Bitcoin dips then bounces back after SEC says crypto exchanges must register with agency

Bitcoin fell below the key $10,000 level after the Securities and Exchange Commission said it will require digital asset exchanges to register with the agency. The statement referred to digital assets that are considered securities.

The largest cryptocurrency by market capitalization dropped nearly 10 percent on Coinbase in a sudden move after the SEC statement stoked fears that tightening regulation could restrict future trading. Bitcoin is hovering around $9400 and $9,500 as at the time of writing.

According to the SEC statement:

"If a platform offers trading of digital assets that are securities and operates as an 'exchange,' as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration."

"The SEC staff has concerns that many online trading platforms appear to investors as SEC-registered and regulated marketplaces when they are not. Many platforms refer to themselves as "exchanges," which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange."

 The statement from the regulatory agency comes after weeks of subpoenas from the SEC in its attempt to establish better control over the many trading platforms and exchanges.

"The SEC continues to draw a line in the sand between securities and non-securities but without going so far as to name names," said Spencer Bogart, partner at Blockchain Capital.

However, he expects the crackdown will focus more on so-called "alt-coins" than bitcoin, potentially helping the price of the largest cryptocurrency by market cap. "Of all crypto assets, bitcoin seems least likely to be deemed a security — by a long shot," Bogart said.

Whether securities laws apply to digital coins has remained a matter of much speculation, resulting in firms relying mostly on self-disclosure and attorneys to try to distinguish themselves from common scams.

Current views on whether an asset is a security tend to follow the "Howey Test," which comes from a 1946 U.S. Supreme Court case. The ruling says a security involves the investment of money in a common enterprise, in which the investor expects profits primarily from others' efforts.

Bitcoin is down roughly 50 percent from all-time highs near $20,000 reached in December, falling sharply since then as ongoing fears of government regulation plague the cryptocurrency.

But news of a potential phishing problem on one of the largest cryptocurrency exchanges also weighed on the asset Wednesday.

In a statement on Twitter, Binance.com CEO Changpeng "CZ" Zhao said that the site was still investigating potential irregularities in trading.

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Mercedes-Benz Launches Crypto Coin To Reward Eco-Friendly Driving

Germany-headquartered car manufacturing giant Daimler AG, famous for its Mercedes-Benz and Smart brands, presented its own Blockchain-based digital currency MobiCoin at the Mobile World Congress 2018 in Barcelona, Cointelegraph auf Deutsch reported on March 5.  

The project, which started in February 2018, was created to reward drivers for environmentally-friendly driving habits, i.e. smooth and safe driving at low speeds. The project will be in its testing phase for the next three months, during which 500 drivers who follow eco-friendly driving practices will be rewarded with MobiCoins.

According to Cointelegraph auf Deutsch, data from the vehicles will be transmitted to Daimler and converted into MobiCoins, which will be stored in a mobile app. Participants with the most MobiCoins will reportedly receive VIP tickets for events such as the DTM Races, the MercedesCup Final, or Fashion Week in Berlin. However, it is not known whether drivers will be able to convert the MobiCoins to fiat currency or other cryptocurrencies.

Recent months have seen multiple German auto giants embrace Blockchain tech. In February 2018, German car manufacturing giant BMW announced its partnership with VeChain, the blockchain-based supply chain enhancement platform. The same month, Stuttgart-based Porsche announced it has teamed up with Berlin-based startup XAIN to use Blockchain technology in improving locking systems and the capabilities of autonomous cars.

Earlier, in January 2018, Volkswagen’s Chief Digital Officer Johann Jungwirth joined the supervisory board of the IOTA Foundation, a non-profit Blockchain foundation for the Internet of Things (IoT).


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The real winners in the game.Crypto Exchanges.

Crypto Exchanges Are Raking in Billions of Dollars

 

Digital-asset exchanges are emerging as one of the biggest winners of the cryptocurrency boom.
The top 10 are generating as much $3 million in fees a day, or heading for more than $1 billion per year, according to estimates compiled by Bloomberg using trading volume reported on data tracker CoinMarketCap.com and fee information on the exchanges’ websites. Fees in the lowest range of the exchanges’ scale were used for the calculations.

