57% since December 2017,” says the analysis.

“Prices will likely struggle to recover until speculators reduce the supply of coins available for trading by moving funds off exchanges and out of order books or new users enter the market and strengthen demand.

“Between April 2017 and April 2018, Bitcoin held for investment fell from 72% to 50%, suggesting that long-term holders took advantage of December all-time-highs to take profits and transfer Bitcoin to new entrants. At the same time, coins held for speculation rose from 14% to 35%.”

The company also argues that so few investors holding so much Bitcoin is at odds with the philosophy of the movement that demands monetary system independent of control that is open to all.

Feeding frenzy of speculators

“This concentration of wealth means that bitcoin is at risk of volatility, as the moves of a small number of people will have a large effect on the price,” said Philip Gradwell, chief economist at Chainalysis.

Chainalysis also revealed some whales cashed out their entire holdings when the feeding frenzy of speculators entered the cryptocurrency market in December.

“This was an exceptional transfer of wealth and conditions for it to occur again are unlikely to form again soon,” said Mr Gradwell.

The firm and other experts warn that such a high concentration of wealthy investors in an unregulated sector could leave opportunities for market manipulation.

Bitcoin Rollercoaster Sees Another Big Drop

James Atkins
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Bitcoin Rollercoaster Sees Another Big Drop

The price of Bitcoin has collapsed from nearly $20,000 a coin six months ago to just $6,800 in a spectacular fall from grace with investors.

A chart plotting Bitcoin’s value against the US dollar makes miserable reading for investors hoping to make a quick buck of the digital currency on the back of last year’s massive rise.

Following Bitcoin is a rollercoaster ride. For months in 2017, the price slowly climbed from $2,657 in June to $5,000 in October – then a steep rise was triggered taking the value to $19,345 in December.

Since then, investors have seen more troughs than peaks as the price plunged to a low of $6,634 in April and down to the current price of $6,740 after recovering to $9,699 for a short time in May.

In the past seven days, the Bitcoin market cap has plunged by $16.45 billion from $131.65 to $115.20.

As the oldest, most expensive and most traded cryptocurrency, what happens to Bitcoin shapes the market for other digital currencies that have followed a similar value trajectory in recent months.

Future or failure?

“With the largest variety of markets and the biggest value – having reached a peak of US$18 billion – Bitcoin is here to stay,” says market monitor Cryptocompare.com

“As with any invention, there can be improvements or flaws in the initial model however the community and a team of dedicated developers are pushing to overcome any obstacle they come across. It is also the most traded cryptocurrency and one of the main entry points for all the other cryptocurrencies.

“The price is as unstable as always and it can go up or down by 10% – 20% in a single day.”

Bitcoin has hordes of promoters and detractors with opposing views on the destiny of Bitcoin.

Some, like Apple co-founder Steve Wozniak, see Bitcoin as the future, taking over from traditional money as a global currency.

Others, like billionaire investment guru Warren Buffett vilify Bitcoin as the devil’s spawn and see no value in the digital currency – just a gamble or speculative investment in the hope the price will rise to give a profit.

Bitcoin value US$ – December 2017 to June 2018

Source: CryptoCompare

SEC Chief Says ICOs Are Securities And Face Regulation

Anna Webb
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SEC Chief Says ICOs Are Securities And Face Regulation

US Securities and Exchange Commission chair Jay Clayton has emphatically told investors that cryptocurrencies must abide by existing financial rules rather than see the framework twisted to accommodate them.

Clayton is a hugely influential regulator as the head of the powerful SEC.

In an interview, he was clear about the definition of a security.

“We are not going to do any violence to the traditional definition of a security that has worked for a long time,” said Clayton.

“We’ve been doing this a long time, there’s no need to change the definition.”

Follow the rules

Defining if a cryptocurrency is a security or not makes a huge difference to the compliance requirements and costs coin issuers must meet.

Clayton also explained the SEC would not listen to pleas to change regulations govern initial coin offerings (ICOs), which have raised more than $9 billion so far in 2018.

“If you have an ICO or a stock, and you want to sell it in a private placement, follow the private placement rules,” he said. “If you want to do any initial public offering with a token, come see us.”

But, he warned, expect to follow the law.

Clayton also cleared up what the SEC considers as the difference between a digital currency and a security.

The Howey Test

Cryptocurrencies are intended as replacements for sovereign currencies, replacing the dollar, the euro, the yen with bitcoin,” Clayton said. “That type of currency is not a security.”

“A token, a digital asset, where I give you my money and you go off and make a venture, and in return for giving you my money I say ‘you can get a return’ that is a security and we regulate that. We regulate the offering of that security and regulate the trading of that security.”

The definitive judgment is the Howey Test, called after a ruling in a 1946 case before the Supreme Court.

The test says a security is financial investment in a common enterprise, in which the investor expects to profit the efforts of others.

Clayton was not ambiguous about ICOs – he says they are securities and if it is a security, it’s regulated.

Ripple Spreads The Word With $50m Research Donation

James Atkins
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Ripple Spreads The Word With $50m Research Donation

Cryptocurrency start-up Ripple is encouraging students to take part in developing the blockchain and payments system with a $50 million donation to universities around the world.

Ripple is seeding more research into the blockchain by collaborating with universities to speed up academic research, innovation and advances in blockchain technology.

The universities are free to focus on their own research and development topics providing they:

  • Collaborate on research and technical development to stimulate widespread understanding and innovation in blockchain
  • Create new curriculum to meet high student demand for learning about blockchain, cryptocurrency and other fintech topics.
  • Stimulate ideas and dialogue among students, faculty, technologists and business leaders on topics of shared interest.

The universities are in several countries, which allows blockchain research across different regulatory environments.

Backbone of innovation

The Center for Information Technology Policy (CITP) at Princeton University is creating a program to study the policy impact of cryptocurrencies and blockchain in the US and around the world.

Delft University of Technology in the Netherlands and the University of Luxembourg are building a new blockchain research program.

“As the traditional backbone of innovation, universities uniquely offer an independence and rigour that the private sector cannot. They also are responsible for training the workforce of the future, helping to address the demand for technological solutions and talent to solve the world’s hardest financial problems,” said a spokesman for Ripple.

“Now is the perfect time to support research and study in blockchain, cryptocurrency and digital payments at universities around the world.”

Where the cash is going

The complete list of Ripple partners is:

  • Australian National University College of the Law
  • CITP at Princeton
  • CSAIL at MIT
  • Delft University of Technology (Netherlands)
  • Fundação Getulio Vargas (Brazil)
  • Haas School of Business, University of California, Berkeley
  • IIT Bombay
  • International Institute of Information Technology, Hyderabad (IIIT-H)
  • Korea University
  • McCombs School of Business, UT-Austin
  • The University of North Carolina at Chapel Hill
  • The University of Pennsylvania
  • UCL (University College London)
  • University of Luxembourg
  • University of Nicosia (Cyprus)
  • University of Oregon
  • University of Waterloo

Ripple has also recently donated $29 million to schools and teachers to create inspirational classroom projects. The donation also funds 30,000 teachers in the US and provides books, technology and field trips to more than 1 million students.

DND Smartphone App Will Freeze Out Cold Callers

Graham Trafford
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DND Smartphone App Will Freeze Out Cold Callers

Developers have come up with a cryptocurrency blockchain application that will ring the changes for millions by blocking cold callers.

A proposed blockchain ‘do not disturb’ app will maintain a central database recording the details of smartphone customers who have consented to accept telemarketing calls.

The app is in response to the Telecom Commercial Communications Customer Preference Regulations 2018 that the Indian government is introducing and is under development by the Telecom Regulatory Authority of India (TRAI).

A similar law is due to be introduced in the UK banning cold calls, unsolicited text messages and spam emails.

The aim is for the blockchain to record all calls between telephone subscribers and commercial organisations.

Blockchain blocks pesky calls

Telemarketing companies must register with telephone providers to receive customer lists – but they will only receive the numbers when they make the calls and anyone who has failed to consent will be excluded from the list.

The blockchain ledger will list telephone users who have consented to receive the calls and keep a separate list of callers who have received messages from telemarketers. Regulators will compare the two to reveal offending telemarketing companies.

Any companies making illegal calls will face fines and other penalties from regulators.

In the UK, the government is also making company directors personally responsible for observing the cold call ban by planning to introduce fines of up to £500,000.

TRAI is also negotiating with smartphone providers to make call and text logs as part of the ‘do not disturb’ app.