The projections are a rough estimate as it’s near impossible to know what exactly the closely held firms are charging, including discounts for their most active traders. Based on daily trading volume and fees listed, annual revenue for the top 10 goes into the billions of dollars. While the numbers aren’t exact, the order of magnitude shows the boom in virtual currencies is generating some very real cash.
“The exchanges and transaction processors are the biggest winners in the space because they’re allowing people to transact and participate in this burgeoning sector,” said Gil Luria, an equity analyst at D.A. Davidson & Co, who reviewed the methodology for the revenue estimates. “There’s a big business there and it would not surprise me if they’re making hundreds of millions of dollars in revenue and possibly even billions a year.”
Tokyo-based Binance and Hong Kong-based OKEx are handling the largest volume of trading, equal to about $1.7 billion daily. Based on fees of 0.2 percent, which are higher than OKEx’s 0.07 percent for the most active traders, Binance is likely bringing in the most cash per day.
Huobi, Bitfinex, Upbit and Bithumb, which are all based in Asia, come next in the ranking. They process between $600 million and $1.4 billion of trading volume and charge fees of 0.3 percent on average. More than half of the crypto currency trading happens in Asia-based exchanges, according to data compiled by smart contract platform Aelf.
Asia’s influence in crypto trading can be explained by a concentration of cryptocurrency mining in the region from Bitcoin’s early days, as miners took advantage of cheaper electricity costs, said Aelf co-founder Zhuling Chen. Other reasons include the region’s young population, which adopts new technology quickly, consumers that are comfortable with mobile payments, and even a strong gaming culture, which incentivizes virtual transactions, said Chen. Tightening regulation in the region, with China and South Korea restricting trading and initial coin offerings, also means that Asian firms have been forced to become global, he said.

Binance’s prominence is notable considering the firm started operating in July. It shifted headquarters to Japan from Shanghai after the Chinese government tightened its grasp on the industry late last year. The firm can process 1.4 million orders per second, which it says makes it one of the fastest exchanges in the market.
Its loose customer accreditation process may also explain its growth, said Chris Slaughter, co-founder of crypto investment platform Samsa. It’s also very reliable, he said.
“They don’t make users go through the know-your-customer process until withdrawal,” Slaughter said. “It’s a complicated process. You can lose customers in the two or four hours that it takes. In Binance, you can go from not having an account to having funds on an account in less than 20 minutes.”
South Korean exchange Upbit, which is among the top five in trading volume, only started operating in October. It’s controlled by Dunamu Inc., which also owns Kakao Talk, the most popular messaging app in Korea. Upbit is integrated in Kakao Talk and lists over 120 cryptocurrencies, thanks to a partnership with the U.S.-based exchange Bittrex.

All of the exchanges are privately held and only a few years old, which often means it’s difficult to find financial information or details on management. HitBTC, the 10th largest, doesn’t provide any information on who runs it or where the firm is based, even as customers asked these questions on the exchange’s forum. Bit-Z, WEX and EXX, among the 20 biggest by trading volume, are some of the others that don’t provide those details either.
Bitfinex, among the five biggest, has come under heavier scrutiny as the U.S. Commodity Futures Trading Commission sent subpoenas to the company in December.
Potential competition from public companies and traditional financial firms may push crypto exchanges to be more transparent and even reduce costs, said Slaughter.
“More conventional businesses like banks and funds are likely to acquire crypto platforms at some point to make sure they have a strategic foothold in the market,” he said. “It’s a no-brainer. Financial services is where all the real business revenue in crypto is.”


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Crypto millionaires have donated $6.5 Billion to research aimed at reversing the aging proccess.Vitalik Buterin alone donated $2.5 worth of ether.

Silicon Valley’s elite is famously fascinated by the promise of extreme lifespan extension—if not outright immortality. Research on these issues has drawn funding from the likes of Google, while the Bay Area’s Unity Biotechnology, which is developing drugs to treat diseases that accompany aging, has also raised a bunch of money. Now, the sci-fi-like cause is attracting a new group of benefactors: cryptocurrency tycoons.
Millionaires whose fortunes stem from the crypto boom are donating to studies that longevity guru Aubrey de Grey says could extend healthy human lives for thousands of years. Ethereum founder Vitalik Buterin recently gave $2.4 million worth of ether to the nonprofit SENS Research foundation, where de Grey is chief science officer, to help develop rejuvenation biotechnologies. An anonymous crypto philanthropy called Pineapple Fund has also contributed.
It’s not surprising the crypto community would take interest in this research, according to de Grey, speaking in a podcast with Sunday Times reporter Danny Fortson. Early adopters “are bound to be people who very heavily intersect with people who are interested in technological progress,’’ said de Grey, 54, who previously worked in artificial intelligence and has a PhD from the University of Cambridge. Young people are more open to the idea that aging is “a really important, solvable problem.”
Buterin, for example, is 24 years old and co-founded the second-most valuable cryptoasset. In a statement announcing his donation, Buterin applauded SENS Research’s “focus on creating solutions to the diseases of aging, one of the greatest problems facing humanity.”
The nonprofit has received a total of about $6.5 billion worth of bitcoin and ether since mid-December, de Grey said. The foundation immediately sells its crypto donations, typically for dollars, because as a nonprofit it’s prohibited from financial speculation. The foundation has a $4 million annual budget.
For de Grey, the goal is to advance technology fast enough to stay one step ahead of the aging problem, according to his interview with the Sunday Times. He thinks there’s about a 50% chance that the foundation will prove the viability of its efforts using lab mice in the next five years, which will usher in a “war on aging.”
“It all depends on how soon we make the key breakthroughs,” he said, describing the research as an all-or-nothing proposition. In the future, he added, the human lifespan will either be measured in two digits or four digits.