Apple won’t agree to app

So far, only Apple has refused to hand over the call and message log details and is refusing to market the DND app through the Appstore.

“Blockchain will ensure two things — non- repudiative and confidentiality. Only those authorised to access details will be able to access subscriber details and only when they need to deliver service. Trai will become first organisation to implement this kind of regulation,” said Trai Chairman RS Sharma.

“A subscriber may have given consent for a service, but that consent is liable to be misused. Under the proposed regulation. The subscriber will be able to revoke consent given to entities whenever he or she desires through Trai app and other mechanism that will be provided under the regulation.”

Watchdog Probes 24 UK Cryptocurrency Firms

Anna Webb
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Watchdog Probes 24 UK Cryptocurrency Firms

Investment watchdogs are investigating 24 cryptocurrency firms in the UK which may be operating illegally.

The Financial Conduct Authority (FCA) is also looking at seven other reports from investors regarding how cryptocurrency businesses operate.

The FCA confirmed the investor inquiries after a freedom of information inquiry.

“We want to determine whether they might be carrying on regulated activities that require FCA authorisation,” said a spokesman.

“The response added: ‘If we conclude that they are, then we may investigate and take action, identifying and determining the most serious matters which pose the greatest risk to consumers.”

Suspected scams

The FCA also explained that the investigations do not relate to regulating cryptocurrencies, but to the activities of the firms.

The complaints are from customers of firms with concerns about their digital currency investments.

Two are suspected scams – one involving ripple and litecoin.

In two cases, investors were barred from accessing their accounts – one over security issues and the other triggered a complaint that an online investment platform is rigged.

An investor is also disgruntled that their employer has ordered them not to invest in digital coins, which they feel is ‘illegal’.

Another investor is worried about the volatile nature of the markets for Ripple, Bitcoin and Ethereum.

High risk worries

The final complainant feels cryptocurrencies are too high risk and feels the FCA should take more action to regulate them.

The name of the person making the freedom of information request was withheld by the FCA, but is suspected to be a top accountancy firm.

Their inquiry read: “Could you please provide a list of all complaints the FCA has received with regards to cryptocurrencies over the last 12 months.

“In each case, could you provide details of — what cryptocurrency was involved, what the nature of the complaint was (ie scam, false advertising), and whether the complaint was lodged by an individual or a company.”

The FCA responded that the database of the FCA consumer contact centre was searched for the term ‘cryptocurrency’ – and listed the details of the seven calls received.

The FCA has investigated other cryptocurrency complaints and issued warnings about the danger of investing in initial coin offerings (ICOs) and cryptocurrency contracts for a difference (CFDs)

Rehab Clinic Offers Cryptocurrency Counselling

Anna Webb
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Rehab Clinic Offers Cryptocurrency Counselling

If you are like Apple co-founder Steve Wozniak, who found an obsession with cryptocurrency prices taking over his life, then rehab may be the place for you.

A clinic in Scotland is advertising a rehab course for Bitcoin and other digital currency addicts who are finding that they spend too much time tracking their volatile investments.

Psychologists believe the swiftly changing prices of altcoins are attractive to traders who are susceptible to gambling or obsessive/compulsive disorders.

Castle Craig, one of Europe’s leading rehab centres says cryptocurrency traders concerned about their addiction have reached out for help.

The clinic addiction to trading cryptocurrency is no different from compulsive gambling.

Day trading high

Day trading gives speculators a high when they buy or sell for a profit, which can be addictive, and like gambling, can lead to a financial disaster.

Dr Mark Griffiths, Professor of Behavioural Addiction at Nottingham Trent University said “Addiction to cryptocurrencies is a sub-type of online day-trading addiction. I see these as akin to gambling addiction.”

Wozniak has explained he sold his cryptocurrency holdings because he spent too much time in front of a screen watching the fluctuating prices of his investment.

The rehab centre says cryptocurrency addicts will be treated as part of the clinic’s established treatment program for gamblers.

Escape from reality

Chris Burn, a gambling therapist at Castle Craig Hospital said: “The high risk, fluctuating cryptocurrency market appeals to the problem gambler. It provides excitement and an escape from reality. Bitcoin, for example, has been heavily traded and huge gains and losses were made. It’s a classic bubble situation.”

The clinic web site says research shows a typical user who compulsively checks prices online and monitors media for reports of price surges or crashes.