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Executives from traditional financial firms are trying to fight off crypto by dismissing it as a Ponzi scheme or a scam.Former JP Morgan Trader Tells All.

 

LONDON — A former high-flying trader who has embraced the world of cryptocurrencies says there is a "trench warfare" going on between traditional financial services and digital upstarts.

Danny Masters told Business Insider: "There’s something of a trench warfare going on between what I call analogue financial services companies and digital financial services companies."

Masters began his career as an oil trader at Shell in the 1980s, rising to become head of JPMorgan's energy trading business in New York. He left in the late 1990s to set up his own commodities fund, Global Advisors.

Masters became interested in bitcoin and cryptocurrencies around five years ago and pivoted Global Advisors to focus on crypto in 2014. Shortly after, Global Advisors' bank HSBC ditched the business over fears that bitcoin could involve money laundering risks.

"We’ve gone from a renegade character to a more confusing animal for people to view," Masters told BI during an interview in London this week.

"The analogue financial services companies are not in this game at all. They don’t want to touch the core currency, which is bitcoin or ethereum, they’re suspicious about the industry itself. A lot of people think it’s a criminal enterprise and a Ponzi scheme and a scam."

ECB executive board member Yves Mersch compared cryptocurrencies to a Ponzi scheme last week and the president of the World Bank and the head of the Bank for International Settlements have both called bitcoin a scam.

Masters said: "In my mind, the cryptocurrency landscape is like the fog of war. You might be able to see the few people around you, you can see the hill over there, but very few people can see the whole landscape. We’re in a very fortunate position because we touch so many different parts of it. For us, it is abundantly clear that we are in the midst of a true financial revolution."

'It is no longer acceptable to dismiss it'

Masters thinks that bankers are dismissive of cryptocurrencies because of the threat they pose to traditional banking. The crypto community is built on the principles of decentralization, displacing middlemen, and doing away with legacy systems.

"At the other end of the spectrum, we saw Charlie Munger only yesterday call bitcoin asinine. We heard Jamie Dimon call bitcoin a fraud. There are some very, very high profile — but usually, deeply legacy entrenched — people who are just out-right dismissive," Masters said.

"[Banks] have gone from dismissive, to unified in their resistance. Why? Why is something they ridiculed three months ago now something they feel the need to unite against and try and kill? There’s been a lot of aggressive things from banks."

Global Advisors owns a 75% interest in Coinshares, another crypto investment business, and Coinshares announced two new funds in January that have a combined $1 billion in assets under management. Masters argues that stats like this increasingly validate his position and pose problems for traditionalists.

"The clock has lapsed, it is no longer acceptable to dismiss it. One of the biggest dismissers was Jamie Dimon. JPMorgan recently issued one of the largest reports on cryptocurrency yet seen."

Bitcoin rocketed over 1,500% against the dollar last year, leading to a surge in interest from professional investors. Exchange operators Cboe and CME both launched bitcoin futures contracts to tap into the demand, while Goldman Sachs is said to be considering setting up a bitcoin trading desks.

"If you’re going to argue for it, fine, if you’re going to argue against it, you better have some good reasons to do so," Masters said. "People are struggling to come up with reasons to argue against it. They’re saying, it’s a load of crap and it’s worth nothing. It’s obviously not worth nothing."

'Banks have sat on their laurels for 30 years'

Masters believes that the crypto world has now reached "escape velocity" and the "analogue" rivals won't be able to catch up or compete. In Masters telling, the new crypto reality will replace our current system.