“Cryptocurrency users talk of FOMO – the Fear of Missing Out – and the need to monitor news and prices constantly. It can take over a person’s entire life and result in them spending their life savings, salaries and even stealing,” the site explains.

Of course, there is no suggestion that Wozniak is a cryptocurrency addict who needs treatment in rehab. He sold his holding and retains just a single Bitcoin for research purposes.

Hacker With £500,000 Of Bitcoin Jailed For 11 Years

James Atkins
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Hacker With £500,000 Of Bitcoin Jailed For 11 Years

A one-man cybercrime wave that netted millions of pounds from stolen web site data has ended with the hacker facing nearly 11 years in jail.

Grant West, 26, tricked his way into customer databases of some big brand companies, leaving a trail of havoc that cost more than £1 million to put right with new security measures.

Among his victims were food delivery web site Just Eat, Asda, Ladbrokes, Barclays and British Airways.

West’s life of crime funded his luxury lifestyle of expensive gadgets, lavish holidays and expensive cars.

He was caught with his lap top loaded with sophisticated software on a train by police.

Stash of money and drugs

At Southwark Crown Court, West, of Sheerness, Kent, admitted hacking and fraud charges.

He was sentenced to 10 years and 8 months in prison.

The court heard police recovered Bitcoin worth £500,000 in several electronic wallets owned by West. He also had £25,000 in cash and 500 grams of cannabis he was selling online.

Police found the personal data of 165,000 people on his computer and in the caravan where he lived.

In the Just Eat attack, West encouraged customers listed on the firm’s hacked database to reply to a survey with a fake £10 voucher in return for answering questions about their identities that he intended to sell to criminal gangs.

He also siphoned £84,000 from the accounts of several customers at Barclays Bank.

Sold on Dark Web

Around £1.6 million raised from selling stolen financial information on the Dark Web remains outstanding.

Sentencing, Judge Michael Gledhill branded West a “one-man crime wave” and criticised lax cyber security at the web sites he had hacked.

“When such inadequate security is confronted with a criminal of your skills and ambition it is totally unfit for purpose and worthless. This case should be a wake-up call to customers, companies and the computer industry to the very real threat of cybercrime,” he said.

West’s former girlfriend Rachel Brookes, 26, from Wales, was ordered to serve a community order at an earlier hearing after admitting involvement in his offences. He had attacked the web sites from her laptop computer.

His offences took place between July and December 2015.

Blockchain App Tracks Conflict-Free Diamonds

Graham Trafford
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Blockchain App Tracks Conflict-Free Diamonds

Diamonds will keep their sparkle forever thanks to a new blockchain app developed by mining company De Beers Group.

The company has put together a tracker app called Tracr that follows a diamond from the mine to the consumer, so they can be assured of quality and no scam between the two that substitutes an original gem with a copy.

The idea is also to try and exclude infamous blood diamonds from the jewellery market.

The program digitally tracks a diamond through the supply chain by giving each gem a unique identifier that details the weight, colour and clarity so buyers are assured of the stone’s provenance. Tracr will go live from September 2018 and has already received enthusiastic support from within the jewellery market.

The blockchain database provides a secure digital trail for diamonds registered on the platform, from mining as rough stones to cutters and polishers then on to retailers.

Creating confidence for buyers

“Tracr is focused on bringing the benefits of blockchain technology to the full diamond value chain – providing consumers with confidence, the trade with increased efficiency and lower costs, and lenders to the industry with greater visibility,” said De Beers CEO Bruce Cleaver.

Other industry leaders are signing up to Tracr.

Signet Jewellers, the world’s largest diamond retailer, will share information with Tracr.

CEO Virginia Drosos said: “Responsible sourcing of diamonds has always been an integral part of Signet’s corporate ethos, and this will be further strengthened through our cooperation with Tracr.”

De Beers, which markets a third of the world’s diamond supply, has already tested Tracr by monitoring the movement of at least 100 gems through the world’s jewellery network.

Stamping out blood diamonds

Five leading diamond manufacturers – Diacore, Diarough, KGK Group, Rosy Blue NV and Venus Jewel – have collaborated with De Beers to develop Tracr.

Among the key aims of Tracr is helping the industry stamp out the sale of ‘conflict’ or ‘blood’ diamonds.

These are stones that fund military action by rebels trying to topple their governments mainly in Africa.

“Tracr will provide consumers with confidence that registered diamonds are natural and conflict-free, improve visibility and trust within the industry, and enhance efficiencies across the diamond value chain,” said Cleaver.

Central Banks Disagree About Issuing State-Backed Cryptocurrencies

Anna Webb
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Central Banks Disagree About Issuing State-Backed Cryptocurrencies

The Bank of England has cited concerns that launching a state-backed Brit Coin cryptocurrency could harm the economy.

In a digital currency review, the UK’s central bank considered the possibility of issuing digital currency but pulled back from green lighting the move.

The main reason was the bank was worried investors and consumers would rush to buy any coin shored up by the British government, but that this could undermine retail and investment banking by triggering a rush to withdraw cash.

But another reason led to the decision not to go ahead, according to the bank’s governor Mark Carney.

That was he fears going digital would take away the tools the bank harnesses to control the economy, like raising or dropping interest rates to manipulate inflation. This control drips down to factories and shops and influences prices, wages and decisions about saving or spending.

Bank of England chief predicts Brit Coin possibility

Despite his doubts, Carney seems to be a cryptocurrency believer.

In a recent speech to economists in Sweden, he seemed to change his mind about Bitcoin and other digital currencies not acting like a traditional store of wealth, because few transactions take place where they are spent like money.

However, he told his audience that he expected to see far fewer central banks in the future as countries decide to issue their own cryptocurrencies – and he hinted that he could see Britain going this way eventually.

Carney has also extolled the virtues of the blockchain and is examining ways to integrate the technology into the Bank of England.

Concerns over global financial security

While Carney is mulling what to do about cryptocurrencies, the talking shop for central bankers warns launching state-backed coins could undermine global financial security.

The Bank of International Settlements, which was formed in 1930 and is owned by 63 central banks, says ‘jumping on the Bitcoin band wagon to destroy unofficial rivals could endanger the world’s financial stability.

“Any steps towards the launch [of central bank digital currencies] should be subject to careful and thorough consideration,” said Jacqueline Loh, who chairs the BIS markets committee.

The BIS general manager has also labelled cryptocurrency a “combination of a bubble, a Ponzi scheme and an environmental disaster.”

World’s Wealthy Ready To Invest In Cryptocurrency

James Atkins
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0
World’s Wealthy Ready To Invest In Cryptocurrency

More than one in three of the world’s richest people are ready to embrace cryptocurrencies before the end of 2018, according to new research.

Research by one of the world’s leading independent financial companies, has found 35% of deVere Group’s ultra-high net worth clients has already invested in digital currency or plans to do so by the end of the year.

The company asked more than 600 UNWI clients living in the US, the UK, Australia, United Arab Emirates, Qatar, Switzerland, Hong Kong, Spain, France, Germany and South Africa about their views of investing in cryptocurrency.

In response to the poll, deVere is adding even more digital currencies to deVere Crypto, the electronic wallet and trading tool.

New currencies for deVere Crypto

deVere Crypto users can now buy, sell, store, and exchange Bitcoin Cash (BCH) and EOS (EOS), alongside Bitcoin (BTC), Ethereum (ETH) Litecoin (LTC), Ripple (XRP), Dash (DASH), Monero (XMR) and Stellar Lumens (XLM).

Nigel Green, founder and CEO of deVere Group, said: “Adding Bitcoin Cash and EOS to the deVere Crypto app is part of our ongoing commitment to clients. The users of the app are demanding an ever-wider, diversified crypto portfolio as the crypto sector expands and moves even further into the mainstream.

“This mainstream expansion is clearly evidenced by the fact that more than a third of wealthy individuals around the world – who are already likely to be successful investors – are telling us that they already have exposure to crypto or that they will have by the end of this year.

Broader awareness

“The survey’s findings demonstrate that high net worth individuals are increasingly unable to ignore the huge potential of cryptocurrencies. There’s now surging public awareness of the value, need and demand for digital, global currencies in a digitalised, globalised world.

“I expect that a broader awareness and wider understanding of the crypto sector will grow exponentially in the next year as the tech that underpins it further improves, as major corporations and financial institutions embrace it, and as regulation is further developed.”

Ultra-high net worth individuals (UHNWI) have investable assets of $30 million or more, excluding personal assets and property such as their home and collectibles.