"The problem with the analogue financial world is it’s become hamstrung and mired in a billion regulations," he said. "Nobody enjoys working in it anymore, there’s just a tremendous amount of friction. I don’t think you can unpick that ball of knots, you have to start over again.

"Banks have sat on their laurels for 30 years. I just threw out my chequebook, it looks exactly the same as it did in 1985. Why should I still have it when I’m doing Uber instead of cabs, Airbnb instead of the Sheraton? They have absolutely failed to innovate in any way, shape, or form and now they’re paying the price."

Despite a rocky start to the year, Masters thinks that the run-up in value seen in bitcoin and cryptocurrency last year is a hard-fought victory for all those who have been involved since the beginning.

"I got to know the crypto-anarchists many years ago and I was one of the very few financial people involved in the early days. It was a little scary actually. I felt a little self-conscious in some circles," Masters said.

"I’m thrilled for everybody in the space that has stuck to it for the last five years. 2014, after Mt. Gox, was a really miserable year. A lot of people fell off the boat at that time. Guys like Mike Hearn rage quit bitcoin when it was $400. Stripe has now given up bitcoin. There have been people who have lost the nerve along the way.

"You needed to be a true believer and you needed to suck it up for 2014, ‘15, and ‘16. And then ‘17 was just off the charts good."

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Bitcoin owners donated $70 Million to charity Last Year.Do you know why? Tax.

Following Bitcoin's spectacular rise in value, crypto currency traders had a good year in 2017.This reflected favourably on charities as almost $70 million was received as donations in Bitcoin and other Crypto currencies.
Some of these donation could be normal attempts to spread the wealth among as many people as possible but according to a report, donating your Crypto can give you an advantage with the the tax man.
It's no secret that the IRS has kept an eye on the wildly popular cryptocurrency, ruling that bitcoin and others like it are considered property for tax purposes. This means that if you cash out, you're likely on the hook to report capital gains to the Tax Man – and those gains can be substantial, particularly if you bought bitcoin back in 2010 when one unit was worth less than a dollar.
There's a solution to that: Give your cryptocurrency to charity via your donor advised fund – an account that you can fund with highly appreciated assets and use for making grants to charities -- instead of cashing out.

This way, you unload assets that could face steep capital gains taxes and you collect a charitable contribution deduction for your 2017 taxes.

But rapid fluctuations in bitcoin and other cryptocurrencies present charitable organizations with an interesting problem: How do they capture the value of a volatile asset?
"It's interesting how volatile cryptocurrency can be in 24 hours," said Eileen Hesiman, president and CEO of the National Philanthropic Trust. "One gift lost about 12 percent of its value in a 36 hour period. Our policy is to sell as quickly as we can."

A lot of Crypto holders seem to have figured this out and many more will take this route in the days ahead.
Bitcoin has experienced a very good run in the last few days and the crypto traders are emitting positive outlooks on the Crypto market.


Watch this tax form video.

Why you need to hook up with someone in Venezuela.Bitcoin Mining.

$14 000 to mine a Bitcoin in Germany, $530 in Venezuela.

 Bitcoin mining is costing South Koreans a lot of money.

Mining just one bitcoin in one of the world's biggest digital currency markets costs $26,170, according to data released by lighting and furniture firm Elite Fixtures.
So-called bitcoin miners are vital to keeping the underlying blockchain, or distributed ledger, network tick. A blockchain network is essentially a huge decentralized database that maintains a continuously growing record of transactions or other data. Miners solve complex mathematical problems to validate transactions and add them to the blockchain.
The Elite Fixtures data also showed that Venezuela is the cheapest country in which to mine bitcoin. It costs $531 to mine the world's best known virtual currency there. Some Venezuelans have turned to bitcoin mining for survival in the economically struggling South American country.

And Venezuela President Nicolas Maduro is banking on a cryptocurrency called "petro," backed by the country's oil, gas, gold and diamond reserves, as a way to get around U.S. sanctions.
Mining digital currency uses up a lot of electricity, as miners utilize huge rigs of computers for the process. However, in return for their work, voluntary miners are rewarded with a sum of bitcoin as well as a transaction fee paid by people who transact with the cryptocurrency.
According to Blockchain.info data, the total revenue earned by all bitcoin miners hit an all-time high of $53 million on December 17, the same day that bitcoin notched its highest price ever of $19,783.21.
The Elite Fixtures study analyzed electricity prices from 115 different countries, using data provided by governments, utility firms and the International Energy Agency. It worked out the price of power consumption based on averages from three popular cryptocurrency mining rigs.

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