One In Five ICOs Are Ponzi Schemes, Claim Journalists

James Atkins
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One In Five ICOs Are Ponzi Schemes, Claim Journalists

An investigation into initial coin offerings has found that nearly one in five have all the hallmarks of fraud.

Reporters from the prestigious Wall Street Journal scrutinised 1,450 ICOs and red-flagged 271.

The newspaper alleges the schemes provided plagiarised documents, fake team listings or made claims which displayed the characteristics of Ponzi schemes.

A Ponzi fraud – named after the originator – is when a fraudster collects money from his victims for an investment, but instead of placing the cash with the investment, pays off other victims from the proceeds.

The idea is to keep paying old investors from newly raised cash while raking off a profit.

False documentation

The WSJ inquiry also revealed that investor white papers promoting the project’s technology and applications were copied word-for-word from other projects which were sometimes Ponzi frauds.

In some cases, team names and mission statements were copied.

The newspaper also uncovered a lucrative industry for freelance writers from online job sites who produce ICO documents and white papers for the fraudsters from $100 a time.

Astonishingly, investors failed to carry out even basic due diligence that could have revealed the fraud and invested around $1 billion in the 271 suspicious ICOs.

Disgruntled investors have managed to reclaim $270 million by chasing the offenders in the courts.

Shocking claims

The tricksters are taking advantage of a huge market worldwide for ICOs that has raised almost $10 billion for cryptocurrencies in just two years.

ICOs make some shocking claims – like the Plexcorps saga. The ICO raised $15 million by promising investors that their stake would be returned with a 1,300% profit within a month. Surprisingly, the company was unable to deliver the promise, but claims the ICO was not a scam.

“We are being depicted as robbers, scammers and fraudsters everywhere in the media. They are smearing our name with some allegations that can sometimes be false or misleading,2 said a spokesman. “All PlexCoin purchased were distributed and we are now listed on many cryptocurrency exchanges. We claim that PlexCoin is not a fraud since no one had their money stolen from us.”

Bradley Bennett, formerly of the Financial Industry Regulatory Authority (FINRA), has spoken out about fraudulent ICOs.

“Copied language, the absence of named employees and promised high returns are warning signs for investors,” he said.

Cryptocurrency Is The Future, Says Apple’s Wozniak

Anna Webb
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0
Cryptocurrency Is The Future, Says Apple’s Wozniak

Wozniak sits at the head of Apple – expected to shortly become the world’s first trillion dollar company.

In comparison, ethereum is a minnow with a market cap of $68 billion.

But Wozniak is a cryptocurrency enthusiast – and the coin he most enthuses over is Ethereum.

“Ethereum interests me because it can do things and because it’s a platform,” he said, explaining that in the long term, the digital currency and blockchain could prove as influential as Apple.

Wozniak extols cryptocurrency as a store of value on a par with gold.

“There is a certain finite amount of bitcoin that can ever exist,” he has said.

Dollar is phony

“That makes it more genuine and real than the dollar, which is kind of phony since it is often manipulated for political reasons.

“Your house has value. And if it is a house today, 40 years from now, it still is a house in value, even if the price increases over time.

“Gold gets mined and mined and mined. Maybe there’s a finite amount of gold in the world, but Bitcoin is even more mathematical and regulated and nobody can change mathematics.”

But does Wozniak support his views with cryptocurrency holdings?

Apparently not.

In the past, he was ripped off by a scammer who stole his Bitcoin stash.

Now, he holds a single Bitcoin and two ether which he says is not an investment but an experiment to see how they work.

Fascinated by smart contracts

Which, he says, is just as well because he spent too much time following the volatile cryptocurrency markets.

“I had them so that I could someday travel and not use credit cards, wallets or cash,” Wozniak said.

“I could do it all on Bitcoin. I studied which hotels and facilities accepted Bitcoin. It’s still very difficult to do so.”

Besides Bitcoin, Wozniak confesses he finds the smart contract facilities built into cryptocurrency fascinating.

“There is a lot more to this cryptocurrency than just the Bitcoin,” he said.

“Smart contracts will open as many possibilities as the tens of thousands of software programs that no one could have imagined before the invention of computers.”

To that end, Wozniak believes the world is standing at the threshold of an exciting new technological age.

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